By: Dr. Lynn Reaser
This past week, the City of San Diego raised its “linkage fee” on commercial development five-fold over the next three years to help pay for more affordable housing units. Unfortunately, this measure is unlikely to help much in boosting the amount of housing affordable for low or moderate wage earners in the City. It also could adversely affect possibilities for economic growth.
Any increase in development fees, especially as large as that approved by the City Council, will stifle the potential increase in commercial building and activity in the City of San Diego. Some of it could shift to other areas in the County, while other developers could focus on other less expensive regions in or outside the state.
By levying lower fees on projects targeting higher paying jobs, the gentrification of the City could intensify. Higher income employees and more expensive housing could become more dominant here, while lower paying jobs and cheaper housing are pushed into outlying areas.
To improve housing affordability, we need to see improvements in the ability of consumers to pay for housing and reductions in the cost of supplying that housing. Increasing jobs and reducing home-building permitting costs and delays are the best ways to boost affordability.