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Getting Business To Pay For Housing?

The City of Petaluma, CA is considering a workforce housing linkage fee on new commerical, industrial, and retail development in the city.

Petaluma to weigh housing fee

Countywide plan rejected by SR would tap business developers

By JOSE L. SANCHEZ Jr.
THE PRESS DEMOCRAT

A majority of Petaluma City Council members say they probably will vote to require commercial developers to help pay for affordable housing despite Santa Rosa’s rejection of such a fee.

"Lack of affordable work-force housing is, and will remain, the No.1 challenge for making Sonoma County attractive to new businesses and viable for existing ones," Councilman Mike Healy said.

The "Sonoma County work-force housing linkage fee" is being promoted as a means for the county and its cities to help provide housing in one of the nation’s least affordable real estate markets.

The rationale for the proposed fee, which was crafted by a committee representing Sonoma County and its nine cities, is that a growing work force attributable to new businesses increases the demand for housing.

If the county and all nine cities adopted the fee, it would would raise approximately $35 million to build 1,200 housing units over five years.

But the Santa Rosa City Council last week rejected the fee, citing concerns that it would make the city less competitive in attracting new business.

Some elected officials have warned that the effort would collapse unless all of the cities, or at least the largest ones, adopted the fee.

The fee hasn’t been considered by the county or any other city since Santa Rosa acted, but the Petaluma City Council is set to discuss it for a second time Sept. 22.

It tentatively approved the jobs-housing fee last month.

If the council affirms its decision, the city could begin charging a one-time fee of $2.08 per square foot for new commercial space, $2.15 for new industrial space and $3.59 for new retail space.

In addition to Healy, Mayor David Glass and council members Pamela Torliatt and Mike O’Brien also said they would probably vote for the fee.

"If we’re going to build up our tax base by providing jobs, these people will need a place to live," O’Brien said.

Glass said "commercial construction does place a burden on housing and the burden of providing such housing should be spread as broadly as possible."

Councilman Keith Canevaro said he thinks the fee is a good idea but wants to hear from the Petaluma Area Chamber of Commerce before he makes a final decision.

Councilman Mike Harris said he is undecided and wants to talk about the possibility of delaying the fee until economic times are better.

Healy and Glass said they would be willing to consider delaying the fee’s implementation for a year or two.

Councilman Bryant Moynihan said he is against the fee.

"I think it will have a negative impact on businesses that already offset employees’ housing costs through their paychecks," he said.

City Manager Mike Bierman said the fee makes sense only if it’s assessed countywide.

"Unless all the cities are doing it, it could place those who have it at a competitive disadvantage," he said.

Torliatt, on the other hand, said having the fee would give Petaluma an advantage in attracting businesses.

"Providing affordable housing for employees should be an incentive for those businesses," she said.

Canevaro, who used to live on the San Francisco peninsula, said some cities there have the affordable housing fee and some don’t.

"Those cities that have a fee are not worse off than the other ones," he said, adding that "any responsible business that comes in should be interested in a program that provides affordable housing."

You can reach Staff Writer Jose L. Sanchez Jr. at 762-7297 or [email protected].

http://www.pressdemocrat.com/local/news/05housingfee_b1.html

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