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Give them shelter: Middle incomes can find a home Downtown, too
Thursday, December 07, 2006

The rising Downtown residential market has been one of the most pleasant surprises in Pittsburgh development. But it should not come as a surprise when much-ballyhooed projects morph on their way to the market.

Last week Millcraft Industries announced that it plans to build rental apartments, rather than condominiums, in the old G.C. Murphy building. At first glance, it could seem like a retreat: Cost estimates for renovating the not-pristine building were coming in higher than expected and the developer was struggling to close the gap. So Millcraft turned to a federal program that gives the developer of a historic structure a 20 percent tax credit on future cash flow produced by the project -- hence the need to offer rental apartments, not condos.

But the result has been a happy coincidence. Even the most ardent booster of Downtown living admits the market needs units that middle-income earners can afford. Millcraft imagines rates at the Murphy building to suit folks in the $40,000 to $50,000 income range -- in other words, the elusive young professional. And while home ownership is a bedrock American aspiration, the condo-heavy Downtown scene can surely benefit from more rentals in the mix.

One Downtown developer, Ralph Falbo, happily reported yesterday that 47 of the condos he's building in an 18-story high-rise on Fort Pitt Boulevard have been sold. Even so, some people attracted to living in the central city -- newcomers, say, or short-term residents -- might be reluctant to make a real-estate investment, complete with closing costs and property taxes, for the privilege.

Millcraft, one of the key developers of the new Downtown, has adjusted tactics once already. Original plans for its Piatt Place included 25 condos and 22 two-story townhouses to be built atop the former Lazarus-Macy's building. In September, detecting that the market for townhouses in the $700,000 to $1.1 million range did not quite exist yet, it shifted the plan to 65 condos in various configurations but still erected around a central courtyard. Millcraft reports that 20 percent of the units have been sold already.

There are bound to be more twists and turns -- and maybe even flops -- on the road to giving Downtown Pittsburgh a critical mass of nighttime inhabitants. But with the sheer mass of projects under way -- almost 250 units under construction or in final stages, with another 1,300 planned -- the Downtown of the next decade is going to be an altogether different and, we would wager, better place.

First published on December 7, 2006 at 12:00 am