Board Members Say Pittsburgh’s Housing Fund Is Working, And May Soon Need More Money

Dec 10, 2019

The advisory board of Pittsburgh’s Housing Opportunity Fund met Tuesday morning to discuss how to fund its six programs in 2020.

The fund's most popular programs are the Homeowner Assistance Program, which funds repairs that allow people to stay in their homes; the Housing Stabilization Program, which provides emergency rental assistance; and the Rental Gap Program, which makes loans to developers to create or maintain affordable rental units. The advisory board voted unanimously to approve a draft 2020 allocation plan that emphasizes those programs.

Despite being relatively new, the HOF has seen enormous demand for its programs since disbursements began in 2018. Board members say they still need to collect more data to understand where the greatest needs are and how best to answer those needs efficiently and effectively. Anecdotally, however, demand seems likely to outstrip the housing fund's resources in 2020.

Board member Mark Masterson, who is executive director of the North Side Community Development Fund, says because the board was appointed halfway through 2018, it's had two years' worth of funding to work with in just 18 months. But that cushion will soon disappear.

“We’re going to run out,” he said. “We’ve got to find a way to make the [funding] pie bigger.”

Masterson said the increase in the realty transfer tax, which feeds the fund, was projected to generate about $10 million each year. However, it’s likely to pull in $12 or $13 million in 2019, a fact that defies early fears that the tax would depress home buying in the city. There may be a way to capture that additional money, he said.

During public comment, Bob Damewood of Regional Housing Legal Services said one of the advisory board’s responsibilities under the law is to make recommendations.

“If there’s not enough funding for things like rental gap and for housing stabilization, someone needs to tell that to the mayor, someone needs to tell that to city council,” he said.

The board has to look creatively at all options, said board member Joanna Deming, executive director of the Fineview & Perry Hilltop Citizens Councils.

Housing “is the foundation for people to have a stable, healthy life,” she said. “It’s exciting that there’s funding dedicated, but we can’t make cuts other places because we’ve dedicated this funding. We actually need more funding.”

Mayor Bill Peduto’s proposed 2020 budget would cut funding to the URA by 35 percent, a move expected to harm the agency’s ability to fund housing and small business programs.

Before approving the draft plan, board members discussed how best to answer the most urgent needs, while not prematurely cutting funding to programs that may simply need reworking or increased advertising. All of those considerations must be made within the law’s broad restrictions. The legislation required 50 percent of the annual allocation to be used for households that earn 30 percent of area median income, 25 percent for households that earn 50 percent or less of area median income, and the remainder for households that earn 80 percent or less of area median income.

In addition, Housing Opportunity Fund staff will continue to adapt programs or possibly create new ones to respond to the city’s needs, said Jessica Smith Perry, who for many months was a one-person department.

“We’re kind of in a new age,” she said. “A few years ago the Affordable Housing Task Force studied these issues, and now we are charged with doing what we can to fix them and correct them. Like all good processes, it’s evolving.”

Also on Tuesday, the fund's advisory board approved a $650,000 investment in phase four of the Larimer/East Liberty Choice Neighborhoods, a federally-funding, multi-phase housing program. The money will be used to help cover the cost of building affordable rental units.

The 2020 draft allocation plan will be posted to the URA’s website for public comment. The advisory board will approve a final draft plan at its January meeting before heading to the URA board for approval.