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What A Defunct Steam Plant And A Sinking Road Have To Do With Affordable Housing

Margaret J. Krauss
90.5 WESA
A road repair project nearly derailed a proposed development in Squirrel Hill.

Flats on Forward seemed like it would have been a no-brainer for the people who make decisions about how to spend Pittsburgh's $10 million annual investment in affordable housing. The mixed-use project from nonprofit developer ACTION-Housing, Inc. would create 43 apartments in the heart of Pittsburgh’s Squirrel Hill neighborhood. But some unexpected costs nearly derailed the whole effort.

By most counts Pittsburgh is short some 20,000 units of affordable housing, and the number continues to grow. Meeting the need, while always a challenge, seems even more daunting against the backdrop of vast housing insecurity revealed by the ongoing coronavirus pandemic.

The city’s Housing Opportunity Fund, or HOF, is often a final stop for affordable housing projects; through its Rental Gap Program it can make the kind of last-piece-of-the-puzzle loans nonprofit developers need to make their numbers work. Earlier this month, the fund’s advisory board debated such a situation at Flats on Forward, at the corner of Forward and Murray Avenues.

It would be ACTION’s second affordable development on that corner. In 2019 the group worked with Jewish Residential Services to build the 33-unit Krause Commons, where half of the apartments were reserved for people with physical or intellectual disabilities.

All of the units planned for Flats on Forward would be affordable to people who make at or below 60% of area median income, which is less than $50,000 for a family of four, according to 2020 household income estimates in Allegheny County. Of the 43 units five would be affordable to people earning less than 30% of area median income, 17 units for people earning less than 50% of area median income and 21 units at or below the 60% level. All of the units would be deed-restricted to remain affordable for 40 years.

A yes vote seemed like a foregone conclusion: building in Squirrel Hill would help the city meet a 2015 federal rule known as Affirmatively Furthering Fair Housing. It says that not only can municipalities not discriminate when it comes to housing, but that officials must work to reverse patterns of racial and economic segregation. (The Trump administration officially removed the rule in 2020. In January of this year the Biden administration issued an executive memorandum to the Department of Housing and Urban Development that laid the groundwork to replace it).

Megan Confer-Hammond of the Fair Housing Partnership of Greater Pittsburgh said Squirrel Hill is a prime example of understanding fair housing. 

“Squirrel Hill has a four percent Black alone population in a city with a 23.2 [percent] Black alone population,” she said, citing American Community Survey data.

Furthermore, Squirrel Hill is considered a “high opportunity” neighborhood with great transit, good public schools and a grocery store.

“I think this is a fantastic project and philosophically definitely support it,” said Adrienne Walhona, a Housing Opportunity Fund advisory board member.

But there were a lot of long, heavy silences during the meeting. ACTION-Housing needed $750,000. This one project — which creates just 0.002% of the units the city ultimately needs — represented nearly a tenth of the fund’s annual budget.

The real kicker is that ACTION needed the loan not for the building itself, but to fix Maeburn Road, a cost of nearly $1 million, said Linda Metropulos, a special consultant to ACTION and its former director.

“In essence, this project is paying for infrastructure repairs for the city of Pittsburgh,” she said.

Maeburn Road looks like any number of side streets in the warren of stately old apartment buildings in Squirrel Hill South; even the sign that declares “Road Closed” doesn’t seem particularly noteworthy. But a stretch of snow largely unbroken by footprints or tire tracks leads to a towering concrete stack which, taken together, hint at a very expensive problem.

The stack belongs to a now-defunct steam plant tucked in an underground vault that used to warm this part of the neighborhood. In its state of disrepair it destabilized Maeburn Road, and in turn, a retaining wall that separates the street from some shuttered businesses down a slight hill to the north. 

“We basically have to fill in the steam plant,” said Corey O’Connor, the city councilor for the area, then rebuild the wall and then repair the road.

Perhaps unsurprisingly, none of the surrounding property owners — which includes the city — wanted to take that on.

“It’s been a struggle,” said O’Connor. “There were a lot of people pointing fingers … that doesn’t get a project done.”

Ultimately, ACTION Housing had to find a solution, said Metropulos.

“But no one’s going to pay for city infrastructure repairs, other than some city-related entity,” she told the HOF’s advisory board.

It’s not uncommon for developers to have to pay for infrastructure, but doing so often means hiking rents, something affordable housing developers don’t want to do. Board member Jerome Jackson said covering the cost of road repair seemed like a slippery slope.

“It kind of opens the door for the city not to do infrastructure and then having more people come through us to get that done,” he said.

The Urban Redevelopment Authority also limits how much money any one project can ask for. HOF board member Mark Masterson said approving Flats on Forward meant blowing through that.

“And it’s going to be hard to say no to that as we go forward with other projects that come in,” he said.

Ultimately, a kind of fluke came to the rescue. In December, city council approved a one-time allocation for the Housing Opportunity Fund from money originally dedicated to the Mon-Oakland Connector project. Since the HOF hadn’t planned on that money originally, the board decided it could go to ACTION.

O’Connor said it shows just how scarce resources are; one hiccup like Maeburn Road could derail a project.

But Metropulos is more hopeful. She said there’s a whole community of people now working to expand the funding landscape for affordable housing.

They are “recognizing how hard this is and yet how important it is,” she said.

The Urban Redevelopment Authority gave Flats on Forward the final seal of approval at its February meeting.