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Providing quality legal services to statewide and national clients in ADA defense, Personal Injury, business and real estate for more than 35 years

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L.A. mayor signs off on developer fee to fund affordable housing

Very high rents price many people out of homes in California cities. To raise money for the development of affordable housing, the Los Angeles City Council voted in favor of a fee ordinance that would collect fees from developers. Mayor Eric Garcetti’s signature made the linkage fee official, and it is expected to cost developers within the city $93.7 million to $114.3 million annually, according to a report prepared by the Department of City Planning and Housing and Community Investment Department.

The market values of neighborhoods will determine the fee tiers. Residential fees will charge developers $8 to $15 per square foot. Commercial developers will be obligated to pay $3 to $5 per square foot. The city intends to rebuild its depleted affordable housing trust fund with collected fees.

City planners based the fee structure on studies that evaluated the costs that developers could realistically afford. Because the fees did not appear too onerous for builders, city council members who had held reservations about the linkage fee’s potential to discourage development eventually gave their support because of the severity of the affordable housing crisis. Exemptions from the linkage fee include building projects such as grocery stores, hospitals, schools or developments with some affordable units.

When a developer begins to plan a project like a housing subdivision, an attorney could provide guidance about zoning and fees. This information could enable an entrepreneur to calculate the viability of a project before making financial commitments. In addition to evaluating local regulations, an attorney could prepare documents like purchase agreements and investor contracts. A legal review of property disclosures could also inform clients about hidden liabilities.

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