City of San Diego Housing Fee Ordinance Repeal Referendum (June 2014)
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will not appear on a ballot
|Voting on Housing|
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This citizen-initiated referendum targeted a recent council approved increase in the "Workforce Housing Offset" or "linkage fee". On December 10, 2013, the city council authorized an increase of the maximum one time fee imposed on developers from $1.06 to $5.32 per square foot. The fee would have varied based on different kinds of development. The revenue from the "Workforce Housing Offset" was earmarked for the construction of low and moderate income housing. The proposed increase would have brought in an estimated $10 million per year - enough to produce an estimated 100 units of housing per year. This would have amounted to a projected revenue increase of approximately $8 million, as the previous rate brought in about $2 million annually.
The Jobs Coalition, which consisted of over 50 businesses and organizations, submitted 53,107 signatures on January 22, 2014, in order to qualify this veto referendum on the housing fee increase for the ballot. A random sampling of these signatures yielded an estimate of 41,821 valid signatures, which was far more than the 33,866 required to qualify the measure for the ballot and give voters a chance to overturn the city ordinance. Since the Jobs Coalition petition was found to be valid, the city council had the choice to either rescind their ordinance or put the referendum on the June ballot, allowing voters the final say. On March 4, 2014, the council voted to rescind the housing fee themselves.
Campaign spokesman Craig Benedetto stated that the organization had spent $250,000 on the referendum petition effort as of January 22, 2014, which was operated through paid and volunteer signature gatherers, and that the committee was willing to spend whatever was required on campaigning and advertising.
Note:In this article, those who approved of a referendum and of the repeal of the housing fee increase, the intended outcome of referendum petitioners, are referred to as "supporters".
The coalition behind the referendum attempt against the "Workforce Housing Offset" ordinance was called The Jobs Coalition and consisted of approximately 50 small businesses, organizations and community groups.
The San Diego Regional Chamber of Commerce also disapproved of the housing fee. Jerry Sanders, the former mayor of San Diego and the president and CEO of the Chamber of Commerce, called the fee a "jobs tax" and claimed that it could send the city back towards an economic recession.
Arguments in favor
Those opposed to the fee increase and in favor of repealing it through a referendum argued that the over 400 percent increase on the fees associated with developing new, nonresidential buildings would result in a substantially detrimental effect to the economy, job growth and business in the city. Moreover, they claimed that it would not produce a significant number of low income housing units.
Sanders, who called the fee a "jobs tax," wrote, "It will certainly cause some businesses to scale back or eliminate expansion plans, which will reduce job growth. Other companies will take their business -- and local jobs -- elsewhere and many more simply won't consider moving to San Diego."
Sanders foretold that business and jobs would suffer greatly under the new housing fee rates, while the benefit to families needing housing assistance would be minimal. He pointed to the fact that about 45,000 families were on a waiting list for housing assistance, while it was estimated that only about 100 more housing units per year could be constructed with the new revenue.
- As of January 22, 2014, the Jobs Coalition had spent $250,000 on the referendum effort and, according to Campaign spokesman Craig Benedetto, was willing to spend whatever was necessary on campaigning and advertising to get the development fee repealed.
Note: In this article, those who approved of the housing fee ordinance and disapproved of the repeal of that ordinance, which was the intended outcome of the referendum petitioners, are referred to as "opponents."
- San Diego Housing Federation
- Council President and Interim Mayor Todd Gloria
Susan Tinsky, who was the executive director of the San Diego Housing Federation, said that she saw irregularities and possible violations of election law among signature collectors for the referendum. She cited the absence of the proper documents available for signers to read. She stated that the Housing Federation and referendum opponents might possibly file a lawsuit against the petition effort sometime in late January or early February of 2014.
Tinsky also said, "It's really unfortunate that a campaign led by the Chamber of Commerce and the business community is just throwing money behind a campaign to thwart the action of the City Council to assist in increasing workforce housing."
Interim Mayor Todd Gloria stated that he planned to re-affirm his support of the fee and wanted the city to "stop ignoring the affordable housing crisis facing San Diego's working families." He announced that he supported a vote of the people on the issue rather than repealing the ordinance directly from the council chamber, and he stated that he would urge voters to uphold the fee in June if put on the blalot.
The housing ordinance would have increased the non-residential development fee from .75% of 1996 construction costs to a full 1.5% of 2013 construction costs. The ordinance would have increased the cost per square foot of development according to the following table:
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- In 1990, the Workforce Housing Offset ordinance was established and the amount was determined by a certain percentage of the cost of construction. The rate was established at 1.5%, meaning to develop an office or hotel building, developers would have to pay a fee of 1.5% of the costs per square foot of constructing a new non-residential building. This amounted to $2.12 per square foot for office buildings in 1990.
- In 1996, the city council cut the rates in half leaving the maximum housing fee for developers at $1.06 per square foot of new building space.
- In 2009, the City Auditor stated that the revenues from this fee “are outdated, substantially lower than comparable cities, and were not adjusted as required by the municipal code, resulting in an estimated under-funding of $2.79 million for fiscal years 2006 through 2008.”
- In 2013, the city council passed the ordinance in question that raised the developer housing fee, or "Workforce Housing Offset" fee, to reset the rate, so that instead of paying based on 1.5% of the housing construction costs from 1990, developers were required to pay 1.5% of the housing construction costs of 2013. This amounted to an over 400 percent increase from a maximum of $1.06 per square foot to a maximum of $5.32 per square foot.
- On January 22, 2014, the Jobs Coalition submitted signatures to qualify a veto referendum on the 2013 ordinance.
Path to the ballot
The Jobs Coalition, which consisted of over 50 businesses and organizations, submitted approximately 53,107 signatures on January 22, 2014, in order to qualify a veto referendum on the housing fee increase. A random sampling of these yielded an estimate of 41,821 valid signatures, which was far more than the 33,866 required to qualify the measure for the ballot and give voters a chance to overturn the city ordinance. The San Diego County registrar of voters had thirty days from the submission date to verify the petition signatures. Since the Jobs Coalition petition was found to be valid, the city council had the choice to either rescind their ordinance or put the referendum on the June ballot, allowing voters the final say. On March 4, 2014 the city council voted to rescind the fee themselves.
Campaign spokesman Craig Benedetto stated that the Jobs Coalition, as of January 22, 2014, had spent $250,000 on the referendum petition effort, which was operated through paid and volunteer signature gatherers, and that the committee was willing to spend whatever was required on campaigning and advertising.
- U-T San Diego, "Housing fee referendum going to registrar of voters," January 21, 2014
- San Diego Housing Commission website, accessed January 22, 2014
- U-T San Diego, "Council repeals housing fee increase," March 4, 2014
- KPBS, "San Diego ‘Jobs Tax’ Referendum Supporters Submit 53,000 Signatures To Registrar," January 22, 2014
- U-T San Diego, "Registrar count begins on affordable housing referendum," January 22, 2014
- LaJolla Patch, "Jobs Coalition to Petition Fee Increase in San Diego," December 23, 2013
- Report to the City Council on the Workforce Housing Offset increase ordinance, accessed January 22, 2014
- San Diego Housing Commission Housing Impact Fee Ordinance (Workforce Housing Offset) presentation, accessed January 22, 2014
- U-T San Diego, "Housing fee referendum certified," February 18, 2014