Referendum Drive Aimed At Overturning Fee Increases Kicked Off Friday

A referendum drive aimed at overturning a fee increase imposed by the City Council on commercial building projects began Friday.

The campaign is being run by the Jobs Coalition, a group of more than 50 small businesses, organizations and community groups that oppose the 23-year-old fee, which helps fund affordable housing projects.

If the group obtains enough signatures, the City Council will have to decide whether to rescind its action on the levy or place the issue before voters. The coalition needs to collect about 34,000 valid signatures by Jan. 23 to qualify to be placed on a ballot.

The council voted 5-4 in November to put the so-called "linkage fee" back to 1.5 percent of the total construction cost of a project. The rate was halved in 1996.

The increase—affirmed in a separate council vote two weeks ago—is to be phased in over two years.

Developers of certain types of buildings will see far larger hikes, ranging up to 744 percent for warehouses or storage facilities, according to city documents.

The city's independent budget analyst estimates that increases would amount to 402 percent for office developments, 418 percent for research and development projects, 639 percent on hotel construction and 675 percent on retail building.

Former San Diego Mayor Jerry Sanders, now president and CEO of the San Diego Regional Chamber of Commerce, has called the fee a "jobs tax" that could push the city's economy back into a recession.

"Pursuing this referendum is not our preference," Sanders said at a news conference. "We would rather work together with the City Council, but they forced us into this position, and we'll do whatever is necessary to protect all San Diego businesses—large and small—and the thousands of men and women they employ throughout our region."

Sanders said a combination of volunteers and paid signature-gatherers will be at shopping centers throughout the city. He said the group has made numerous proposals to fund affordable housing, a need he called "critical."

Sanders predicted the hit to businesses and jobs will be "severe," but the impact on affordable housing will be minimal, since the funds will lead to construction of only about 100 units annually. About 45,000 families are on a waiting list for housing assistance, according to city officials.

Mark Cafferty, the CEO of the San Diego Economic Development Corp., said companies deciding whether to move to or stay in San Diego are factoring the additional costs into their deliberations. Some might end up in neighboring cities or unincorporated county areas, he said.

"I know that was not the intent of our City Council members when they made this decision," Cafferty said. "This 'jobs tax' is a very bad idea at a very bad time for business."

Interim Mayor Todd Gloria, who supports the fee increase, said it is only one part of many solutions needed to solve the affordable housing problem. The municipal code calls for the levy to be reviewed annually, a procedure that wasn't followed for years.

Other supporters noted that San Diego was found to be the nation's second-least affordable housing market in the U.S. in a study released in a couple of months ago. They contend that is just as likely to keep businesses from moving to San Diego.

Affordable housing advocates have been looking for new funding sources ever since the state did away with redevelopment agencies. A portion of the tax revenue generated by redevelopment projects was dedicated to affordable housing projects.

Several referendums seeking to undo council actions have qualified over the past few years.

Last week, the council voted to place the controversial update of Barrio Logan zoning regulations before voters in the June primary election. A couple of years ago, ordinances involving medical marijuana and restrictions on big box superstores were repealed because council members didn't want to spend city funds on elections.

—City News Service