The San Francisco Board of Supervisor’s Land Use Committee has voted 2-1 to more than double fees on new office development, potentially scaring away new developments in an initiative to raise millions of dollars for affordable housing.
The Jobs-Housing Linkage Fee would raise money for affordable housing to offset the effects of more jobs on the city’s scarce housing market.
Currently the fee for new office construction is $28.57 per sq. ft., and for laboratory spaces $19.04 per sq. ft. Those numbers would increase to $69.60 and $46.43, respectively, by 2022, if the proposal by Supervisor Matt Haney receives final approval.
The San Francisco Controller’s Office presented a report to the committee on Oct. 21 by city economist Ted Egan analyzing the likely effects of the fee hike.
Egan says that the legislation has the potential to raise substantial new revenues for affordable housing. However, it could be costly for job creation in the city.
Among his findings:
Despite complaints from developers, Supervisors Haney and Aaron Peskin voted in favor of the fee hike. Supervisor Ahsha Safaí was the sole dissenting vote, Curbed San Francisco reports.
“While we understand the need to address affordable housing concerns in San Francisco, this proposal is counterproductive, putting a heavy financial burden on non-residential development,” reads a statement from the Associated General Contractors of America (AGCA) to Construction Dive. “The city is risking continuing and future commercial development, and we have strong reservations that this will negatively impact the city’s growth development plans.
“These proposed changes could result in future construction coming to a halt, eliminating good-paying jobs to local workers.”
“ABC NorCal supports the construction of affordable housing and keeping all construction project bids fair and open,” said Sergio Cortez, workforce development manager of the Associated Builders and Contractors’ Northern California chapter. “However, we discourage any barriers that would impede on the progress of construction.”
The group has another idea, though: It would like to work with the city of San Francisco to train the homeless and other disadvantaged people to build affordable housing.
“The construction industry is at a shortage in workers right now, and we would love the opportunity for more individuals to go through our training and apprenticeship programs, to enter the workforce and start a new career,” Cortez told Construction Dive.
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