The City of Pittsburgh will start 2024 with an extra $30 million to invest in affordable housing. On Thursday the city announced that the Urban Redevelopment Authority closed on a bond whose proceeds will be dedicated entirely to the preservation and creation of affordable homes.
Affordable housing is “absolutely critical for our communities to continue to thrive and allow our residents to remain in the place they call home,” Mayor Ed Gainey said in a statement Thursday.
At the moment, officials say they expect to channel the funding through the URA’s existing affordable housing programs. However, the agency is required to produce a report for Pittsburgh City Council in 90 days that will lay out in greater detail how the money is to be spent.
Gainey first announced the initiative in June, but the idea had to win approval from both the board of the URA and City Council. And the city must repay the debt with taxpayer dollars at a rate of $2.5 million per year. Despite ultimately supporting the effort, members continued to express misgivings about the cost to the city – as well as council’s role in directing the bond money.
Paying back the debt is expected to cost roughly $60 million over the more than 20-year life of the bond. And it struck some councilors as a bad deal to pay $60 million to get just half that. However, Lavelle noted at the time that $2.5 million debt service per year amounted to less than 0.5% of the city’s annual budget.
Speaking Thursday, Lavelle said URA and city officials expect to spend the money “quickly,” in the next three years. Being able to invest that much in the city is worth the long-term costs, he said.
“I think it’s our moral obligation to stabilize as many of our citizens’ housing situations, now, as possible.”
The city’s most recent housing needs assessment found that Pittsburgh needed far fewer affordable units than once believed: 8,200 instead of the 14,500 identified by a study in 2016. However, the report found that the shrinking gap between who needs affordable housing and the supply of it wasn’t due to an increase in supply, but because people either left Pittsburgh or became unhoused.
The city is seeing “unprecedented demand” for affordable housing, said Lena Andrews, vice president of real estate development for ACTION-Housing.
“Every time we finish construction on a new affordable housing development, we have a long waitlist within days,” Andrews said. “This new housing bond is an investment in creating and preserving affordable housing, which is an investment in ensuring that all Pittsburghers have a safe and stable place to live.”
The city and the URA have a “collective vision for an inclusive and vibrant,” Pittsburgh, Susheela Nemani-Stanger, who leads the URA, said in a statement. She said the agency is eager to support projects that respond to the unique needs of the city’s communities.
Officials initially expected the bond issuance to bring in between $25 and $40 million, a sum far less than Councilors Lavelle and Ricky Burgess imagined when they first proposed a bond for affordable housing several years ago.
And while he’s excited about the bond closing and its potential, Lavelle stressed that public money alone will never be able to solve the affordable housing crisis. Instead, he hopes private investors, such as the area’s large nonprofits, foundations, and banks, will partner with the city to make even greater commitments.
The bond shows that “we’re doing all that we can, but unfortunately, all that we can is simply not enough,” he said. “If we’re stretching our wallets as thin as possible, we would ask that some of our wealthier partners be willing to stretch theirs a little more.”
