Boston tightens rules that get developers to help pay for solving urban problems

If Robin Hood were an urban planner, he would have loved the concept of linkage. The controversial regulation extracts payments from downtown builders on projects above a set size limit -- and then uses the money to ease housing crises and other inner-city problems that are considered ``linked'' to urban growth.

At a time when federal subsidies for low- to moderate-income housing have all but evaporated, this kind of self-reliant problem-solving has caught the imagination of city planners -- and the ire of a few developers -- across the United States.

San Francisco pioneered the concept in 1980. Since then, less-stringent versions of the program have been adopted in Hartford, Conn., Seattle, and Miami. Two other cities, Princeton, N.J., and Santa Monica, Calif., have enacted mandatory policies on a smaller basis.

But Boston stole the spotlight last month when Mayor Raymond L. Flynn proposed beefing up the Hub's relatively lenient program.

The mayor's plan, which will likely be approved early next year, raises the developer's fee from $5 to $6 per square foot in buildings of more than 100,000 square feet. It also shrinks the extended payment period from 12 to seven years while nudging the initial payment up from date of occupancy to the first day of construction. In effect, the plan nearly doubles the linkage rate.

But perhaps more significant is that Mayor Flynn hopes to create the nation's first job-training program financed by linkage fees.

Flynn's proposal is an attempt to resolve the ``paradox of growth,'' says Ralph Memolo of the Boston Redevelopment Authority. ``Our city has had a decade of prosperity,'' he explains, ``but [the wealth] hasn't reached many of its residents, except through the great pressures it's put on the housing and job markets.''

Blacks, in particular, have been losing ground during the city's economic boom, according to a study released last week by eight black Boston-area professors. Inner-city residents hold only 25 percent of the downtown jobs, notes Prof. Phillip L. Clay of Massachusetts Institute of Technology. And the city's office boom has brought in affluent new employees willing to pay more for housing than community residents.

Mr. Memolo agrees that ``people in close-in neighborhoods are getting closed out.''

But with linkage fees, he says, the city can funnel some wealth from new developments directly to people in the neighborhoods, rather than relying on funds to trickle down.

Most developers ``have accepted linkage as merely an additional cost of doing business in Boston,'' says Thomas Hynes, executive vice-president of Meredith & Grew, a real estate consulting firm.

``Their main concern is that the wedge of linkage is widening,'' he says. ``But they won't make a strong case to oppose it; they're more interested in getting their projects accepted.''

While only one developer in both Boston and San Francisco has tried to buck the system, several developers say that linkage makes them scapegoats for problems beyond their control.

Housing crises in both cities have been intensified by declining federal subsidies, narrow tax bases, and limits on property taxes, they contend -- and many urban-affairs specialists agree.

But city planners defend their actions. ``We're simply asking developers to meet the [housing] demand they're generating,'' says Lou Blazej, chief of special projects for San Francisco's planning department. With most builders paying their fees up front, the city's housing program has received $24 million over the last five years.

Boston, however, has not received a single penny from its linkage regulations, even though enough construction projects have been approved to earn the city $45 million between 1987 and 1999. The first payment probably will not be made until April 1987, when the finishing touches are made on International Place, a $414 million office complex that will overlook Boston Harbor.

When payments do begin to flow, they will come in at a clip of about $2.5 million a year, says Neil Sullivan, the mayor's policy adviser.

That's a significant figure, but not nearly enough to cover the $30 million void left by vanished federal grants and loans. But raising linkage fees may force development into outlying areas.

``It's going to be interesting to see how [linkage] plays out,'' says Douglas Porter, director of development-policy research at the Urban Land Institute, in Washington, D.C. ``Theoretically, one might expect a siphoning-off of development from downtown areas into the suburbs. That might already be the case in San Francisco, where developers have claimed that the market has a lot of vacancy.''

Strict linkage regulations have, in part, leveled off development in San Francisco. But in Boston, says Mr. Hynes of Meredith & Grew, linkage ``hasn't slowed down or stopped development.''