It seems like there is just no end to the ways bureaucrats dream up to try and choke the market based economy. The newest twist is to slap a “linkage fee” on new developments in the city of Los Angeles. Based on mayor Eric Garcetti’s proposal, the Los Angeles City Council would levy a $5.00 per square foot fee on new commercial development and a $12.00 or more per square foot fee on new market rate residential development. Residential projects with five or fewer units would pay $1.00 per square foot. This additional revenue would go toward City controlled low income housing. Is this just another way to allow government to take over the free market economy? Do we really want the government to take over the housing industry? What would be the effect of this additional expense on new developments?

There is no question about the shortage of housing in Los Angeles or, for that matter, in the entire state of California. Housing is becoming more and more expensive, rents are getting astronomically high. Who is to blame?

There are several factors to consider. California is, was and always will be the place to be, mostly because of the marvelous geographical location, climate and the excellent opportunities for people to advance their careers. You can ski for almost 8-10 months of the year, like this past rainy season has proved with its enormous amount of precipitation. You can play tennis for basically 12 months of the year. The lifestyle of Californian people is very casual, just to name a few good things.

As they say California is not following any trend, it sets the trend.

When I came to California in the ’70s the population was about 18 to 19 million people, if I remember correctly. Today we’re pushing 40 million people. That means that we are more than twice as many people for the same real estate area as we had 40 some years ago. People come and will continue to come to California in the future. There is no stopping of that. Supply and demand dictates that more people on the same real estate area will push prices up. It’s basic supply and demand economics.

How do we help control prices going thru the roof? The answer is YIMBY instead of NIMBY!

In my humble opinion we shouldn’t make developments more expensive as this new “linkage fee” would do, but make construction and development less expensive and less regulated. One of the best ways to achieve this is the newly passed ADU state law or SB 1069 that allows a second unit on the same lot. As everybody knows by now, this very new state law allows a second unit to be built on the same lot with very relaxed parking requirements. By promoting private low budget developments like ADU’s, the government or cities would be kept out of the business of development and small developers including owners of single family homes would build thousands and thousands of low income units for rent. More available rental units will definitely push rental prices down. If the government wants to help, it should provide low interest rate loans to help home owners to build these second units. People know better than the government what is good for them if you give them an incentive to make a profit.

Very soon the popular phrase of Not in my back yard or NIMBY will change to: Yes in my back yard or YIMBY.

Keep the government out of the business of development and

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