Commercial Impact Fee

The SVO Voices Opposition to Commercial Linkage Fees

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On behalf of The Silicon Valley Organization (The SVO), we are writing to express our strong opposition to any consideration of a commercial linkage fee, which would create disincentives for employers to add jobs and would worsen San Jose’s already poor “jobs- to-housing” imbalance. By way of background, The SVO is the Silicon Valley’s premier business advocacy organization representing 1,400+ companies that employ nearly 300,000 workers and we represent our membership as the region’s largest Chamber of Commerce.

On June 12th earlier this year, the city council directed staff to drop any consideration of a commercial linkage fee on the premise that this policy would further worsen San Jose’s jobs-to-housing imbalance. We agree with city staff’s analysis on finding 4b of the Civil Grand Jury report, which states that any additional cost to the commercial development and construction process would likely diminish such developments in San Jose. Furthermore, the San Jose City Council recently hosted a study session on the “cost of development” which also released findings that soaring construction and labor costs have made private development practically unviable in most parts of the city. An additional commercial linkage fee would only exacerbate these problems, instead of addressing the root cause of the problem: housing supply.

There is no doubt that Silicon Valley is experiencing an unprecedented housing crisis and there have been numerous local and state solutions designed to tackling this problem. However, the key systemic solution is to drastically increase housing supply at all income levels throughout the region. The best way to accomplish this goal is to relax regulatory barriers established by San Jose’s general plan in order to significantly accelerate housing production. Through Mayor Liccardo’s leadership and his 15-point housing plan, we are already looking at ways to build an additional 25,000 new housing units through multiple, nuanced policy approaches. As such, commercial impact fees only worsens San Jose’s job- to-housing imbalance, has the potential to greatly increase commercial displacement of low to middle-income jobs, and does not address our regional housing crisis.

For these reasons, The SVO strongly urges you to reject this proposal. 

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The SVO Supports Removal of Commercial Impact Fee from Council Priorities List

On behalf of The Silicon Valley Organization (The SVO), our 65 member board of directors and our 1,400 member businesses, I would like to express our support for the removal of Item 8 on the Council Priorities list, Commercial Impact Fee for Affordable Housing.

In 2016, a broad coalition of Silicon Valley leaders placed Measure A, the Affordable Housing Bond on the ballot to help address the significant issues facing the county around housing for the homeless, workforce housing and the overall lack of housing. Measure A passed with overwhelming support and will allow the County to borrow up to $950 million by issuing general obligation bonds. Bond proceeds could only be used to acquire or improve real property.

According to the ballot language, bond proceeds from Measure A would “provide affordable local housing for vulnerable populations including veterans, seniors, the disabled, low and moderate income individuals or families, foster youth, victims of abuse, the homeless and individuals suffering from mental health or substance abuse illnesses, which housing may include supporting mental health and substance abuse services.” Up to $150 million in bond proceeds could be used to assist moderate income households. Of this $150 million, up to $50 million may be used to provide housing that is affordable for moderate income individuals and families; such portion, for example, could be used for first-time homebuyers or to promote housing that is in proximity to employment.

Pursuing another impact fee for affordable housing does not make much sense considering we have not even had an opportunity to issue a single bond under this new funding mechanism let alone add additional obstacles for business and employment growth here in our city.

San Jose Silicon Valley Chamber of Commerce Opposes Commercial Linkage Fee Nexus Study

On behalf of the San Jose Silicon Valley Chamber of Commerce (SJSV Chamber), we would like to express our respectful opposition to item 4.4, Potential Research Regarding an Impact Fee on Commercial Development to Fund Affordable Housing, on the December 15 agenda.

The first line of the SJSV Chamber’s Guiding Principles states that we, as an organization of member businesses, advocate for “job growth and retention….because a healthy regional economy enhances the quality of life for all within the region”. That line succinctly explains our position on this issue: while we recognize the need for affordable housing solutions and, in the future, may even be open to such a discussion on commercial linkage, we do not feel that the present time is an appropriate one to discuss this as a policy option.

San Jose is experiencing growth in both the commercial and residential arenas while continuing, as a city, to work towards the goal set forth in General Plan 2040, calling for a much improved ratio between jobs and employed residents. As this growth accelerates, we feel it would be poor policy to send a message to potential commercial developments that a linkage fee could be imminent, and agree with Mayor Liccardo, Vice Mayor Herrera, and Councilmembers Jones and Manh Nguyen that this feasibility study should be postponed until San Jose achieves a 1:1 jobs/employed resident ratio.

We respectfully would ask for your opposition to item 4.4 on the December 15 agenda, and look forward to working with you in the future to achieve long-term economic growth for the City of San Jose.