Policy

There are many policies and programs at the state and local levels that can encourage linkage programs and provide political leverage for them.

Create state level policy that promotes local linkage programs

While state governments do not establish linkage fee programs, they can create a policy environment that encourages local jurisdictions to do so.

• Smart growth planning. Efforts to address sprawling development increasingly recognize the negative impacts of commercial development in areas with inadequate affordable housing. State programs to help municipalities develop balanced growth should promote and encourage linkage fees as an effective tool to address the jobs/housing mismatch.
• Public subsidy accountability.  The movement to challenge decades of tax giveaways to attract businesses is growing. State policies to increase accountability from businesses who benefit from the public sector can legitimize the concept of linkage fees and provide supporting data to linkage campaigns.

Encourage the development of regional linkage programs

Jobs-housing imbalances do not occur only within a municipality. In fact, they are increasingly regional problems. So when some locales within a region have linkage programs, and others do not, it creates an uneven playing field in both the economic and affordable housing arenas.
 
A regional commercial linkage program would help level that field by creating an equivalent climate for business in each locale and a regional commitment to housing affordability. Without cross-jurisdiction collaboration, achieving region- wide balance between commercial growth and housing production is extremely challenging.

The Chicago region is developing a regional linkage program where fees are paid by municipalities rather than developers, calculated from increasing commercial tax bases. (See Case Studies for details.) Other innovations on a regional scale should be encouraged.

Ensure that local jurisdictions target resources to affordable housing

Mechanisms to ensure that linkage fee revenue is dedicated to affordable housing production are critical to a program's success. If linkage fee revenue goes into a municipality's general operating budget, the funds are vulnerable to budget crises, and it is more difficult to ensure that resources are spent on affordable housing. 

• Housing Trust Funds. Housing trust funds are public funds established by legislation, ordinance, or resolution to receive specific revenues, which can only be spent on housing. They generally have specific income eligibility requirements for the housing they build.
• Inclusionary Housing.  Inclusionary zoning requires or encourages that a percentage of housing units in new residential developments be made available for low- and moderate- income households. Inclusionary housing programs are primarily funded through reducing costs to developers, as through density bonuses, but they sometimes require additional subsidies. Linkage programs can provide those funds.