Linkage

History of Linkage

Linkage programs emerged at the historical confluence of three trends in the political economy of U.S. cities. The first trend was the phenomenal growth in the office-based economy of major cities. From the late 1970s through most of the 1980s, cities across the country experienced a huge increase in the amount of commercial office space in their downtown cores. These high-rises were home to the expanding business service industries and corporate management facilities that have come to dominate U.S. urban areas since the mid-1970s.

At the same time, in the United States, many urban areas were experiencing a severe housing affordability crisis. The crisis of affordability seemed most acute in those cities experiencing economic transformation to corporate service and management functions.

The final trend that led to local housing solutions such as linkage was the almost complete withdrawal of the federal government from housing assistance during the 1980s. Under the Reagan administration, the U.S. Department of Housing and Urban Development (HUD) budget authorization fell by more than 80% from its high mark in 1978. At the same time that housing conditions were worsening in inner cities, the federal government was dramatically reducing its contribution to assisted housing for low-income persons. This led local officials as well as low-income advocates to look at local sources of housing assistance. The healthy commercial office space markets in many cities provided an opportunity to raise needed housing capital.

The City and County of San Francisco was the first major area to adopt a housing linkage program. San Francisco's program came about as the result of community activities concerned about the deleterious effects of rapid downtown office space construction. These activists were also housing advocates, and they proposed to link an exaction on office developers to the production of affordable housing. Their initial expectation was that the exaction would significantly reduce the rate of growth in downtown construction. In fact, San Francisco office developers were not deterred in any way by the linkage fee. The rate of office construction continued unabated, and the program generated close to $30 million in revenues over the first 5 years.

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