Article 4 — Nonresidential Development Linkage Fees

(a) Purpose. The purpose of this article is to provide a mechanism for producing housing affordable to extremelylow, very-low, lower and moderate-income households by requiring applicable nonresidential development pay a fee to be used for the production, preservation, or rehabilitation of affordable housing units.

(§ 1, Ord. 1506-NS, eff. October 9, 2008, as amended by § 5, Ord. 1543-NS, eff. October 8, 2010, and § 11, Ord. 1719-NS, eff. November 24, 2023)

A linkage fee is hereby established for each Nonresidential Use Category contained in this article, and shall apply to the following types of nonresidential developments:

(a) New Construction and Additions. Any new nonresidential project(s) or addition(s) to an existing nonresidential project proposing to construct or add seven thousand five hundred (7,500) square feet or more of new gross floor area. (b) Intensification of a Nonresidential Use. Any intensification of a nonresidential use changing seven thousand five hundred (7,500) square feet or more of gross floor area from one (1) Nonresidential Use Category to a more intensive Nonresidential Use Category where no fee has previously been paid. For purposes of this article, intensification of a Nonresidential Use means change from one (1) Nonresidential Use Category to another Nonresidential Use Category having a higher linkage fee amount.

(c) Conversion from Residential to Nonresidential Use. Any conversion of a residential project changing seven thousand five hundred (7,500) square feet or more of gross floor area to a nonresidential use.

The Community Development Director or designee shall be responsible for determining the applicability of this article to individual projects.

(§ 1, Ord. 1506-NS, eff. October 9, 2008)

The following nonresidential developments are exempt from the provisions of this article:

• (a) A nonresidential development that has received its discretionary approvals from the City prior to the effective date of the ordinance adopting this chapter.

• (b) Building projects undertaken by a public agency for public purposes.

• (c) Exterior alterations and improvements to existing nonresidential projects.

• (d) The reconstruction of any structures that have been destroyed by fire, flood, earthquake or other act of nature provided that the reconstruction of the project does not result in an increase in the total gross floor area by seven thousand five hundred (7,500) square feet or more.

• (e) Nonresidential developments otherwise exempt by law.

• (f) School - Private non-profit grammar and high schools and colleges.

(§ 1, Ord. 1506-NS, eff. October 9, 2008, as amended by § 1, Ord. 1539-NS, eff. July 23, 2010)

For the purposes of determining the linkage fee amount to be charged, every nonresidential development will be classified into one of the following nonresidential land use categories:

• (a) Retail/Commercial – includes but is not limited to retail, service, and commercial uses, or similar uses in a center, stand alone, or mixed use format;

• (b) Office – includes but is not limited to professional, administrative and medical offices;

• (c) Lodging – includes but is not limited to hotels and motels and extended stay facilities;

• (d) Industrial – includes but is not limited to warehouse, manufacturing, storage and similar facilities; or,

• (e) Research and development or flex space – Includes but is not limited to research and development, laboratory or other similar facilities. Flex space is space that can be used in a combination of office, warehouse, industrial and or showroom usage.

(§ 1, Ord. 1506-NS, eff. October 9, 2008)

(a) Listed Uses.

• (1) The City Council shall adopt by resolution a standardized list showing the assignment of specific uses to each Nonresidential Use Category.

(2) In the case of land uses not designated in said City Council resolution, the Community Development Director shall determine the appropriate Nonresidential Use Category from those set forth in Sec. 9-10.404 above, based on the characteristics of each use.

(b) Multiple Uses in a Project. When a nonresidential development includes uses that are classified in different categories (e.g., a project with some retail commercial space and some office space), then the total gross floor area of the project shall be allocated among each applicable Nonresidential Use Categories for purposes of determining the fee.

(§ 1, Ord. 1506-NS, eff. October 9, 2008)

For each nonresidential development subject to the provisions of this article, linkage fees shall be calculated by multiplying the fee amount by for each applicable Nonresidential Use Category by the gross square footage of the new construction, addition, intensification or conversion. No application for a building permit or discretionary permit for a nonresidential development subject to this article shall be deemed complete for processing unless the application contains:

(a) A calculation of the gross floor area of the nonresidential development and the gross floor area of each intended nonresidential use in the nonresidential development.

(b) For nonresidential developments involving the conversion of residential use to nonresidential use, or the intensification of a nonresidential use to another nonresidential use, the gross floor area of each existing use and each intended use.

(§ 1, Ord. 1506-NS, eff. October 9, 2008)

(a) In calculating an applicable linkage fee, the Community Development Director or designee shall impose those fees in effect at the time of issuance of the building permit or, if no building permit is required, at the time of issuance of a certificate of occupancy.

(b) Where applicable, linkage fees shall be paid prior to the issuance of a building permit or, where no building permit is required, prior to the issuance of a certificate of occupancy, as applicable. (§ 1, Ord. 1506-NS, eff. October 9, 2008)

Linkage fee rates shall be set by City Council resolution and may be adjusted biennially in an amount equal to the percentage change, if any, in the construction cost index for Los Angeles for the corresponding period of time, as published by Engineering News Record/McGraw-Hill Construction Weekly or any substitute index that the City Council may adopt by resolution. In the future, the City Council may direct that further study and analysis be conducted to determine the continuing reasonableness of current fees and whether linkage fees should be applied to additional Nonresidential Use Categories.

(§ 1, Ord. 1506-NS, eff. October 9, 2008)

All linkage fees shall be deposited into the Affordable Housing Trust Fund established by Article 2 of this chapter. (§ 1, Ord. 1506-NS, eff. October 9, 2008)