Will We Be Priced Out? : Affordable Housing in Pittsburgh

Posted by Weenta Girmay

“What is affordable housing?”

That was the question that begun the round table style discussion titled “Affordable Housing for a Changing Landscape: Retaining Affordable Housing in Pittsburgh.”

*In the interest of full disclosure, I will state upfront that I work for the Bloomfield-Garfield Corporation, one of 3 sponsors of this event (other sponsors were BNY Mellon and Neighborhood Allies).

Held at the Kingsley Association Saturday May 10th, the panel was moderated by Paul Guggenheimer of WESA’s Essential Pittsburgh, and included:

  1. Jerome Jackson, Operation Better Block, Homewood
  2. Carl Redwood, Executive Director, Hill District Consensus Group
  3. David Weber, Housing Authority of Pittsburgh
  4. Tom Cummings, Program Director, Urban Redevelopment Authority
  5. Matt Smuts, Pittsburgh Community Reinvestment Group, Hazelwood Coordinator
  6. Christiane Leach, Greater Pittsburgh Arts Council
  7. Rick Swartz, Executive Director, Bloomfield-Garfield Corporation
  8. Fred Brown, Associate Director of Programming, the Kingsley Association, Larimer

Of the eight on the panel, Redwood answered Guggenheimer’s question most effectively: “affordable housing means you shouldn’t be spending more than 30% of your income on rent.” This is the standard according to the U.S. Department of Housing and Urban Development and a standard that many panelists cited repeatedly.

Guggenheimer presented a few statistics on the rise of housing costs, including a statistic from U.S. Census Data that concluded from 2007 to 2012, the average median rent for Pittsburgh raised from $529 to $649, a 22.7% increase.

In January of this year, Post-Gazette writer Brian O’Neill consulted with South-side based company REALStats to find that over the past 25 years in the City of Pittsburgh, “The average price of a home climbed 156.8 percent,” a fact that O’Neill proudly saw as an indicator of the city’s overall strengthening housing market. His article ended,

“Mayor Bill Peduto was wise to have his victory celebration in Homewood, and to say in his inaugural speech Monday that our city “glows with the hope of revived neighborhoods.” The next great deal on a home is waiting in a neighborhood yet to rise. 

Soaring home values are a double-edged sword, of course. Property taxes rise. Would-be homeowners and renters get priced out. I’m in my third (and final) home in a ward where the median value has quadrupled since 1988, and I couldn’t afford my asking price if I put it up for sale tomorrow.”

– “Rising Home Prices Tell Pittsburgh’s Uplifting Story,” P-G.

January 8th, 2014

Just as soaring home values are a double-edged sword, so are large numbers of vacant and abandoned property. “The City of Pittsburgh has anywhere from 13,000-17,000 vacant properties,” said Guggenheimer.

These properties can be seen as the ugly scar left from Pittsburgh’s boom-and-bust past, or as a golden opportunity for redevelopment, but a golden opportunity for whom?

Throughout the conversation on Saturday, panelists and audience members alike asserted that affordable housing is a struggle most deeply felt by people of color, particularly for the largely black communities in Pittsburgh with high concentrations of blighted property. At the start of the conversation, Redwood was vocal that he felt that there was a concerted effort to push black residents out of affordable housing and outside city limits, stating that in 1980, there were 100,000 black residents in the city, and as of 2010 there were 80,000. He gave the example of St. Clair Village, a 107-acre public housing project in the St. Clair borough of Pittsburgh that was built in the 1950’s, fell into disrepair, and was demolished in 2010.

Tom Cummings qualified Redwood’s statistics and said public housing was built when our city was two times its current population, accounting for some of the vacancy and tear down of public housing.

Christiane Leach, whose organization recently co-sponsored a Health and Housing Fair for Artists, gave a personal example of her struggle to become a homeowner in Pittsburgh, one that illuminated the silent barriers to homeownership that exist for people of color. She had “everything in order” yet was still outbid by “people from China, Korea, California.” This was after 3 years of looking for houses in Homewood, Larimer, and the Upper Hill, all places consistently left blighted and ignored.

“Cash is king,” she said, when it comes to real estate. That is to say, banks told her in order to get the house she wanted, they needed to see the full amount in cash upfront, something that usually only large developers have in hand.

The general term the panel used for these outside developers was “speculators.” Speculators are known to buy whole blocks of properties in struggling neighborhoods. That’s how a guy from Israel bought a whole block in Homewood, said panelist Jerome Jackson. These properties can be kept in limbo for years until the most opportune moment to flip them for profit, raising prices above livable, affordable rates.

Jerome Jackson of Operation Better Block standing in front of blighted properties owned by "speculators" in his neighborhood. Photo from the Post-Gazette.

Jerome Jackson of Operation Better Block standing in front of blighted properties owned by “speculators” in his neighborhood. Photo from the Post-Gazette.

Leach also challenged the root of affordability: poverty. “Why are people making $18,000?” she said. (The Extremely Low income limit for public housing assistance in Allegheny County for a family of 4 is $19,700; the Very Low is $32,800; the Low is $52,500) “This is a matter of how Pittsburgh decides to run itself.”

During the question-answer period, a black woman came to the podium and told a story similar to Leach’s. She made over $40,000 a year, outside the bracket for reliance on public housing assistance, yet like Leach she could not close on a house with city limits. Even with cash-in-hand, she settled on a home that had been foreclosed on in North Versailles. Leach later said she also settled–for a house in Swissvale–which she is in the process of closing on.

The main frustration for these two women was that although they had encountered discrimination in the housing process, it was difficult if not near impossible to prove it. The woman at the podium said that she had been a victim of redlining, and that people of color and women were especially being priced out of affordable housing options. “Thank you for saying that,” said Leach.

***

 Funds dedicated to developing affordable housing come from federal and state subsidies. According to the Housing Alliance of Pennsylvania, in 2012, over $30 million was cut from federal housing assistance in the state of Pennsylvania.

Given the lack of adequate federal funding, there were a few strategies discussed as to how to “get creative” in generating these funds and keep properties safe from those who would price residents out of their neighborhoods.

Jackson said his strategy at Operation Better Block was to buy the liens on homes so that developers had to deal with his organization upon trying to acquire the property.

Swartz of the Bloomfield-Garfield Corporation interjected during Jackson’s comments and said this was not going to solve the problem, to which Jackson countered that this was his organization’s way of dealing with the problem, and said that these small-scale solutions could later turn into larger scale solutions.

Swartz strongly disagreed, and said the longer a house was left sitting, the greater its risk in being swallowed up by outside developers. “We need a more active, aggressive, ambitious process,” he said.

He suggested an opt-in/opt-out policy that requires developers to either opt in to making a certain percentage of housing created affordable, or opting out and agreeing to pay a fee that would then cycle back toward subsidizing affordable housing.

He called the process a “delivery system” which needed public policy around it. He envisioned a mixed strategy of building brand new energy efficient housing as well as renovating older properties.

Fred Brown of the Kingsley Association added that he saw job creation possibilities in creating energy efficient and retrofitted homes, adding that the Kingsley Association already trains community members to become energy auditors.

Redwood said inclusionary zoning should absolutely be required of developers. “We’ve got to make [developers] do it. We have the hammer to make them do it…but we’re not using the leverage we have to make them do it.”

However each panelist envisioned it, they were all hovering around the same core belief: affordable housing should be backed by strong public policy that incentivizes or even mandates the creation and continued existence of affordable units.

Considering so much hinged on good public policy in all this talk of vacant, blighted property, I was shocked that it was already into the second hour of the conversation before Guggenheimer brought up the land bank bill, a bill that stirred up and polarized community members and CDC representatives, but which passed city council this April.

Councilwoman Deb Gross, who introduced the bill, stated in an earlier conversation on this blog that it took the Bloomfield-Garfield Corporation 15 years to get the titles to 50 homes for their affordable housing development in Garfield, much too long by her estimation. Conversely after a neighborhood is left blighted for years, redevelopment by big companies can hit seemingly overnight (see: East Liberty). Time is of the essence, which is why she felt land banking to be so crucial to Pittsburgh’s future.

When Guggenheimer asked, “Is land banking a possible solution?” discussion was brief. Redwood saw it as “just a tool,” in the larger scheme of the process. Matt Smuts, PCRG’s Hazelwood coordinator said one of the land banks’ more useful provisions is the fact that it requires properties held in the land bank to be maintained to code. That means that existing structures aren’t left to decay and then require teardown before the city can decide what to do with them. There is “suddenly a huge supply of housing” that could be made affordable, said Smuts.

Considering the demand, current supply is low, with long waiting lists for public housing assistance. “For every one affordable housing unit, there are six people looking to inhabit that property,” said George Moses during the question-answer period. Moses, a community activist, was the previous chair of the National Low Income Housing Coalition. He pressed that if there was to be a comprehensive discussion on affordable housing, the developers should be there too, he said, listing them off. One developer he listed was Walnut Capital, a real estate management company who owns 1,000 residential units throughout Oakland, Shadyside and now the newly developing East Liberty. They have a direct hand in much of the Bakery Square development, to which Moses commented, “How come when we talk about affordability and mixed income, we don’t talk about mixed income in Bakery Square?”

Redwood said what he would really like to see is an overall assessment of how many more affordable units are needed in Pittsburgh.

Swartz said foundations are always looking for the next critical project worth funding, and proposed that foundations could also make grants available to CDCs to subsidize a portion of affordable housing units in partnership with a larger development company.

Cummings said in his experience these types of public-private partnerships have produced the best results.

I thought to myself, perhaps prior to or in conjunction with foundation-funded housing units, could a foundation-funded study looking at average income levels in Pittsburgh produce the concrete numbers Redwood was looking for? Looking for reliable, accurate, up-to-date statistics on affordable housing in the City of Pittsburgh was difficult enough in writing this article—I’m not sure what kind of concrete data CDCs or individual citizens have to draw from in order to lobby for policy changes.

One of the final questions at the podium came from a member of the Housing Alliance of PA. She stated that inclusionary zoning was one of the items recommended in the transition team reports. She asked if anyone in the mayor’s office was working on this issue, and as it so happened, there was a woman in the audience from the mayor’s office who was able to field her question. The mayor’s representative said yes, inclusionary zoning was submitted as a recommendation as a part of the transition team reports, but that “there was no official stance on it as of yet.”

Calm and soft-spoken as can be, the woman replied, “Well don’t you think given what we’ve heard today, there should be?”

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3 thoughts on “Will We Be Priced Out? : Affordable Housing in Pittsburgh

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