Building Industry Association
of San Diego

Councilman Todd Gloria proposes to double fee paid by commercial & industrial development

The City of San Diego Land Use and Housing Committee voted to approve a plan that will ultimately lead to the doubling of the housing linkage fee paid by commercial and industrial projects.  The fee is calculated on a square foot basis and can add tens of thousands, if not hundreds of thousands of dollars in construction costs on non-residential development.  Under the plan, the fee increases would be phased starting in two years and would essentially double after five years.  Thereafter, an automatic escalator based on the Engineering News Record  would be used annually to adjust the fee.

A broad business coalition turned out in mass to oppose the linkage fee increase calling it  nothing more than a stealth ‘Jobs Tax’ since it targets job creating businesses.  The committee voted 3-1  on a motion by Councilmember Todd Gloria to forward the plan to the full council for consideration.

In an effort to address business concerns over the fee increase, Councilmember David Alvarez added an amendment that could lead to the reduction or elimination of the linkage fee altogether if a broad based funding source can be identified.  However, there appeared to be little appetite from councilmembers on asking the voters for new taxes to go toward affordable housing.

The committee directed a Task Force led by the BIA and Housing Federation to return in 120 days with a menu of incentives and regulatory reforms that could led to the creation of more affordable housing.

The City of San Diego Land Use and Housing Committee will consider a proposal to double its Linkage Fee that is paid by Commercial/Industrial projects in San Diego.  Money from the Linkage Fee is given the the Housing Commission to be used for affordable housing projects.  Opponents dub the fee a ‘Jobs Tax’  because it targets employment centers and question the logic of doubling fees at a time of 10% unemployment and the worst  housing market in generations.  The proposal would also create an automatic escalator that would negate the need for future council votes on linkage fee increases.

A large business coalition including the BIA issued a detailed opposition letter to the head of the city’s Housing Commission urging him to abandon the fee increase proposal and to work with stakeholders to identify and implement a broad based funding strategy rather than target new jobs.  The Housing Commission plans to move forward with its recommendations at a Wednesday, March 30th, hearing of the Land Use and Housing Committee.

Governor Jerry Brown’s  effort to kill redevelopment agencies and siphon the money to help close  the state’s $26 billion budget deficit hit a snag when the bill that would have ended RDAs failed by one vote in the Assembly.  Lawmakers needed 54 votes to pass Senate Bill 77 as ‘urgency’ legislation as part of a budget trailer bill but came up short much to the frustration of the Governor who is set on getting the $1.7 billion in locally generated taxes.   Mayors and the business community throughout the state are strongly opposed to the Governor’s plan saying redevelopment agencies are responsible for economic development and job creation.

The San Diego County Assembly delegation split along party lines with Assemblyman Martin Garrick (Oceanside), Assemblyman Brian Jones (Santee) and Assemblyman Nathan Fletcher (San Diego) voted against the bill and freshman Assemblymembers Tony Atkins (San Diego)  and Ben Hueso (Chula Vista) voting in favor.  The bill will be considered again as soon as Monday as the state continues to work to close the multi-billion dollar budget gap.

Declaring there is no way to make everyone happy, the San Diego County Board of Supervisors voted unanimously to push on with the update of its General Plan.  The board directed county staff to meet with the nearly 200 property owners who have opposed zoning changes to their land in an effort to reach a compromise – but only if it will not result in the recirculation of the Environmental Impact Report.  Most of the disputed lands are broken down into Minor, Moderate and Major categories and the board wants staff to do what it can to move Moderate and Major lands into the Minor category.  If necessary the board will take up each  property at a future hearing to bring the update to conclusion. The vote was a blow to back country landowners and businesses who have strongly opposed the severe downzoning of property to as little as one home on 80 acres.  They say it will destroy land values and negatively impact economic growth of back county towns.

The board will next review a list of 27 policy issues that staff says could be adopted with little impact to the overall General Plan.  The BIA has testified at numerous hearings that the policy changes are essential to the successful implementation of the General Plan update. That hearing is scheduled for April 13th.