California Apartment Association

Following the lead of other cities in the Silicon Valley, San Jose is considering a fee on new development to help pay for affordable housing.

This article in the Silicon Valley Business Journal focuses on a San Jose City Council vote approving a “nexus study” on such a fee.

Under California law, before a local jurisdiction can assess a development fee, it must establish a nexus, or “reasonable relationship,” between the purpose of the charge and the type of development proposed. Many jurisdictions have interpreted the word “reasonable” quite broadly, leading to fees that may not truly fulfill the nexus requirement.

The article quotes Joshua Howard, executive director of the California Apartment Association’s Tri-County Division, who says growing the supply of rental housing is a better way to bring down prices than is the imposition of impact fees.

Also, see this column that Howard penned in April about the unfairness of housing impact fees to subsidize affordable housing — and other, community-based ways to address the issue.

Think about it: Impact fees on new residential housing discourages developers from moving forward on projects. And if they do build, those fees will likely get passed on to residents, making the homes less affordable — counter to the fees’ purpose.