Affordable housing advocates and city residents, including Just Harvest, marched through downtown Pittsburgh on Sep. 20, 2016, as part of a National Renters Day of Action. (Photo courtesy of KeepPittsburghDope)
Our city now faces an affordable housing crisis: more than 23,000 Pittsburgh households are paying at least half of their income on housing. That’s 1 in 4 of the city’s renters.
Why? Pittsburgh lost more than 3/5 of its low-cost rental housing since 2000. Meanwhile, there’s been a 6-fold increase in high-cost rents. The city is now short nearly 20,000 units of affordable housing.
This lack of safe, affordable, quality housing stock means that when someone is forced to move because the landlord jacked up the rent to make more money, or because another piece of the Pittsburgh’s dwindling public housing is demolished to make way for high-end development, life becomes much harder. Hard to find a home in or even near your neighborhood, your job, or your children’s school. Hard to find any affordable place that has public transit, good schools, fresh food, a strong community, and other necessary supports for low-income households.
Hard to not feel entirely depressed and undone by the downward spiral that losing your home plunges you into — into the kind of poverty that’s impossible to escape.
Affordable housing crisis: The cause
This isn’t just a Pittsburgh problem; the crisis is nationwide (and perhaps a permanent part of capitalism itself). To truly solve the shortage Congress must increase funding for affordable housing programs like Section 8 vouchers, rental assistance, and public housing.
Instead, Congress has kept funding for these programs flat, and has similarly failed to increase the minimum wage. So millions of households are struggling (and often failing) to keep up with the triple whammy of rising costs of living and rents, low wages, and little to no government help. Congress’s largest housing subsidy, the mortgage interest tax deduction, primarily goes to families making $100,000 or more, while half of homeowners with mortgages — most of them middle- and lower-income families — receive nothing.
By several measures the affordable housing crisis is worse in Pennsylvania. Here, homelessness is rising despite decreasing nationwide. Our state is the 20th most expensive in terms of the hourly wage a worker would need to earn to afford rent on a 2-bedroom apartment: $18.27. The average Pennsylvania renter only earns $13.27/hour; they’d need to work 52 hours/week on average to get by.
So state government has a role to play in addressing housing—and wages!—as well.
And so do officials of the City of Pittsburgh, where we’ve been rapidly losing affordable housing and population along with it. But administration after administration hasn’t tried to stop the bleeding. In fact, they’ve been digging their fingers in the wound.
Witness the rapid gentrification and displacement of residents in East Liberty, Lawrenceville, the lower Northside, Downtown, Garfield, the Strip District, and the Southside, and the deplorable housing conditions in too many other neighborhoods.
The city (and county) should stop giving public money (in the form of tax breaks) to developers who fail to include truly affordable housing as a significant part of their housing developments. But we can’t build our way to the 17,000 quality affordable housing units that Pittsburgh needs.
A solution?
The room was entirely packed, including all overflow seating, at the Pittsburgh City Council public hearing on the Housing Opportunity Fund, Sep. 21, 2016. Three or four times as many people spoke in favor of using the RTT as a funding source than spoke against it.
(Photo via Pittsburgh United)
A comprehensive plan to address the entire scope of Pittsburgh’s affordable housing problem—the lack of quantity and quality—is long overdue.
Recognizing this, in early 2015, City Councilman Dan Lavelle drafted a bill to get the housing needs of low-income communities on the city’s agenda. The new legislation created an Affordable Housing Task Force of 26 housing and city planning experts and community advocates.
Their recommendations led to another bill that Lavelle introduced in July to create a dedicated fund for creating, rehabilitating, and preserving affordable housing in Pittsburgh. This is a proven model used by 73 cities in 27 states.
That said, the Housing Opportunity Fund falls short of a complete remedy:
- The $10 million in resources it would provide is not enough; in 10 years it would only address 1/3 of the current shortage.
- It should include income targets to ensure that funding goes to help the residents who are most in need.
- Community control must ensure that the funding is responsive to the needs of the community, distributed equitably, and prioritizes helping long-time residents.
In addition, Pittsburgh still needs to implement other housing-related measures to protect renters’ rights against abusive landlords, to mandate the inclusion of affordable units in new housing construction (rather than using incentives to encourage it), and to require accessibility to those with physical disabilities, who make up a significant portion of our low-income and senior populations.
But the Opportunity Fund would indeed support a variety of proven methods of boosting affordable housing in community-centered ways. It’s a solid start.
Where the funding will come from
After evaluating a large number of possible funding sources for the Opportunity Fund’s required $10 million per year, the Task Force determined that a small increase in the Realty Transfer Tax (RTT)—from 4% to 5%—was clearly the best option. The only other tax that City of Pittsburgh can legally collect, a property tax millage, would affect all homeowners and landlords.
The RTT only applies to new home purchases and would be split by the home buyer and the real estate agent. This is why real estate firms and people who “flip” houses—constantly buying and selling houses for profit—oppose increasing the RTT: they are the ones it hits hardest. So when real estate firms falsely claim that this tax increase will only make homes more unaffordable, don’t believe them: the Fund can be used to assist eligible homebuyers with closing costs, which would actually increase home sales.
In addition, the RTT is assessed at a time when those paying the tax have the financial resources to pay it. It’s also possible to include the cost of the tax in the mortgage financing.
So what will that 1% increase in the RTT cost you?
Nothing, if you’re not buying a home. For the average home sale price – $113,000 – a 1% RTT would be $1,130. Half of that (the buyer’s share) is $565. $565 amortized over the life of a 30 year mortgage comes to $2.70 per month.
So if you buy a house, that’s what you’d be contributing to help stabilize and improve Pittsburgh’s neighborhoods. Your new home will help fundamentally and permanently improve the homes of thousands of others in our city.
A few bucks a month is the small price you’d pay to help make sure Pittsburgh’s seniors, working class people and families, people with disabilities, and veterans can stay in the neighborhoods they’ve always called home.
Now that’s affordable.
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