July 23, 2020

San José Commercial Linkage Fee: Get Involved Today!


The campaign for a Commercial Linkage Fee for affordable housing is heating up in San José, and there will be a number of key events and engagement opportunities in the run up to the City Council vote on August 25th.

Commercial Linkage Fees have become a standard tool for generating local funds for affordable housing, as commercial and office developers pay a fee to help build housing for new workers who are often paid less than they need to afford local rents. As jobs increase so too does the demand for new housing, and the pressure on already overwhelmed affordable options.

Last Friday, city staff released the legally required Nexus Study, which confirmed the linkage between the development of new employment uses and the resulting need for affordable homes for the new workers. Additionally, it identified the gap between the household incomes of new low- and moderate-income workers and the costs of providing the affordable housing they will need. The study covered eight different building types, from warehouse to high-tech office, and established maximum allowable fees to mitigate the gap ranging from $45 to $177 a square foot. It is important to note that these are not recommended fee levels, but they do lay out the full affordable housing demand generated by new commercial development.

We will be sharing additional details during our monthly Housing Action Coalition meeting tomorrow, Friday, July 24, 2020 from 12-1:00 p.m. Click here to register and receive the zoom link. We will be joined by San José Council Member Raul Peralez and Nadia Aziz of the Law Foundation of Silicon Valley. It promises to be a great discussion as we head into the final month of the campaign.

Later in the day on Friday (7/24) the city is expected to release a Fee Feasibility Study, prepared by an outside consultant in coordination with city staff, as requested by the City Council.  The Feasibility Study is intended to be a data driven assessment of the impact of fees at different levels on development of different commercial development types in different parts of the city.  This study was completed in February, and has been updated by the consultant and city staff in light of the COVID pandemic and economic recession.  This is a very difficult time to assess the future of commercial development in the city, and SV@Home and our partners will be looking very closely at the assumptions in this study to ensure that the adopted fees are robust in this uncertain moment.

Following the release of the Fee Feasibility study the broad-based campaign will begin in earnest. We expect to share an assessment of the fee recommendations next week, and will be gearing up for the only announced public meeting on the CLF on August 6th. Look for details on how to join the meeting in your inbox (as of publication the City has not confirmed a time for this meeting), and for opportunities to sign-on in support of the campaign on our website.

On August 14th, City Staff will release its final recommendations on fee levels in different parts of the city to the City Council ahead of the August 25th vote. It will be incredibly important that supporters of affordable housing weigh in on the need for more funding to offset the expected increase in jobs over the next 5-10 years. Small differences in fee levels will have a profound effect – measured in 1000s of additional affordable homes — on future resources to respond to increased needs.