Downtown San Jose
September 13, 2018

San Jose: City Takes Steps Towards Commercial Linkage Fee


San Jose’s City Council took a major step on September 11th towards adopting a citywide commercial linkage fee (CLF) by voting to schedule a hearing on September 18th to determine whether to proceed with studies to determine the feasibility of the fee. 

The motion for a hearing was made during the discussion of the Santa Clara County Civil Grand Jury’s report, which had as one of its recommendations the adoption of  a CLF to help alleviate the housing crisis. Entitled “Affordable Housing Crisis: Density is our Destiny,” the Grand Jury report prompted Mayor Liccardo and Vice-Mayor Carrasco, Councilmembers Peralez, Jimenez, and Rocha to issue memos calling for the City to undertake a nexus and feasibility study. The motion included a number of additional actions from Mayor Liccardo’s memo, including: exploration of a separate Downtown fee that would cover both housing and infrastructure, and continued advocacy for a regional CLF.

CLFs have long been considered a critical tool for local governments to fund affordable housing.  Cities typically charge commercial developers these fees to offset the impact of new commercial development on the need for new housing for workers. Palo Alto, Santa Clara, Sunnyvale, Cupertino, and Mountain View all have CLF ordinances. Milpitas has completed its studies and directed staff to come back with an ordinance in the coming weeks. That leaves San Jose as the last big city in the County without a CLF ordinance.

During the Council discussion there was a significant diversity of opinion even among those supporting the studies, with some eager to move forward so that the fees could be available as soon as possible and others more cautious in their support but interested in the studies’ conclusions about the impact the fees would have on future development.

The affordable housing community and a number of Council members have been calling for these studies, as the first step in approving the fees, for years.  This is a major victory, and while there is still along way to go, the new sense of commitment from the Council to explore all of the affordable housing funding options available is momentum we need to capture. While next week’s vote may be largely symbolic, this is an opportunity for our community to come out in support of the Council’s actions, and to make clear that we believe the CLF can be an important tool in our toolbox as we push for more affordable housing.

The Council session will start at 1:30 next Tuesday, and while it is difficult to predict the timing of action on any given item, our items are generally heard after 2:30.  Watch this space for updates on timing as we learn more.