ECONOMIC DEVELOPMENT
City Seeks to Create Linkage Fee for Housing
W
ith Los Angeles facing one of the worst housing crises in the nation, the City of Los Angeles is considering an Affordable Housing Linkage Fee proposed by Mayor Garcetti to raise money to build more affordable housing within the City. The Board of the Hollywood Chamber of Commerce expressed concerns at its July meeting about the proposal, which is moving fairly quickly through the approval process. What is proposed is a fee of $5 per square foot for commercial (non-residential) new construction and $12 a square foot for residential construction. The fee would be adjusted annually according to the change in the Consumer Price Index. Fees would be collected at the time a building permit is issued. A $12 fee on a 1,000-sq.ft. residence would add $12,000 to the cost of a unit. Estimates are that the fee has the potential to generate between $75 and $92-million per year. Even under the most optimistic forecast, the linkage fee would produce no more than 613 units annually. Other cities that have implemented linkage fees have gained no more than 100 units per year. Concerns by the Chamber were raised as to whether the small number of
affordable units that might be gained balanced the negative impacts caused by a linkage fee. Chamber directors noted that any additional fee tacked onto new projects would be passed on to either the renters or buyers of homes. They felt the relatively small number of units that could be built did not justify raising prices on projects that are already expensive. Board member Jerry Neuman of Liner Law said, “A new tax on development will only result in increasing the affordability gap by potentially providing for low income housing at the expense of workforce and middle market rents, because the additional costs will have to be borne by the other units in the system. This will only force those rents up.” He said there would also be an impact on commercial buildings where markets like Hollywood are finally seeing a resurgence in office development and job growth. He feared that the market would be hindered by unassociated costs to support low income housing development as opposed to workforce housing which is desperately needed.
David Simon of Kilroy Realty said that the City already gets a lot of fees for affordable housing that come through community benefits negotiations with developers. He said it would almost amount to “double-dipping” for the City to charge a linkage fee on top of the amounts that have already been negotiated with developers. The Chamber board noted that they are very supportive of building more affordable housing in the City, but felt this proposal was not the answer to the City’s affordable housing woes. They urged the City to slow down the process and to look at the broader picture of how to incentivize the building of more affordable housing. One local developer, Ed Miller of Cal Coast Development, suggested a phase-in of any proposed linkage fees. “Perhaps the fee could be phased in over a period of three to five years, which would give some relief to developers who have existing sites, which would give some time for price adjustments to be reflected in the cost of land to accommodate Measure JJJ or linkage fees,” he suggested.
CHAMBER BUSINESS BENEFIT representing the interests of businesses with government
Chamber Slates Entertainment Industry Conference Nov 30th
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lans for the Chamber’s 2017 State of the Entertainment Industry Conference are well under way with committee co-chairs Susanne Ault of Variety and Kristin Cavanaugh of Sony Pictures at the helm. This year’s conference will take place on Thursday, November 30th at the Loews Hotel Hollywood and will include exclusive conversations with top level industry leaders. The event will also include the presentation of the Commitment to California Award, which will go to an entertainment executive who has made a tremendous impact on our great state. Past honorees have included Ted Sarandos, Roy Price, Vin Di Bona, Michael Chiklis, Shawn Ryan, and Anthony E. Zuiker. The half-day conference will start with networking at 8:30 a.m. followed by a packed program through 1:30
6 n hollywoodchamber.net
Susanne Ault
Kristin Cavanaugh
p.m. Early Bird Special rate through Monday, November 27th is $99. Admission thereafter is $125. Reserve at www.hollywoodchamber.net/events. “Since this conference was first held six years ago, it has quickly grown into a major confab to discuss the future of our signature industry,” noted Chamber President and CEO Leron Gubler. “Last year’s event drew widespread media attention. We expect this year to be no different.”
At time of press, sponsors of the conference include Variety as Presenting Sponsor and Hollywood Museum in the Historic Max Factor Building as Platinum Sponsor. Breakfast Level includes Iron Mountain Entertainment Services, Loews Hollywood Hotel, Paramount Pictures. Gold Level includes City National Bank, Hudson Pacific Properties. Silver Level includes AT&T, Capitol Music Group, Comcast | NBCUniversal, Occidental Entertainment Group Holdings, Paramount Contractors & Developers For more information about the State of the Entertainment Industry Conference, contact Kaylee Kiecker at kaylee@hollywoodchamber.net. CHAMBER BUSINESS BENEFIT creating a strong economy