Christiane Leach has been trying to buy a house for three years. She wants to invest in any of several neighborhoods that public officials for years have said must be included in Pittsburgh's trajectory if the city is to be livable for all.
But too many homes in those areas appraise too low for buyers to get loans and too high for anyone but speculators and developers to pay cash for them. Many people who are left out are artists, said Ms. Leach, artist relations coordinator for the Greater Pittsburgh Arts Council.
Ms. Leach, an artist and musician, has looked at a dozen houses in the Upper Hill, Larimer and Homewood and tried to buy several with the same result -- obstacles keep her living with friends in Beltzhoover even though she has good credit and money to pay closing costs.
"If you want a house in a distressed area, you need renovations, but you can't get a loan" large enough to do them, she said. "I was told I needed cash. Not many people have that kind of money. Why is it easier for a developer to buy up five at once and I can't get one?"
She said hers is "one teeny part of a bigger story."
Tom Cummings, director of housing for the Urban Redevelopment Authority, agreed, saying, "This is definitely a problem."
The URA is working on a pilot program with the nonprofit Pittsburgh Community Reinvestment Group to begin to solve it. The Community Acquisition and Rehabilitation Loan program will begin this spring or summer.
The URA will commit $1 million toward guaranteeing 15 percent of renovation loans, leaving 5 percent for the buyer to cover. This will reduce a bank's risk and help low-income borrowers over the initial hurdle.
"The bank still makes the loan and buyers still have to meet all the standard underwriting criteria," Mr. Cummings said. "We think we have enough to do 40 to 50 loans off the bat, to test the kinks and look at appraisal issues."
CARL will get an infusion of $100,000 from city Councilman Corey O'Connor, who committed the money from a district fund that was allocated from a $60 million bond floated in the 1990s for large projects. That money will be used to help first-time homebuyers in a dozen neighborhoods that include the Upper Hill and North Homewood.
Mr. Cummings said the URA will "play a role in the construction process, making sure the contractors are addressing deficiencies in housing inspections and monitoring the stage payments the bank makes."
"Once the pilot gets going, we hope to open it to the whole city," Mr. O'Connor said.
The CARL program may not resolve the hitch of low appraisals, "but we have talked about closing-cost assistance, a deferred second mortgage," Mr. Cummings said, adding that those details will be worked out if the pilot takes off.
Ms. Leach wants to know what Pittsburgh is going to do differently than other cities, which have the same problem of affordability, for artists and otherwise.
"We have an abundance of old abandoned properties that need major renovations," Ms. Leach said, "and artists say to me, 'We need housing.' They are telling people to stay here but not giving them a way. They either assume people want to rent or they're setting up a class system with $200,000 lofts. A lot of us have been here for 20 years and helped make Pittsburgh popular, but how do you transform a neighborhood if you can't bring your own equity there?"
Diana Nelson Jones: firstname.lastname@example.org or 412-263-1626.