A group of local lawmakers are proposing state legislation meant to give the City of Pittsburgh the power to better manage property taxes in neighborhoods where longtime residents are at risk of being priced out.
The region has experienced rapid economic growth and increased development in recent years, much of it concentrated in neighborhoods including Lawrenceville, Bloomfield and Garfield. For some who have owned homes in those areas for years, the rising property values have come with higher property taxes they can’t always afford.
The proposed legislation would amend a state law to allow second class cities like Pittsburgh to create a long-time owner occupant tax exemption program (also known as LOOP). The program would freeze property taxes for homeowners who meet certain criteria, including owning and living in their homes for a designated period of time — typically anywhere from five to 15 years. Philadelphia has a similar program in place.
At a press conference in Bloomfield on Wednesday, Democratic state Sen. Jay Costa said the legislation is just part of a larger conversation around affordable housing in the Pittsburgh region. He noted many people at risk of being pushed out by high property taxes are the very people that made neighborhoods like Bloomfield desirable in the first place.
“The bottom line is, we're trying to take steps to make certain that folks are able to stay in their homes, particularly in the communities in the neighborhoods that they've resided in for so long,” Costa said.
Costa attempted to pass the legislation twice before, but said it got pushed aside in favor of other housing programs, like the Whole Homes Repair Act.
Current state law allows second class counties to create their own programs that would defer or exempt tax increases. Allegheny County has tried to establish such a program before. In 1990, officials enacted an ordinance limiting annual property tax increases for longtime residents to 5%, but a county judge ultimately struck it down. He ruled that new property owners can’t be taxed at a higher rate than their longtime neighbors.
Costa said he hopes to avoid a legal challenge this time around by learning from the county’s past mistakes. The legislation he introduced would allow the city to create its own longtime owner occupant program that hopefully avoids some of the pitfalls of the county legislation.
If the legislation is passed at the state level, Pittsburgh City Council would still need to pass legislation creating a LOOP in the city. Council would establish the eligibility parameters for participation in the program.
“The more tools that we have in our toolbox, the more we can keep our neighborhoods stabilized,” said Pittsburgh Mayor Ed Gainey. “We don't want to push out. We want to bring in. And in order to do that, we know we have to be affordable. And part of being affordable is having the right tools to be able to do it.”
State Rep. Sara Innamorato sponsored one of the past legislative attempts in the state House. Innamorato is also a Lawrenceville resident and said she has seen the effects of rising property taxes firsthand. She stressed that implementing LOOP is a matter of equity.
“Establishing LOOP would allow Pittsburgh to protect homeowners — from young, working-class families to seniors on fixed incomes — across the city from unaffordable property taxes. People who have been here for a long time deserve to stay in neighborhoods that they have invested in,” she said. “So bottom line, this is about protecting the people and families who have been here during the tough times while also welcoming new neighbors and new investment.”
Innamorato, a Democrat, is also running for Allegheny County Executive. She said a LOOP could also help solve some of the county’s ongoing property tax assessment issues; if elected the next county executive, she would revisit the idea of an Allegheny County LOOP.
Costa said he and Innamorato hope to move the legislation forward in both chambers when they reconvene in April.
