City denied millions in stimulus funds

Pittsburgh's long-term decline wasn't considered in HUD application

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Pittsburgh officials are reeling from the blow of being turned down for a second round of stimulus money for neighborhood stabilization.

The city applied for $29 million and believed itself in good stead for some funding. Congress stipulated that HUD disburse it to mitigate the effects of foreclosure.

"When I heard the news I was absolutely positive it was wrong," said Urban Redevelopment Authority Executive Director Rob Stephany. "We put together a great application."

The only feedback from the U.S. Department of Housing and Urban Development has been that the agency was deluged with applications, seven times what it anticipated, he said.

Andrea Mead, a HUD spokeswoman in Washington, D.C., said that under the American Recovery and Reinvestment Act, $2 billion was available in this round and applicants requested more than $15 billion. The applications were scored using six factors, the weightiest being need and demonstration of capacity to use the money effectively, she said.

The degree of decline over a long-term period was not considered; the areas of heaviest foreclosure during the recent economic downturn have been in the Sun Belt, California and Florida. Phoenix, for instance, received $60 million. In this state, Philadelphia applied for $58 million and got $43 million.

"We were pleasantly surprised," said Terry Gillen, executive director of the Redevelopment Authority of Philadelphia. She said Philadelphia and Pittsburgh are "comparable in foreclosures" based on decades of population decline, but did not see the dramatic surge in repossessions the nation has suffered recently.

"HUD is just implementing what Congress told them to," she said, "but we said in our application that these older cities like Philly, Cleveland and Pittsburgh are dealing with long-term decline," and have to get some help.

In the first round last year, Pittsburgh got $2 million in federal stimulus money for neighborhood revitalization based on its number of foreclosures. From the state's allocation of $60 million, Pittsburgh got another $4 million. By comparison, Philadelphia also got $4 million from the state after receiving $16 million in the first round.

Tom Cummings, the URA's director of housing, said money in the first round is being used for demolitions, housing development in the Hill District, home-ownership programs in Garfield, and purchase and rehabilitation of foreclosed properties in Beechview and Manchester, among other projects.

Second-round funding would have been used in the most distressed neighborhoods based on foreclosure data.

The most distressed neighborhoods have been that way for a lot longer than 18 months, which may be why Pittsburgh was overlooked in this round, said Mr. Stephany. "We are totally impacted, but it's not Pittsburgh's way to boom or bust."

Foreclosures are rising nationwide, but in the Pittsburgh metropolitan area they are declining. In 2009, the region saw 9,220 foreclosure filings, according to RealtyTrac, a national foreclosure data service. That was down 7.9 percent from 2008, when there were 10,013 filings. The Pittsburgh Metropolitan Statistical Area ranked 156th out of the 203 areas that RealtyTrac followed in 2009.

The irony is that Pittsburgh has struggled for decades against the effects of foreclosed properties and has long-term need compared to recently hit places, Mr. Stephany said.

"I've gotten past disbelief and am headed back toward being totally" peeved, he said. "Does HUD think we don't have needs? It's crazy to me that we are left out of the nation's stimulus package" for neighborhoods.

Mr. Stephany said the application called for "everything from demolition and greening dollars to implementing neighborhood plans, such as the Charles Street Valley [on the North Side] starting a strategy to get their arms around all the vacancy."

Habitat for Humanity was part of the city's application to provide "deep affordable for-sale housing."

"We have neighborhoods like Elliott and Sheraden that have seen more than their fair share of foreclosures and slum landlords and speculation," he said. The stimulus money would have helped residents acquire foreclosed properties so they could rent them.

"Longtime property owners feel like if they can just get a break-even situation, they would step forward and try to control their environment," said Mr. Stephany. "It was going to be a chance to make substantial impact on communities that have been having really healthy discussions that everyone was waiting 40 years to happen."

He said the strategic planning in neighborhoods that would have gotten stimulus money was not for nothing, though: "The ideas are out there; you can't stop ideas."


Diana Nelson Jones: djones@post-gazette.com or 412-263-1626. Read her City Walkabout blog at post-gazette.com/localnews.


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