Push for affordable housing targets trendy Pittsburgh neighborhoods
February 1, 2016 12:23 AM
In Lawrenceville community nonprofits are taking steps to secure a modicum of balance.
By Diana Nelson Jones / Pittsburgh Post-Gazette
Affordable housing is abundant citywide, but market forces in a handful of neighborhoods are creating shortages for low and middle incomes. Joining East Liberty in this quandary are Lawrenceville and Oakland, where community nonprofits are taking steps to secure a modicum of balance.
The Lawrenceville Corp. has just launched a land trust to buy properties to keep in the hands of moderate-income families with each resale. It is starting with seven targeted properties in Upper Lawrenceville, the last section to feel the market.
Though modest out of the gate, the land trust is a model that could be replicated in other neighborhoods where affordable housing may be threatened soon, said Matthew Galluzzo, executive director of the Lawrenceville Corp.
The nonprofit would own the land while selling the homes at affordable prices to people who earn 80 percent of the area’s median income. For a family of four, 80 percent is $55,000.
These homeowners would have the same rights and responsibilities as people with traditional mortgages; they just wouldn’t own the land. They would make a small lease payment per month for use of the land.
Lawrenceville Corp. would manage subsequent resales to ensure that the next buyer makes 80 percent of the area median income. The sellers would reap the principal they paid and their down payment. They also could keep whatever increase comes from the sale based on increases in the area median income.
Those combined amounts could be a sizable down payment on the next house, said Ed Nusser, land use coordinator for Lawrenceville Corp.
The incentive to buy what you can’t sell at market rate is the opportunity to live in Lawrenceville, he said.
“Right now, people at 80 percent area median income can’t get a move-in ready house in any part of Lawrenceville,” Mr. Nusser said.
Lawrenceville Corp. will seek funders to subsidize gaps between its costs and the home prices.
“This is an opportunity to give people a hold on the first rung of wealth building,” Mr. Galluzzo said. “It is also an opportunity to stabilize a family. We are seeing displacement here, with a 25 percent mobility rate from year to year at Arsenal Elementary. Anecdotally, we hear reports of families whose leases are not being renewed because the landlord wants to charge more.”
In Oakland, households that make $40,000 a year or less have been leaving for the past decade, said Elly Fisher, assistant director of the Oakland Planning and Development Corp.
That nonprofit owns and manages 80 low-income units and hopes to build 25 more that are accessible on land it bought on Wadsworth Street in West Oakland. Ms. Fisher said 90 percent of those would be affordable using a federal formula that amounts to $750 a month for a two-bedroom unit.
Nearby, the Oakland organization plans to renovate Allequippa Place and expand 12 of its 24 units. The plan depends on low-income tax credits from the state, an award OPDC failed to get in the last round. It is applying again in March.
The Pennsylvania Housing Finance Agency awards tax credits to about 40 from among 130 applicants each year. Corporations buy the credits and get a write-off over time.
“There is no other means to do affordable housing but the tax credits, and it’s highly competitive,” Ms. Fisher said.
East Liberty Development Inc. helped ignite that neighborhood’s retail engine in the early 2000s while addressing housing blight by using tax credits.
“We did almost nothing but affordable until 2008 because the housing market wasn’t there,” said Kendall Pelling, its director of land recycling.
When East Liberty Development arrived, he said, its investments in market-rate redevelopments helped subsidize low-income units.
Today, East Liberty Development rents 32 scattered units to Section 8 voucher holders, owns an 83-unit building it wants to renovate and enlarge to about 200 units, 20 percent for low-income people, and runs a 41-unit building for low-income residents. It also offers housing for 26 disabled and otherwise homeless people.
East Liberty’s market forces are so dominant that none of these efforts comes close to the demand. Mr. Pelling said political support is critical. A larger-scale solution would be to save housing stock now deteriorating all over the city and ensure public safety to make those neighborhoods desirable, he said.
“If we don’t,” he said, “we will continue to lose building stock we already have faster than it could ever be” replaced. “We’re never going to build our way out of this crisis because the need is so much greater than our ability to build.”
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