AUSTIN FOR ALL : A REAL AFFORDABLE HOUSING SOLUTION Housing Linkage Fees

HOUSING LINKAGE FEES  What is a housing linkage fee?  Linkage fees are adopted by cities to finance affordable housing and are generally charged per square foot of new building and sometimes for major remodels and additions.  Linkage fees can be charged on both commercial and residential structures.  Cities in California, Colorado, Florida, Massachusetts, Washington, and Oregon use these fees to fund affordable housing.  Denver and Philadelphia are in the process of adopting housing linkage fees.  The fee are typically $1-$6 per square foot, but are as high $20 per foot in very expensive cities like San Francisco.  The fees are usually paid at building permit. Austin for All

HOUSING LINKAGE FEES  How much could be raised annually?  In 2015 there were roughly 30 million square feet of new structures built excluding remodels and additions.  A reasonable $2 per foot fee on all building types would raise $60 million annually. $600 million is possible over a decade.  In comparison the 2 housing bond issues raised $120 million over the last decade.  The Pilot Knob utility fee waiver generates about $3 million annually.  The use of property taxes from once exempt property raises several hundred thousand annually. Austin for All

HOUSING LINKAGE FEES  What is process to adopt a legally justifiable fee?  The city hires a consultant that prepares a two prong “nexus study.”  The first prong analyses number the of new employees, earnings of the employees, the affordability gap between earnings and market rate housing. This prong calculates a legally justifiable fee.  The second prong sets the practical limit of the fee given development economics to ensure the fee doesn’t impact growth.  The fee is usually adjusted annually with inflation.  A new nexus study is prepared periodically to recalculate the fee. Austin for All

HOUSING LINKAGE FEES  How is the fee used?  The fee is placed into a dedicated trust fund to be used for building, acquiring or preserving affordable housing.  The city would set the policy for how and where the money is spent.  Because the city controls the fund it could require permanent affordable housing at deeper levels.  It could require larger family sized units.  It could dictate where affordable housing is built. Austin for All

HOUSING LINKAGE FEES  What are the advantages of the fee?  The fee is fair and spread over all building types, not just apartments. Because of the large base a small fee raises substantial money.  Developers have certainty compared to ad-hoc negotiations on every zoning case.  New development pays. The fee has no impact of property taxes or utility rates.  The administration is simpler and easier to monitor than density bonuses.  The City has greater control over the product, location, the depth of affordability, and length of affordability.  Planning/zoning decisions are based on best planning and not distorted by the need for affordable housing. Austin for All