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.