The case for linkage fees

New and old development in Seattle's South Lake Union neighborhood

New and old development in Seattle’s South Lake Union neighborhood; image by Flickr user Joe Wolf , Creative Commons

The Seattle City Council is trying to fast track a measure that would add automatic linkage fees to new development throughout the city. This means developers of new buildings would pay between $5 and $22 per square foot into an affordable housing trust fund. This tax would vary depending on the economic strength of the neighborhood, and would apply to offices, hotels, retail stores, laboratories and apartment complexes.  Single-family residential districts would be exempt.  The Housing Development Consortium (HDC), the organization spearheading this initiative, envisions money from this fund helping to construct affordable housing in conjunction with the new developments, thus creating sustainable mixed-income communities.

Seattle’s current method for funding affordable housing projects is through a zoning incentive program, in which developers can increase the amount of floor space on their plot of land, referred to as the floor-area ratio (FAR), by either building on-site affordable housing or paying a fine into an affordable housing fund. According to a study by consultant’s for the new linkage fee proposal, since 2001 only 56 new affordable units have been constructed using this method. The $32 million raised for the housing fund has been used to construct housing in other, less prosperous, areas of the city. Seattle is growing both in size and in jobs created; new amenities create need for new service workers. Without adequate housing, these lower-income employees will be forced to commute from outlying areas. Seattle could lose money if these workers cannot afford to live within the cities borders. Closing the gap between jobs and housing that is affordable to low and moderate income people reduces the amount these residents spend on transportation, thus allowing them to spend more on housing and amenities. Rather than living paycheck to paycheck, with anxiety and fear, more people might have the chance to contribute to their communities.

Linkage fees have a long history of improving the affordable housing needs in a city. Boston implemented linkage fees in 1983 to mitigate the gap between commercial and residential construction. The Neighborhood Housing Trust (NHT), which the city created in 1986 to manage the distribution of money from the fees, collected $133,804,969 from developers between its inception and 2012.  This money has created or preserved 10, 176 affordable units throughout the city. Construction has not slowed in Boston as a result of the fees, nor have neighborhoods imploded because of mixed-income developments. Instead, thousands of Boston residents can afford homes within their city.

Wealth is concentrated in Seattle. If the city continues to utilize the FAR bonus program without instating the linkage fees, it will grow to mimic places such as Chicago, in which zoning incentive programs support a crippling delineation between rich and poor.

 

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