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RATIONALE <br />Nonresidential development that increases employment demand like Ir * <br />industrial, retail, and office development can increase housing demand <br />nearby and put additional pressure on housing prices. This is compounded in <br />markets like Louisville where housing production has not kept pace with <br />demand. By establishing a per -square -foot fee on commercial development Housing Goals <br />to fund affordable housing projects, the City could "link" these two types of <br />development to support more equitable growth. This <br />action item would need to carefully consider balancing <br />any potential linkage fee with the City's economic vitality <br />goals. <br />DESCRIPTION <br />The City can use revenues from a commercial linkage <br />fee to provide direct financial support for new income - <br />restricted housing projects. The City should first study <br />WHAT IS A COMMERICAL <br />LINKAGE FEE? <br />A commercial linkage fee is a policy <br />tool that requires developers of new <br />commercial projects to contribute a <br />fee to be used to fund the <br />construction of affordable housing. <br />the impacts a fee might have on commercial <br />development in Louisville to ensure a fee is appropriately calibrated to both help the City meet <br />affordable housing goals and avoid financially overburdening new commercial projects that can help <br />the City meet economic development and employment goals. Additionally, commercial linkage fees <br />require a nexus study that first demonstrates a reasonable relationship between the fee and <br />affordable housing before the fee program can be adopted. <br />ACTION 2.3 BENEFITS SUMMARY <br />INCOME LEVEL <br />GEOGRAPHIC <br />HOUSING <br />ACTION TYPE <br />COST <br />SERVED <br />SCALE <br />PRODUCTION <br />POLICY <br />CHANGE/FINANCIAL <br />LOW-INCOME <br />CITYWIDE <br />SUPPORT <br />Louisville Housing Plan Part 4: Housing Strategies and Actions 38 <br />