An $800,000 investment by the nonprofit Neighborhood Allies is providing funding for a nonprofit developer to purchase 69 units for renovation into affordable housing in Homewood.
The organization invested the funds in the nonprofit Pennsylvania Affordable Housing Corporation, which according to the organization, has led several other large affordable housing renovations in Homewood, the Mon Valley and Beaver County.
"This project will be a significant addition to a Pittsburgh market facing a critical need for more affordable housing," said Matt Madia, vice president of real estate services at Neighborhood Allies. “Investing in real estate projects that address such critical community needs and are led by Black developers is how Neighborhood Capital promotes a more equitable community development system.”
Media said these properties were originally part of a larger set of around 141 units, called the Bethesda Homewood Properties, which were declared uninhabitable in 2017 by federal housing regulators. The buildings lost their rental subsidy, and many of the residents struggled to quickly find new housing that would accept Section 8 housing vouchers, according to an Allegheny County study.
Shawn Taylor, the president of the Pennsylvania Affordable Housing Corporation, hopes to bring back many of the residents who were forced to leave.
“Many folks were moved to the Mon Valley or to other parts of the county and away from transportation, away from family and away from culture,” Taylor said.
The new investment is enabling the corporation to buy 11 buildings, which contain 69 units. The funding has also helped the corporation to leverage a total of $6.2 million in commitments to renovate the first 30 units. Taylor said these 69 units will reduce the number of abandoned and blighted units in Homewood South by more than 10%.
The corporation is buying the units from Omicelo LLC, which bought 141 units back in 2018 and promised to spend more than $2 million to bring them back up to code. Omicelo didn’t immediately respond to an email request for information about the status of the other 72 units.
Taylor said the renovation of 30 units near Brushton Avenue and Tioga Street is being funded by the Urban Redevelopment Authority and the Pennsylvania Housing Finance Agency and through a mortgage from Dollar Bank. Taylor said the investment by Neighborhood Allies to purchase the buildings helped facilitate that funding.
“If it were not for Neighborhood Allies, this portfolio would have been lost to the general market from market-rate developers,” Taylor said.
The plan is to finalize the funding agreements by this fall, Taylor said, and begin gutting the interiors and renovating the insides of the units soon afterward. The corporation has already begun applying for permits. The units are mostly one-bedroom units but include some two- and three-bedroom units as well, Taylor said.
The housing must be reserved for low-income residents for at least 20 years, Taylor said. 90% would be reserved for residents making 50% or less of the area median income, and the other 10% of the units would be reserved for people making 20% or less of the median income. Once the units are built, Taylor said, the corporation would retain ownership but hire a professional management firm to take care of the properties.
Taylor said units can cost upwards of $400,000 to renovate, so the corporation has to work hard to keep their costs down and still provide “decent, safe, quality, affordable housing.”
“I have to get inspections from the [Housing Authority of the City of Pittsburgh]. We have to get inspections from the city. And so these are all quality,” Taylor said. “Now, are they going to have a granite countertop? No, but they'll probably have a good-quality laminate top. Everything will be new. Everything will be up to date, and everything will be energy-efficient.”
The Neighborhood Allies investment is the largest ever awarded by the nonprofit for housing, Madia said. The group typically awards a handful of investments per year, but until now the largest had been $250,000 to $300,000.
Madia hopes that some of this housing could help satisfy the housing needs of some of Allegheny County’s unhoused population. The county is currently involved in an effort to create 500 units in 500 days.
The investment is part of the nonprofit Neighborhood Capital program, which was originally seeded $2 million to do similar work in the Hill District. But the program has grown to over $5 million now, Madia said, and it includes projects in low-income areas in Pittsburgh and just outside the city, such as Wilkinsburg. Neighborhood Allies has a long history in Homewood, Madia said, and community groups in Homewood support the housing-renovation project.
“Because of the trauma associated with this Bethesda Homewood portfolio,” Madia said, “there was a real symbolic value to making sure that these units can get back online and be of high-quality and properly managed and energy-efficient and healthy for the people who live there.”
