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St. Petersburg wants to charge developers to help build affordable housing

The city needs more affordable housing and has proposed charging impact fees for new construction. But what if Tallahassee interferes with St. Pete’s plan?

ST. PETERSBURG — City leaders took the first step toward forcing developers to help pay for badly-needed affordable housing.

The City Council on Thursday considered charging developers a $1 impact fee per square foot of new residential, industrial and commercial development. The proposal would also charge a 10 cent fee per square foot of new office development.

The new fees could raise an estimated $20 million or so over the next 10 years to pay for building new affordable housing units, according to St. Petersburg officials.

Council members gave tacit support to the proposal, voting 4-3 in a committee meeting to send the ordinance to the first of two votes before the full council. But even the council members who voted yes expressed reservations about the office development fee, because the city is trying to incentivize building more of it.

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The discussion about “linkage fees” — so named because they’re trying to address the effect new development has on housing affordability — has been almost two years in the making. Council could take up the proposal by May or June.

In its current form, the proposal calls for charging developers the fees when they seek building permits. Those monies would go into a fund that would be used to build or promote affordable housing.

The state has a similar affordable housing trust fund, but lawmakers in Tallahassee have raided it 12 years in a row for other causes, leaving little money to build new housing. Over the years, the city has seen less and less money from both the state and federal government to help tackle the problem.

“In many ways, we’re on our own," said Rob Gerdes, the city’s neighborhood affairs administrator, who presented the draft ordinance to council members.

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He outlined the four ways the new fund could be spent: It could primarily be used to build homes for those who earn up to 120 percent of area median income, which is calculated by the federal government. It could also be used to buy land to build homes for earners within that range; to preserve existing affordable housing for families in that range; and to provide assistance to first-time home buyers who make up to 140 percent of area median income.

The linkage fee is a key piece of Mayor Rick Kriseman’s affordable housing plan, called “For All, From All.” It calls for up to $60 million in city funds to be spent over 10 years for the “construction and preservation of 2,400 affordable multi-family units.”

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The remaining $40 million will come from Penny for Pinellas funds, money raised through the South St. Petersburg Community Redevelopment Area, modest investments from the state and federal government and a developer fee charged to those who wish to build additional square footage on their properties. It also includes $10 million worth of city-owned land officials hope to use for affordable housing.

Some council members expressed reservations about the 10 cent fee’s impact on office space construction, which city leaders say is sorely needed. Gerdes said the fee was kept low so that it wouldn’t impede that development.

Council member Amy Foster, who sits on the Homeless Leadership Alliance of Pinellas board, criticized the draft ordinance for not being more ambitious. A study commissioned by the city said St. Petersburg could legally charge up to $16 per square foot of industrial development, up to $37 per square foot of commercial development and up to nearly $92 per square foot of hotel development.

“If anything, my feedback is I don’t think it’s strong enough,” Foster said.

Still, she made the motion to advance the proposed ordinance in the hope that city staff would consider council’s feedback in the final ordinance.

Voting no were council members Robert Blackmon, Brandi Gabbard and Ed Montanari. Lisa Wheeler-Bowman was absent.

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Blackmon raised concerns that there is a bill being considered in the Legislature which could block the city from using impact fees to build affordable housing. City attorneys said they’re aware of the bill, but have not yet determined whether it would prohibit the city from taking action.

He also discussed his own proposal: Convince state lawmakers to allow surplus building permit fees to be used to pay for affordable housing. St. Petersburg has collected more than $15 million in building permit fees, but only needs roughly $6 million to cover the building department’s operations.

But in Florida, spending that $9 million surplus of building permit fees on affordable housing is illegal. City leaders will know what action the state will or will not take by March 13, the day the legislative session is set to end.