The affordability debate is heating up again as the city council pushes for a new linkage fee that will increase the cost of development. The development community is adamantly against the proposed fee—which is expected to easily pass. Large commercial and residential developers will be most affected. In an interview with Paul Beard, a partner in Alston & Bird's Environmental, Land Use & Natural Resources Practice Group, we learn why developers are so opposed to the fee and how they should prepare for it. Beard recommends that the development community “unites in opposition” to the linkage fee, which he believes will pass.

GlobeSt.com: Why are developers so opposed to the proposed linkage fee?

Paul Beard: Most developers are opposed to the proposed linkage fee, because it is both bad policy and fundamentally unfair. First, the linkage fee will only increase the cost of residential and commercial construction, which ultimately will be passed on to buyers, renters, and lessees. Thus, the proposed fee serves only to make even less affordable the city's already-limited supply of commercial space and housing. But worse than that, it unfairly targets developers. Developers aren't the cause of the lack of affordable housing; they are the solution. And the proposed linkage fee only punishes their laudable efforts in supplying the city with badly needed projects, especially housing units.

GlobeSt.com: Do you believe that the city council will approve the linkage fee?

Beard: Yes. A key city committee—the Planning and Land Use Management Committee—already approved the fee by a vote of 5 to 0. There's no reason to think the city council won't follow suit.

GlobeSt.com: How should developers prepare?

Beard: Developers should unite in opposition to adoption to the fee, underscoring the fee's policy-related and legal deficiencies. If the fee is adopted, developers have a couple of options. First, as currently drafted, the ordinance gives project proponents a two-month window following adoption to submit a permit application without being subject to the new fee. Developers could decide to act as quickly as they can to file their applications with the city in order to take advantage of the grace period. Second, the current draft of the ordinance allows for a number of exemptions, including (without limitation) for small commercial developments and housing developments with 5 or fewer units. If possible, developers should design their projects in a way that qualifies them for an exemption.

GlobeSt.com: Do you think that development measures, like linkage fees and Measure JJJ, are unconstitutional?

Beard: Absolutely. Any time a public agency imposes, as the condition of development, payment of some fee—in this case, for affordable housing—it must demonstrate a constitutionally close enough connection between the fee and the impacts of the project. Here, the fee is being exacted to fund affordable housing. Yet the city has no established, and cannot establish, the necessary connection. Far from causing housing to become unaffordable, residential developers' projects are actually ameliorating that problem by supplying more housing. As for commercial developers, they are not causing housing to become less affordable, and they therefore should not be forced to pay for the city's wrong-headed program. The fee is unconstitutional.

GlobeSt.com: What are the legal principles behind the linkage fee, and why is it the action the city is choosing to combat affordability issues? Are there other or better solutions that the city can or should use, in your opinion?

Beard: I can't speak for the city, but the fee is misguided. It only increases the cost of providing housing, which is the exact opposite of what the city purportedly wants. A better solution is to make residential development much easier and less costly to undertake. That can take the form of fewer regulations, fewer requirements, and lower fees. If you make supplying housing easy and cheap, the supply will come, and that will naturally drive down the price of housing in the city.

GlobeSt.com: Why are developers so opposed to the proposed linkage fee?

GlobeSt.com: Do you believe that the city council will approve the linkage fee?

Beard: Yes. A key city committee—the Planning and Land Use Management Committee—already approved the fee by a vote of 5 to 0. There's no reason to think the city council won't follow suit.

GlobeSt.com: How should developers prepare?

GlobeSt.com: Do you think that development measures, like linkage fees and Measure JJJ, are unconstitutional?

Instant Insights /

Developers “Unite in Opposition” to Affordable Linkage Fee

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