Pittsburgh Mayor Ed Gainey announced Wednesday that his administration is following through on its commitment to make the city more affordable: Working with the Urban Redevelopment Authority, the city intends to issue bonds expected to raise $25 to $40 million to create and preserve affordable housing.
“We know that this is just the beginning,” Gainey said. “It will take time to yield results. However, the need to move with urgency is upon us.”
Quianna Wasler, the URA’s chief housing officer, said that the money will jump-start housing construction that has been held back by supply-chain issues and rising interest rates.
“This announcement today intends to catalyze Mayor Gainey and the city’s commitment to ensuring that Pittsburgh is a city where we all can have a place to call home and thrive,” she said.
The idea of using bonds to finance such a goal isn’t new: Pittsburgh city councilors Daniel Lavelle and Ricky Burgess have for several years pursued the idea of a bond issue just for affordable housing.
But there are few details available on the proposed bond issue. Partly that’s due to the reality of the bond market: No one can say exactly how much money a bond issue will provide because that’s partly determined by interest rates, and expectations surrounding interest rates. It’s also not entirely clear how the proceeds will be invested, though city officials say they will use it to provide additional funding to existing programs, rather than to begin new initiatives.
The city will continue to make a $10 million allocation to the Housing Opportunity Fund, and the URA will continue to administer that fund. Much of the new money from the bond issue will likely be directed toward the existing fund’s programs, said Kyle Chintalapalli, URA board chair.
“For expediency, we’re not looking to stand up new programs,” he said. “We want to focus … on bringing units to market as quickly as we can.”
For now, city officials say their primary focus is currently on getting ready to go out to market. Pittsburgh City Council must pass legislation that will allow the URA to issue bonds, and the URA board must also approve.
Though officials expect money to go out the door quickly, Pittsburgh City Council will annually budget $2.5 million for the next quarter century to pay down the debt.
Gainey and others stressed that local, state, and federal governments must continue to find ways to preserve and create homes affordable to people with lower incomes. URA executive director Susheela Nemani-Stanger committed to doing so.
“We’re all about leverage here,” she said. “We can use this funding to leverage additional state and federal resources.”
A bond issue would be the latest in a series of efforts to expand the city’s housing supply. This year, the URA launched a program to help first-time homebuyers. Thanks to federal pandemic-era dollars, it also launched a program to convert underused downtown office space to apartments, and to help finance developers who preserve existing affordable units.
