Last night I attended the public hearing for the so called Affordable Housing Impact Mitigation Fee or Commercial Linkage fee associated with the Mayor’s Housing Affordability and Livability Agenda (HALA) Committee recommendations. The commercial linkage tax was agreed to by commercial developers because it has made financial sense for those developers to pay a fee for additional development capacity. In fact, over the years most of the participation in the City’s Incentive Zoning program was from commercial developers. For a variety of reasons commercial development can better absorb fees for some additional floor area, while residential developers haven’t found incentive zoning to be much of an incentive at all. There was lots of support for the new fee last night, but not much for residential upzones, the key component of the “Grand Bargain” struck as part of the HALA process. It’s why I am skeptical the Bargain will hold together under the steady opposition of social justice, anti-growth, and neighborhood activists.

Oddly, if one didn’t know better, one would have thought that jobs and new housing were like toxic waste; something dangerous, deadly, and a mess that needs to be cleaned up. Throughout the proceedings speaker after speaker stood up and said, “I support the fee,” and followed it by reasons why new housing and job growth were bad things that the fee could somehow offset. That’s just bad economics. New housing is good all by itself. Speakers continually talked about the “housing crisis” and “displacement,” both things that we’ve got evidence are not really happening. Rents aren’t “skyrocketing” and displacement, quantitatively, is very small compared to new units being built. I got up and left after about an hour and a half of listening to this. I’m guessing the hearing last night is just the beginning of lots more fee boosterism with no upzones.

And remember the upzones come at an additional cost which may not really be offset by the additional capacity created. There are lots of problems with this “Bargain.”