On December 13, 2017, the L.A. City Council passed and Mayor Garcetti signed a “linkage fee” ordinance that is projected to bring more than $100 million in annual revenue to the City. The ordinance was published on December 18, 2017. That’s the good news, (for the City of L.A.)
The term linkage fee, is because the fee creates a “link” between the development of market rate projects and the need for affordable housing. The fee will be charged to project applicants depending on the characteristics of each project. The proceeds will be used to preserve existing affordable housing and develop new affordable housing projects.
Developers will be required to pay a “linkage fee” prior to issuance of a building permit. The City has established a market-based fee schedule that sets different fees on a per square foot basis depending on a project’s type and location, ranging from $3-$5/square foot for nonresidential uses and $8-$15/square foot for most residential uses. So in essence that 500 sq ft home office or Man-cave could cost you an extra $7,500 (That’s the BAD news)
(But here is the GOOD NEWS) Linkage fee requirements will be phased in over time after the ordinance takes effect. Developers who submit building permit or entitlement applications within 4 months of the ordinance’s effective date will not be required to pay any linkage fee!
Beginning 4 months after the ordinance goes into effect—and assuming an effective date of February 17, 2018 —pro-rated linkage fee amounts will be applied to developers who submit their building permit or entitlement applications as follows –
-1/3 of the fee for applications submitted on or after June 18, 2018;
- 2/3 of the fee for applications submitted on or after December 20, 2018;
And 100% of the linkage fee for applications submitted on or after June 17, 2019
No additional fees will be assessed to applicants for seeking an extension of expired building permits. And a linkage fee may be refunded if a building permit application expires without having been utilized.
Home Owners should also know that Linkage fees will be adjusted annually for inflation, and will also be adjusted every five years (starting from July 1, 2018).
So what’s the takeaway? If you’re planning on doing an addition or adding square footage to your current property get those plans in and submit those building permits now, cause waiting could cost you a whole lot more later -
For a more detailed outline of the fees and their requirements please Email me TRMeinelschmidt@kw.com