Boston: Mayor Walsh signs 42 percent increase in Linkage fees into law

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BOSTON - Thursday, March 11, 2020 - Mayor Martin J. Walsh today signed a 42 percent increase in Boston's Linkage fees into law. The Linkage Program requires large scale commercial developments over 100,000 square feet in Boston to pay into funds that support the creation of affordable housing and workforce development. The increase will raise the current fees to $15.39 per square foot, of which $13.00 will be dedicated to affordable housing and $2.39 will be dedicated to workforce training. The increase was proposed by Mayor Walsh in February and follows unanimous approval by the Boston Planning & Development Agency Board and Boston Zoning Commission.

"It is critical that we leverage Boston's development market to maximize funding for affordable housing creation and workforce training, while being mindful of the economic challenges caused by COVID-19," said Mayor Walsh. "By increasing Linkage requirements, we will substantially increase revenue streams to fund the affordable housing and workforce training programs that will help our residents recover and thrive in a post-COVID economy."

Boston's Linkage program was created in 1986 to leverage funding for affordable housing and workforce training through payments by large-scale commercial real estate development. The increase follows the passage of legislation in January, originally introduced by Mayor Walsh as a Home Rule Petition, to give Boston more flexibility in adjusting Linkage fees. Previously, the Boston Planning & Development Agency (BPDA) was only allowed to adjust Linkage every three years based on inflation. The new law allows Boston to adjust the required payment and program guidelines, allowing Linkage to be more closely aligned with the market and fund affordable housing and workforce development programs.

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The new rate was determined based on several years of feasibility assessments, conversations with developers and advocates, and the current economic climate. The $15.39 per square foot marks a 42 percent increase from the current Linkage rate of $10.81 per square foot, of which $9.03 is dedicated to affordable housing and $1.78 is dedicated to workforce development.

"We've had candid, constructive conversations with developers spanning more than a year, and we're convinced that the economics of real estate development in Boston, even in this difficult period, can handle this increase," said BPDA Director Brian Golden. "We estimate that this increase could potentially generate tens of millions of dollars in additional Linkage funding annually. That means more affordable housing and a lot more job training programs for Boston's most vulnerable residents. We believe we are prudently ensuring that development in the City continues to address the needs of Bostonians."

"The COVID-19 pandemic has deepened long-standing housing and income inequities and the Mayor's action will give us additional resources to ensure that the City's recovery from this crisis is more equitable and inclusive," said Emilio Dorcely, CEO of Urban Edge, a community development corporation serving Roxbury and Jamaica Plain. "We thank Mayor Walsh for taking decisive action to increase the linkage fee to provide more funding for affordable housing and job training, now that the Legislature has authorized the City of Boston to shape its own development policy."

"The Job Training Alliance is thrilled that the Mayor is taking immediate action to increase job linkage fees after the passage of the Home Rule Petition," said Amy Nishman, Senior Vice President of Strategy for JVS Boston. "With so many Bostonians out of work, the City needs major investment in job training so communities that have been devastated by the pandemic can access career-ladder jobs in industries that are hiring."

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The funds collected through Linkage are administered by the Neighborhood Housing Trust through the Department of Neighborhood Development (DND) and the Neighborhood Jobs Trust through the Mayor's Office of Workforce Development. Since 2014, the Linkage program has generated over $80 million to support affordable housing and job training from new development. Linkage provides industry-recognized job training to over 2,000 Boston residents annually. Since the onset of the COVID-19 pandemic, the Neighborhood Jobs Trust has dedicated $2.4 million to emergency supports for workforce and education programs, as well as specialized job training for workers preparing to enter the IT/tech and healthcare industries. Since its inception in 1986, Linkage has generated more than $200 million for affordable housing and workforce training.

In 2020 alone, new development approved by BPDA is expected to generate over $43.2 million in Linkage fees to support affordable housing, and over $8.5 million in Linkage fees to support job training programs. This increase will allow the BPDA and City of Boston to further leverage development to increase these funding streams. The BPDA and DND are committed to future reviews of Linkage fees following Boston's economic recovery from the COVID-19 pandemic.

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