Coalition to Preserve LA corruption Eric Garcetti

Mayor Eric Garcetti’s Affordable Housing Linkage Fee Faces Trouble

In City Hall, News by Preserve LA

L.A. is in crisis, with spreading homeless encampments, skyrocketing rents and City Hall-backed gentrification policies that reduce the number of rent-controlled units and push people to the streets. To make matters worse, Mayor Eric Garcetti suffered major blows as his administration struggled to show it can address those problems.

Recently, the mayor’s delayed, two-year effort to charge a “linkage fee” on developers who get rich off L.A.’s boom backfired during a public roadshow to unveil its detail, and has been put on hold for several months by the City Council’s Planning and Land Use Management Committee (PLUM).

In addition, the U.S. Attorney joined a lawsuit against City Hall for taking up to $933 million in federal handicapped housing rehab funds, but not making sure the handicapped found accessible housing.

Citywide, the mayor’s aides were pummeled with questions as they visited neighborhood councils and other groups.

Tense exchanges unfolded at the Harbor Alliance of Neighborhood Councils in Harbor City, and the Valley Alliance of Neighborhood Councils in Sherman Oaks. In two very different neighborhoods, residents asked why Garcetti would charge $12 per square foot in “linkage fees” to a person who builds a home larger than 1,500 square feet — while skyscraper developers who often reap $50 million in profits from a single building would pay $5 just per square foot.

In a rough week for Garcetti, people also asked: How is City Hall going to monitor the new affordable housing it hopes to finance with the proposed linkage fees?

These questions arose in part after the U.S. Attorney joined a lawsuit alleging City Hall failed to supply enough apartments to the handicapped — after receiving hundreds of millions in federal funds.

In Harbor City, when residents pressed a mayoral aide about who would qualify for affordable housing created by the mayor’s new “linkage fee” plan, the aide could not answer — he had forgotten his chart. After the chairperson asked the aide to stay to answer mounting questions, the aide left.

The affordable housing linkage fee is badly needed in L.A., but is running into trouble due to issues of public trust and effectiveness.

Garcetti’s $5 proposed fee on major developers is far lower than San Francisco’s, Boston’s or Seattle’s, where development is booming — despite their much higher “linkage fees.”

Garcetti’s formula is odd, placing a far higher fee burden on a new family home than on multinational corporations. Seattle charges $8 to $17.50 per square foot, to commercial developers only, in hot downtown areas. Boston charges $10 per foot, also to big commercial developers only. San Francisco charges large commercial developers up to $25.49.

Seattle’s mayor worked directly with residents and business leaders, and ultimately, dozens of disparate business and resident groups formed the Growing Together Coalition to hammer out an affordable housing linkage fee deal.

Garcetti’s idea is mired in internal and external battles, with his closed-door style and reliance on consultants becoming an Achilles Heel.

“If you read the consultant’s report, it’s based on nothing,” says one respected affordable housing scholar, of Garcetti’s plan to charge a stiff fee to new homes larger than 1,500 square feet.

Some of the distrust is fueled by City Hall’s inadequate monitoring of L.A.’s existing affordable housing. The City Controller says that of L.A.’s 28,482 affordable units,1,482 are charging more rent than allowed, 1,085 failed to verify if the renter is really low-income, and 1,181 tenants never produced income proof.

Coalition to Preserve L.A. believes City Hall should take these corrective steps: 1) Follow the lead of other cities, by charging more serious linkage fees to commercial developers only; 2) hire a lot of monitors — a city with 50,000 employees can afford to protect its affordable housing; 3) end City Hall’s promoting of gentrification — tragic city policies that fuel L.A.’s growing loss of rent-stabilized units.