Pittsburgh is on the hunt for more money to fund affordable housing
Despite some initial concerns, Pittsburgh City Council is expected to create a committee to spur creation and preservation of affordable housing at its meeting on Tuesday. The new group is one of council’s latest moves to find money for housing beyond the realty transfer tax.
In 2016 a task force said Pittsburgh faced a shortage of 17,000 affordable units, and housing pressures have continued to mount in the five years since.
“The city is becoming whiter and richer,” said Councilor Ricky Burgess. With increases in area median incomes, the price of housing goes up. Last month he proposed creation of the Affordable Housing Implementation and Finance Committee to find a way to create housing at all levels, “whether [for] the very poor, the moderately poor, or working lower-middle class.”
It’s a simple piece of legislation that “puts all the people who are involved in affordable housing in one space,” he said.
The members of the group would include: Mayor Ed Gainey or his designee; the director of city planning, Karen Abrams, or her designee; the chief economic development officer, Kyle Chintalapalli; the head of the Urban Redevelopment Authority, Greg Flisram; the head of the Housing Authority of the City of Pittsburgh, Caster Binion; the head of Pittsburgh’s Land Bank, Diamonte Walker; and two to four city council members who serve on the boards of the URA, HACP, and land bank.
While officials do sometimes gather informally, Burgess said his bill creates a schedule and an expectation for everyone to “come together and to collaboratively create more money and more opportunity.”
At a meeting in mid-February councilors questioned the value of creating another group to look at affordable housing, and of having the conversation take place anywhere but at the council table.
“I think that these are ways to avoid City Council,” said President Theresa Kail-Smith. “I want to be supportive but I don’t understand why this can’t be done under the current structure.”
Councilor Erika Strassburger asked how the new committee would interact with existing groups, such as the advisory board of the Housing Opportunity Fund, as well as groups that work on related issues such as mass transit, food access, and schools.
“How will this group not be an inward-looking group that just bounces around their own ideas?” she asked.
Burgess said he would be happy to work with all members of council to ensure the group remains focused and on-task. In response to concerns about circumventing council, he noted that the majority of development rests on land control.
“There’s no way to get around council when it comes to development, because we control the land,” he said.
Despite those initial concerns, there has been no further discussion of the bill, and no amendments were made to the legislation. At a meeting last week, council recommended the bill for a final vote on Tuesday.
But councilors have expressed broader concerns about how affordable housing is funded. Kail-Smith asked if raising the realty transfer tax — from 4.0 to 4.50% in 2018, and then 4.5 to 5.0 percent in 2020 — was the right way to address the challenges facing the city.
“If we’re still having this problem with affordable housing … maybe we need to revisit that,” she said.
Councilor Daniel Lavelle said the real issue is the city hasn’t gone far enough: while the increased tax sends $10 million to the Housing Opportunity Fund, “it’s a drop in the bucket compared to what we actually need,” he said.
That’s why Burgess and Lavelle have long urged City Council to float a bond whose proceeds could help finance housing construction. They first introduced the idea in 2017 while council members searched for ways to underwrite the Housing Opportunity Fund they had created the year before.
Exactly how a bond could be paid off remains unclear. Lavelle noted that the committee may not even recommend a bond issue, and he and Burgess both said the city has to incentivize the private market, as well.
“Eighty percent of all the resources are in the private market,” Lavelle said. “Government can’t fix this problem alone.”