Jobs-Housing Linkage Fees — What Are They? How Can They Help Affordable Housing?

High rise office building in San Francisco
JP Morgan Chase Building photo by Ken Lund is licensed under CC BY-SA 2.0
Developers wishing to build new office towers in San Francisco pay linkage fees that contribute to affordable housing construction.

New businesses often require new business buildings.

New business buildings become populated with new business workers.

New business workers create a demand for new housing.

The logic that tracks from new business to a demand for housing is not difficult to follow. But in practice, charging a business that brings new employees to a region or city is more difficult than it might seem.

One way of creating a Jobs-housing Linkage Fee is to tax an intermediary. The industry that develops and constructs commercial buildings pays the fee, but in the longer term the bill for affordable housing does not come from those pockets. Commercial developers or builders who pay the fee simply pass it on through selling or leasing agreements to the businesses that arrive to occupy newly-constructed  buildings.

San Francisco has an office building development fee, devised twenty years ago. Nowadays, according to advocates at least, the payment formula is outdated and no longer represents the reality faced by workers trying to find affordable housing in a booming region with its housing scarce at any price.

The success of this Jobs-Housing Linkage Fee is not in question. But there is strong activist pressure to increase the funding support from businesses for affordable housing. Without this and other funding strategies, the growing affordability crisis in San Francisco threatens to either impoverish workers or drive them away from local employment towards a regions or cities with more moderate housing prices.

Read more in SFWEEKLY: Office Developer Fees Are Overdue to Fund Affordable Housing, Advocates Say

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