Pittsburgh’s median home price is up more than 9 percent since this time last year, according to Zillow. It also estimated the city's median monthly rent is more than $1,300 -- a jump from 2016. As the city’s real estate market and apartment rates boom, some lower earners haven’t been able to keep up.
While the concept of affordable housing might appear simple (why not just build housing everyone can afford?), it’s as complex as the jargon that surrounds it - TIFs, LERTA, CDBGs. And though Pittsburgh’s mayoral candidates agree there needs to be more of it, they differ in how it should be funded.
Candidate and City Councilwoman Darlene Harris didn’t specify a plan for increasing affordable housing, but she said she’s in favor of the Housing Opportunity Fund passed by city council last year, though she abstained from voting for it.
The fund, which would help pay for affordable housing for families of four earning less than $40,000 a year, didn’t come with a revenue source. One funding idea proposes raising the city’s realty transfer tax, currently at 4 percent. But that wouldn’t get Harris’ vote.
“No, because our transfer tax is the highest transfer tax and I have never voted for a tax increase,” Harris said.
Pittsburgh does have the highest realty transfer tax in Allegheny County, and Harris suggested that federal Community Development Block Grants should be the main source of funding for affordable housing. But under President Donald Trump’s proposed budget, CDBGs would be eliminated.
Unlike Harris, candidate Rev. John Welch said he would support an increase in the realty transfer tax, but he also thinks the formula for building affordable housing needs an adjustment.
“There's been too heavy a tilt for market rate,” Welch said. “Typically, there would be a 20 percent low-income in a development, or 80 percent market rate. I'd like to see 30-30-40 or 40-30-30, deeply affordable, moderately affordable and market, in that order.”
Mayor Bill Peduto agreed that the current system for building affordable housing, using low income tax credits, falls short. He said he’d approve increasing the realty transfer tax, but thinks other options exist, such as asking the city’s four, big non-profits – UPMC, Highmark, the University of Pittsburgh and Carnegie Mellon University – to chip in. That’s something Welch advocated for, as well.
Peduto also said it’s time to look beyond traditional incentives. He suggested making public subsidies proportional to the amount of affordable housing being built.
“If you want to receive public subsidies, we're asking for 20 percent,” he said. “You want to do 40, we're more interested. Now, let's start looking at the tax credits to see if we can help. Let's combine that with programs through the Housing Authority. And then, the big one is how do you turn 17,000 vacant properties, lots and abandoned buildings into homeownership?”
Peduto was referring to the land bank. Peduto said once the land bank, years in the making, is finally up and running, the city will be able to turn over properties with ease.
“That will clear the liens, clear the titles, allow us to be able to sell properties for a dollar and be able to allow nonprofits and other community development corporations, and others, to be able to purchase those and turn them back into homes for people to live in.”
Part of the reason Pittsburgh has so many vacant properties is population loss. And the problem persists, Welch said.
“Much of the stories in print and television say Pittsburgh is growing, or if you listen to the administration, say Pittsburgh is growing,” Welch said. “But Pittsburgh is developing, it's not growing. So one, we have to find ways to take care of those who already live here in the city of Pittsburgh, take care of our own, before we try to do all that we can to bring newcomers to the city.”
That idea, “taking care of our own” was echoed by Harris.
“I think you should be thinking of everyone,” Harris said. “And not just bringing those from the outside. But actually you have to think about the people that actually live here.”
Peduto said he is acting on behalf of Pittsburghers. He pointed to the city’s fight over New Pennley Place. The property owners decided to replace low income housing with a high-end mixed use development and residents came out against the plans in East Liberty, saying they felt steam-rolled in the process. The city Planning Commission, noting community opposition, voted against approving it. Now, construction is on hold and the owners are suing the city. Peduto said there's a bright side.
“But maybe the good news is that we now have an understanding within the development community that if you aren't willing to work with the community in the neighborhoods, then you really shouldn’t propose the proposal in the beginning,” he said.
Building is happening all around the city, but the condos rising along Pittsburgh’s rivers and commercial districts don’t touch the city’s affordable housing gap. According to the Affordable Housing Task Force, there’s a need for more than 17,000 units in Pittsburgh.