Opinion: A Better Way to Solve the Housing Crisis - Tax Land, Not Development #realestate #investment #homeownership

Source:  LA Times

To address Los Angeles' housing crisis, Mayor Eric Garcetti has proposed a "linkage fee" on new development.  The city would charge new residential developments of more than five units $12 a square foot, and new commercial developments $5 a square foot, to finance subsidized affordable housing.

This proposal is well-intentioned.  Given our politics, and the realities of Proposition 13, might be the best L.A. can do.  But it won't raise much money or build much housing, and it dodges rather than solves the fundamental problem in our housing policy.  We should try for better.

Linkage fees essentially tax new development, but housing in Los Angeles is expensive because L.A. doesn't have much development.  With little to tax, revenue would stay low, and so would affordable housing production.  City Hall predicts that the fee will raise $100 million a year.  Affordable housing costs, on average, almost $450,000 per unit to build.  That works out to about 225 units annually.  Those units would unquestionably change the lives of the people who got them, but the city needs hundreds of thousands, not hundreds, of affordable units.

Check out the full story here: 
http://www.latimes.com/opinion/op-ed/la-oe-manville-monkonnen-linkage-fee-20170719-story.html