Hard to locate middle of new housing market
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Why does no one build for the middle class anymore?
That's what an emailer from Morningside wondered after she read a column last month on the spike in home values in East Liberty. Homes on North Euclid Street have sold for $240,000 to $332,000 recently. Meantime, other buildings have been gutted and used for subsidized rentals that are made to look and feel like market-rate.
"I want to know what has happened to the housing that is priced between the subsidized and the mid $200,000?" my correspondent asked.
She didn't want her name in the paper. She's 61, a working nurse, and her husband is 76 and ailing. To help with their son's college tuition they refinanced the house they've lived in for 27 years, which she guesses is worth around $125,000. At some point they'd like to sell it and rent or buy a smaller place that's easier to keep up, but these climbing prices in East Liberty have her worried.
"I keep wondering what we have done wrong in our lives that we are not able to afford those prices, or are unwilling to make ourselves house poor ... So, yes, let's rah-rah all of this development in Downtown and East Liberty, but don't kid yourself that these houses/units/apartments are for the average everyday working (or retired) person.''
She's right. Developers rarely build for the true middle class. That's not where the money is.
That doesn't mean there aren't good housing options out there, particularly in a metro area with a plethora of old housing stock like ours. But those days when developers filled hillsides with new homes for folks of truly middling income? A person wanting to spend up to $1,000 a month isn't likely to find anyone building housing for that market. Construction costs are too high.
"It's a lot more expensive to buy a 2-by-4 today than it was 50 years ago,'' says Mark Masterson, executive director of the Northside Community Development Fund.
Lobbies, elevators, sprinkler systems -- they all run into money, too. There are also impact fees that past developers didn't face. Gone are the days when a developer could throw up some housing and expect taxpayers to cover the roads and traffic lights they'd require.
My emailer has a good job in Pittsburgh's new eds-and-meds economy. She's also a Pittsburgher, so she has certain expectations. She lives and works between the Allegheny and the Monongahela and has no interest in dealing with tunnels. She's hardly the first local with an aversion to crossing rivers, but in narrowing her search from Downtown east to Oakmont, she has targeted an area of sometimes shocking price upswings.
It could be that we've been spoiled, in a sense, by the bad times this region endured when steel collapsed 30 years ago.
"Pittsburgh got very used to the idea that a house should cost next to nothing, and that's just not true anymore,'' said Eric Jester, who grew up in the Mon Valley and is now project director of East Liberty Development Inc. "I suppose if UPMC moved to Cleveland the value housing would fall back to meet certain people's expectations."
Instead, the move of Children's Hospital to Lawrenceville has goosed real estate values there, and Mr. Jester puts the vacancy rate in the East End at less than 5 percent -- one of the strongest apartment markets in country.
"Housing's expensive. That's just a fact, and Pittsburgh's just starting to catch up with the national market. That's what's going on.''
Prices aren't jumping region-wide or even city-wide, but when a two-bedroom condo in East Liberty can list at $200,000, there's a new reality confronting us.
I punched the Pittsburgh median household income of $45,000 to $50,000 into the Zillow mortgage calculator online. It said that family could afford a $200,000 home, but I'm not sure most Pittsburghers would sleep well under roofs that take that much of their take-home pay.
The median value of a owner-occupied home in Allegheny County is still less than $120,000. In the city, it's less than $100,000. I expect my Morningside correspondent will find a match once her search begins in earnest. Somebody built it with her in mind a few generations ago.
First Published November 18, 2012 12:00 am