Commercial Linkage Fee

Background

The Commercial Linkage Fee (CLF) is an impact fee levied on commercial development for the provision of affordable housing.

The San José City Council voted on September 1, 2020 to begin charging commercial developers fees to fund affordable housing.

The Commercial Linkage Fee is a one-time impact fee that applies to new and existing Non-Residential Projects in San José that either add gross floor area or change the existing building use

The production and preservation of affordable housing is a priority for City Council. Commercial Linkage Fee funds will be used to facilitate the production of Affordable Housing for Extremely Low, Very Low, Low, and Moderate Income households within San José.

Fees are based on the 4 geographic subareas of the City and their ability to sustain the CLF fee. The rates are established in the Fee Resolution and are increased by the Engineering News Record (ENR) Construction Cost Index in January of each year. Increases go into effect on July 1 of each year. The first rate adjustment for the program will be effective as of July 1, 2022.

September 1, 2020 Agenda Item

March 8, 2022 Agenda Item

The San José City Council voted on December 11, 2018 to pursue a nexus and a feasibility study on a potential commercial linkage fee in San José. The Council also decided to include a separate study for the Downtown Core.

Nexus Study - July 2020
Feasibility Study - July 2020

COMMERCIAL LINKAGE FEE Satisfaction Plan

CLF Satisfaction Plan for Developers (PDF)

For any questions regarding the Commercial Linkage Fee or to submit the application for review, please email csjlinkagefee@sanjoseca.gov .

Resources

Application of Fees

Application Type	FEE PER application
Standard Application	$1,366
Abbreviated Application	$1,228
Deferred Payment or Credit Agreement	$3,225

Commercial Linkage Fee Schedules

All non-residential projects and non-residential portions of a project will pay the fee based on the gross square footage of each use included in the proposed project by geographic subarea as follows:

Downtown and Nearby

Non-Residential Use	Fee Per Square Foot
Office (≥ 100,000 sq.ft.)	$14.31 when paid in full prior to the Building Permit issuance, $17.89 when paid at Scheduling of Final Building Inspection. Eligible for deferred payment pursuant to subsection E.
Office (<100,000 sq.ft.)	0$ for all square footage ≤50,000 sq.ft. and $3.58 for all remaining square footage. When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply.
Retail	No fee ($0)
Hotel	$5.96 - Excluding Common Area. When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply.
Industrial/Research and Development (≥100,000 sq.ft.)	$3.58 - When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply. Eligible for deferred payment pursuant to subsection E.
Industrial/Research and Development (<100,000 sq.ft.)	No fee ($0)
Warehouse	$5.96 - When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply.
Residential Care	$7.16 - Excluding Common Area. When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply.

North San Jose and Nearby; West San Jose Urban Villages

Non-Residential Use	Fee Per Square Foot
Office (≥100,000 sq.ft.)	$5.96 - When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply. Eligible for deferred payment pursuant to subsection E.
Office (<100,000 sq.ft.)	No fee ($0) for ≤50,000 sq.ft. and $3.58 for all remaining square footage. When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply.
Retail	No fee ($0)
Hotel	$5.96 - Excluding Common Area. When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply.
Industrial/Research and Development(≥100,000 sq.ft.)	$3.58 - When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply. Eligible for deferred payment pursuant to subsection E.
Industrial/Research and Development (<100,000 sq.ft.)	No fee ($0)
Warehouse	$5.96 - When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply.
Residential Care	$7.16 - Excluding Common Area. When paid in full prior to the Building Permit issuance a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection 100% of the fee will apply.

Edenvale and Monterey Corridor

Non-Residential Use	Fee Per Square Foot
Office (≥ 100,000 sq.ft.)	$5.96 - When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply. Eligible for deferred payment pursuant to subsection E.
Office (<100,000 sq.ft.)	No Fee ($0) for all square footage ≤50,000 sq.ft. and $3.58 for all remaining square footage. When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply.
Retail	No fee ($0)
Hotel	$5.96 - Excluding Common Area. When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply.
Industrial/Research and Development	No fee ($0)
Warehouse	$5.96 - When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply.
Residential Care	$7.16 - Excluding Common Area. When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply.

South and East San Jose Growth Areas

Non-Residential Use	Fee Per Square Foot
Office	No Fee ($0)
Retail	No Fee ($0)
Hotel	$5.96 - Excluding Common Area. When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply
Industrial/Research and Development (≥100,000 sq.ft.)	$3.58 - When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply.
Industrial/Research and Development (<100,000 sq. ft.)	No Fee ($0)
Warehouse	$5.96 - When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply.
Residential Care	$7.16 - Excluding Common Area. When paid in full prior to the Building Permit issuance, a 20% reduction in the payment will apply. When paid at Scheduling of Final Building Inspection, 100% of the fee will apply.

City of San José