Dive Brief:

• Planning officials in Los Angeles are considering proposals that would require developers to pay fees to fund the construction and maintenance of affordable housing in the city, according to Curbed Los Angeles.

• What the plan calls linkage fees would be levied on developers building residential and commercial projects, with estimates suggesting they would pay $5 per square foot of commercial space built and $12 per square foot of residential.

• The fee is expected to bring in between $75 million and $92 million annually.

Dive Insight:

The proposal comes as Los Angeles County continues to come up hundreds of thousands of units short in affordable housing stock. Still, the linkage fees plan isn't the first of its kind —  Los Angeles Mayor Eric Garcetti floated the idea in October 2015 and, in 2016, suggested that a portion of the money raised could be put toward easing the city's high rate of homelessness.

While other California cities like San Francisco, Oakland, and San Diego have introduced linkage fees, they are not necessarily popular with developers, and some industry observers contend the fees can deter development. 

In Boulder, CO, some council members argued that a recent move to raise linkage fees on commercial developments in the city could backfire and result in rents on such properties increasing as developers look to recoup their costs.

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