BPDA Board approves plan to increase commercial linkage fees

The Boston Planning and Development Agency (BPDA) Board of Directors has voted to increase Linkage fees collected by large scale commercial developments over 100,000 square feet in Boston to support the creation of affordable housing and workforce development. The approval seeks to increase the current rate by 42 percent, or $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 proposal was introduced by Mayor Martin J. Walsh earlier this week, and will now be brought to the Boston Zoning Commission for a vote.

“It is critical that we are leveraging Boston’s development market to maximize funding for affordable housing and workforce training, while balancing the economic reality of 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 proposed increase follows the passage of legislation last month, originally introduced by Mayor Walsh as a Home Rule Petition, to give Boston more flexibility in adjusting Linkage fees. Previously, the 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.

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 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 proposed increase will allow the BPDA and City of Boston to further leverage development to increase these funding streams.

Following tonight’s approval, the increase must be approved by the Boston Zoning Commission and signed by the Mayor prior to becoming effective. 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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