Capping months of public debate, Pittsburgh City Council voted 7-0 Tuesday to establish a dedicated trust fund for affordable housing.
Now council members have to decide how to pay for it. The legislation sets an annual funding goal of $10 million.
“It’s going to help individuals stay in their homes. It’s going to help individuals get very low-interest loans to begin fixing up their property,” said Councilman R. Daniel Lavelle, who introduced the measure in July. “It’ll help the local landlord who wants to keep rents affordable” but has trouble paying for fix-up projects.
The trust fund follows task-force findings that detailed an affordable housing shortage for low- to moderate-income city residents. More than 23,000 Pittsburgh households spend more than half their income on housing, making those families susceptible to foreclosure, eviction and other hardships, according to the legislation.
Advocates said the fund should stabilize and foster mixed-income neighborhoods, encouraging newcomers and helping longtimers stay put amid higher property values, taxes and market pressures. Aid offerings could include down-payment assistance, home rehabilitation and foreclosure prevention.
“It’s going to be a positive cycle. It’s going to increase values in places that haven’t seen increases in value in a long time,” said Eric Stoller, 47, of Friendship, one of several backers who spoke before council Tuesday.
Critics, however, cited worries over a funding mechanism. Councilwoman Darlene Harris, who abstained from the vote, said state and federal money should cover such efforts.
Councilwoman Theresa Kail-Smith, who was absent Tuesday, has said she wants to know how the city will fill the fund.
A controversial option would increase the city’s realty transfer tax by as much as 1 percent. Mayor Bill Peduto supports raising that tax as part of a funding arrangement but has to work with council on exact figures, said his spokesman, Timothy McNulty.
“We think the realty transfer tax is the fairest source because it impacts developers more than low- to moderate-income homeowners,” said Celeste Scott, an organizer with Pittsburgh United coalition. Other proponents called the transfer tax idea a progressive approach.
Mr. Stoller estimated his home has appreciated 40 percent over the last five years.
“I think there is a moral responsibility to give some of that back,” he said. “It’s hardly a burden.”
But at the Realtors Association of Metropolitan Pittsburgh, leaders have cautioned against a higher transfer tax. Pittsburgh residents already pay the highest transfer taxes in Allegheny County — 4 percent — with half the revenue going to the city.
“Unfortunately, it would hurt those of modest means the most,” said John Petrack, executive vice president at the Realtors Association.
He said a tax increase would raise the barrier to home ownership. And “when you have less buyers, you have more renters. Unfortunately, that increases rental rates,” Mr. Petrack said.
To foster affordable housing, the association has urged council to look at the real estate already on the city’s books. The association estimated city inventories at 20,000 to 23,000 properties, including unused, residential real estate. Selling some of that property for deed-restricted affordable housing could tackle the problem, Mr. Petrack has said.
For the trust fund, Mr. Lavelle said council still should consider a transfer tax increase among other potential revenue streams. The city will explore whether the state or banks can chip in, he said.
He has mentioned a city general fund as another possibility. He hopes to have formal financing options “to the table” by early February, Mr. Lavelle said.
Among other action Tuesday, council:
Voted 7-1 to pass 2017 budget plans that would not raise taxes. Mrs. Harris dissented, calling the plans, in part, top-heavy in city management. Mr. Peduto has 10 days to sign the documents.
Passed a proposal to extend parking-meter collections in the South Side Flats from 6 p.m. to midnight Fridays and Saturdays. Meter collection now ends at 6 p.m. Added collections may begin in February or March and should generate about $250,000 a year, according to the city. Much of the money will go toward an increased police presence in the neighborhood. Mrs. Harris dissented, citing opposition in the community.
Adam Smeltz: 412-263-2625, asmeltz@post-gazette.com, @asmeltz.
First Published: December 20, 2016, 7:25 p.m.
Updated: December 21, 2016, 4:54 a.m.
