Raising Fees To Subsidize Affordable Housing

Should cities begin significantly raising development fees to finance affordable housing?

2 minute read

May 22, 2005, 11:00 AM PDT

By Chris Steins @planetizen


A plan to significantly raise fees paid by builders to subsidize affordable housing was endorsed by the San Diego Housing Commission and will go before the City Council, reported The San Diego Union-Tribune. The proposed hikes, which would be phased in, would increase the funds collected by the city's housing trust fund from $1.4 million to $3 million to $5 million annually, sources said. According to the article, the commission structured the fees to reflect the housing needs of new workers who would accompany different types of development projects. For example, fees for hotels of more than 500 rooms would quadruple by the third year, based on the assumption that such facilities attract a large share of low-income workers. Although developers don't officially oppose the plan, they believe they're unfairly burdened with subsidizing affordable homes, said an industry representative.

Meanwhile, in Florida, a measure allocating more than $450 million in documentary stamp revenues to affordable housing next year passed both chambers in Florida and is headed to Gov. Jeb Bush for his signature, reported the Palm Beach Post. Under the bill, $250 million would go to the state's affordable housing trust fund, and $208 million would be set aside "to help reconstruct low-income housing that was destroyed by last year's hurricanes," the article said. Some lawmakers had proposed a $193 million cap on stamp taxes going to the trust fund, saying that affordable housing programs should compete for annual funds. But Senate negotiators raised the cap in the final bill to $250 million in 2005-2006 and $243 million in 2006-2007, with annual incremental increases thereafter, the article said.

Thanks to KnowledgePlex

Monday, May 9, 2005 in The San Diego Union-Tribune

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