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Affordable Housing Linkage Fee (AHLF) Exemption / Middle-Income Households

CF 17-0274-S1  

  • BAE Urban Economics Los Angeles Affordable Housing Linkage Fee Nexus Study  (September 21, 2016)

HOUSING and PLANNING AND LAND USE MANAGEMENT COMMITTEES’ REPORT relative to an Affordable Housing Linkage Fee (AHLF) exemption for middle-income homeownership.

Recommendation for Council action:

REQUEST the City Attorney to prepare and present an Ordinance to amend Los Angeles Municipal Code (LAMC) Section 19-18-B.2 (Affordable Housing Linkage Fee: Applicability Exemptions) substantially as detailed in the May 21, 2018 Los Angeles Housing and Community Investment Department (HCIDLA) report, attached to the Council file, and as follows:

2. Exemptions

c) Any single for-sale housing unit that:

a. Is restricted to and dedicated for first-time homebuyers.

b. Is owner-occupied by the first-time homebuyers.

c. Is affordable to middle-income first-time homebuyers earning up to 150 percent of Area Median Income (AMI), adjusted per household size, and sold at a price not to exceed the current maximum home purchase price limits established under the City’s Mortgage Credit Certificate (MCC) Program utilizing the Non-Targeted Areas High Cost Area Calculation (Maximum Purchase Price). The Maximum Purchase Price limits will be updated annually and posted on the HCIDLA’s website.

If the applicant (developer) sells a restricted for-sale housing unit at a price which exceeds the Maximum Purchase Price, the applicable Linkage Fee must be paid in full. Maximum qualifying income levels for potential homebuyers shall be based upon the Maximum Annual Income Limits table published annually by HCIDLA. A covenant agreement running with the land, including the equity sharing provisions required by California Government Code 65915, shall be recorded against each restricted for-sale housing unit prior to the issuance of a building permit. Upon the resale of a restricted for sale-housing unit from the initially qualified homebuyer and the reseller’s payment to the City of its initial subsidy and proportionate share of appreciation as defined by California Government Code 65915, the covenant may be terminated. The applicant shall pay any applicable covenant preparation, monitoring and termination fees required by LAMC Section 19.14. Payments and proceeds per this section, shall be deposited to the Housing Impact Trust Fund (Ordinance No. 185341).

Fiscal Impact Statement: The HCIDLA reports that there is no impact to the City’s General Fund. However, allowing for this additional exemption will likely decrease the revenue generated by the Affordable Housing Linkage Fee and may reduce the City’s ability to fund additional affordable housing units. The HCIDLA is currently preparing the AHLF Expenditure Plan based on the current projected AHLF revenue. The following is an estimate of AHLF revenue reduction based on new units that may be accessible to middle-income first homebuyers. From 2011 to 2016, there were 2,501 building permits issued for market-rate condominiums, artist-in-residence lofts, single-family attached homes, and modest single-family detached homes over 1,500 square feet and less than 2,500 square feet – all of which are currently required to pay the linkage fee. If all of these projects filed for this new AHLF exemption at the maximum current $15 per square foot fee, the City could lose an estimated $17 million per year in lost AHLF revenue into the Housing Impact Trust Fund.

Community Impact Statement: None submitted.

Click on the green highlight to view official documents and reports.

  • 07/02/2018 Council action (July 2, 2018)
  • 06/29/2018 Council adopted item forthwith. Joint Report from Housing and PLM (June 12, 2018)
  • 06/13/2018 City Clerk scheduled item for Council on June 29, 2018 .  Joint Report from Housing and PLM (June 12, 2018),  Report from Housing and Community Development (May 21, 2018)
  • 06/12/2018 Planning and Land Use Management Committee approved item(s) .   Report from Housing and Community Development (May 21, 2018)
  • 06/11/2018 Planning and Land Use Management Committee scheduled item for committee meeting on June 12, 2018.
  • 05/24/2018 Housing Committee transmitted Council File to Planning and Land Use Management Committee.  Report from Housing and Community Investment Department (May 21, 2018)
  • 05/23/2018 Housing Committee approved as amended .  Report from Housing and Community Investment Department (May 21, 2018)
  • 05/22/2018 Housing and Community Investment Department document(s) referred to Housing Committee; Planning and Land Use Management Committee.  Report from Housing and Community Investment Department (May 21, 2018)
  • 05/22/2018 Document(s) submitted by Housing and Community Investment Department, as follows:  Report from Housing and Community Investment Department (May 21, 2018)

Housing and Community Investment Department report, dated May 21, 2018, relative to a report back regarding an Affordable Housing Linkage Fee exemption for middle-income homeownership units

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