Over Austin's objections, Texas Senate votes to ban 'linkage fees'

Austin and other Texas cities attempting to address issues of housing affordability likely will have to do so without the benefit of so-called “linkage fees” on new development, after the state Senate on Thursday joined the House in voting to ensure such fees can’t be implemented.

The Senate voted 27-4 to approve an amended version of House Bill 1449, which bans cities from charging fees “on new construction for the purposes of offsetting the cost or rent of any unit of residential housing.”

No Texas city has enacted such charges, known as linkage fees. But Austin Mayor Steve Adler has said he thinks the fees should be a potential tool for municipalities, and an Austin city task force cited the fees last month as a pillar in a plan to raise $600 million over 10 years to help buy and preserve affordable housing for minorities.

Proponents say linkage fees are a mechanism to “link” new development with a means of solving some of the community problems development can create, such as gentrification. The fees have been used in California, Colorado and other states. Under the tentative plan floated by the Austin task force last month, a linkage fee of $2 per square foot would have been charged on new construction in the city.

But state Sen. Jane Nelson, R-Flower Mound, who introduced HB 1449 in the Senate on Thursday, called linkage fees “essentially a tax on a new development to subsidize low income housing in other areas.”

Nelson offered a successful amendment to the bill, however, making clear that some other efforts to address housing affordability — such as density bonus programs — will be allowed.

Under density bonus programs, developers can voluntarily agree to certain affordability measures in exchange for authorization to build more market-rate units than they otherwise could have under existing zoning.

The state Senate gave the amended version of HB 1449 final approval with no discussion. Democrats Kirk Watson of Austin, Judith Zaffirini of Laredo, Borris Miles of Houston and Jose Menendez of San Antonio voted against it.

The House now will have the option of concurring with the Senate’s version or requesting a conference committee to reconcile the differences. State Rep. Ron Simmons, R-Carrollton, originally sponsored HB 1449.

Some industry groups, such as the Texas Association of Builders, have come out in opposition to linkage fees, saying they will exacerbate housing-affordability issues by driving up housing costs for everyone. Nelson echoed that criticism on Thursday, saying she thinks the impact of linkage fees is “the opposite of the stated goal.”

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