Liberated by the Commonwealth, Boston Readies Big Linkage Fee Increases

Boston Mayor Marty Walsh has proposed a 42 percent increase in the linkage fees paid by developers of office, lab, and other large commercial buildings in the city.

"The additional money could add tens of millions of dollars a year to city coffers, capitalizing on a life-science building boom to help fund badly needed affordable housing," writes Tim Logan to report the news. "But there also are worries that it could dampen a post-pandemic recovery for construction in Boston, and set a precedent for even higher assessments."

Mayor Walsh was scheduled last week to ask the Boston Planning & Development Agency to increase the linkage fees from $10.81 per square foot to $15.39. The city's linkage fee program was created in 1986 and hiked by 8 percent by Mayor Walsh in 2018, according to a press release from the mayor's office.

Why the sudden increase? The Commonwealth of Massachusetts recently granted the city the power to raise linkage fees more frequently. The same press release includes more: "The proposed increase follows the passage of legislation last month, originally introduced by Mayor Walsh as a Home Rule Petition, to give Boston more flexibility in adjusting Linkage fees. Previously, the BPDA was only allowed to adjust Linkage every three years based on inflation. The new law allows Boston to adjust the required payment and program guidelines, allowing Linkage to be more closely aligned with the market and fund affordable housing and workforce development programs."

As noted by Logan, the linkage fee increase would be one of the final acts of Mayor Walsh before departing to Washington to become the secretary of the U.S. Department of Labor in the Biden administration.