Pittsburgh Council members propose $60 million bond for affordable housing

Pittsburgh should borrow $60 million to help solve the city’s affordable housing problem, two city councilmen suggested Wednesday.

Councilmen R. Daniel Lavelle of the Hill District and Ricky Burgess of North Point Breeze said the $10 million Pittsburgh sets aside each year for an affordable housing fund could be used to pay debt service on bonds up to $60 million.

By having the cash up front, they said, the city would be able to fund a backlog of applications for affordable housing assistance and more quickly provide housing for low-income residents.

“We need to take out a bond of about $60 million (and put it) in a revolving loan fund and incentivize low-income spending in the city of Pittsburgh,” Burgess said. “We could do a variety of things to guarantee a steady pipeline of affordable housing over the next 15 years.”

Mayor Bill Peduto said he could support a bond, but he would first want to know how the money would be used.

“We have the ability to be able to create that bond, but before we do that, we should have a plan in place through our affordable housing task force, through our land bank and through the (Urban Redevelopment Authority) in order to be able to show the people of Pittsburgh exactly where that money would go to,” he said.

Peduto added that he would also oppose subsidies to private developers. The money, he said, should be available to any group or individual with a viable housing plan.

Burgess and Lavelle addressed the issue during a discussion of the URA’s proposal for distributing $10 million in 2020 from an existing Housing Opportunity Fund.

City Council in 2016 created the fund to address the city’s affordable housing problem and authorized the URA to administer it. A city task force previously estimated that Pittsburgh has a shortage of about 20,000 homes necessary for low-income residents.

The ordinance required the city to set aside $10 million each year for the fund, starting in 2018 and running through 2030.

Council in a preliminary vote unanimously approved the URA’s 2020 spending proposal. A final vote is expected Tuesday.

It would allocate about $4.5 million to build or repair affordable apartments, $1 million for rental subsidies, $2.5 million to help homeowners make critical repairs and $500,000 each for down payment and closing cost assistance and rehabilitating affordable houses for sale. An additional $1 million was set aside for administrative costs.

Jessica Smith Perry, the fund director, said about 75% of 2018 funding has been spent and most of the allocations for 2019 are committed to various projects. She said the fund so far has created or preserved about 1,000 units of affordable housing across the city.

That prompted Burgess to ask how long it would take to resolve the problem if the program continues at its current pace.

“I guess 20 years at 1,000 a year,” said Smith Perry, adding that it depended on need.

The URA plans to conduct another survey of the city’s affordable housing needs in the near future, said David Geiger, the URA’s government affairs officer. He said an updated assessment would provide a better idea of current housing conditions and gauge the Housing Opportunity Fund’s impact.

Lavelle, who serves on the URA board of directors, said he and Burgess had been discussing a potential bond issue for about two years. In order to cover debt service, he said, council would have to extend the housing fund requirement beyond 12 years.

He said an additional $6 million to $8 million is necessary, just to cover a backlog of applications for housing assistance piling up at the URA.

“We now have more projects upcoming with requests to the URA than we actually have dollars for,” he said. “I think we need to begin to honestly have a conversation about extending the Housing Opportunity Fund into the future in order to be able to do that bond. I do believe the time is now.”