Pittsburgh considers bigger incentives for building cut-rate housing

Pittsburgh is considering offering bigger tax breaks for developers building affordable housing or creating businesses in depressed neighborhoods, but critics say the revamped abatement programs won't do enough to address a low-income housing shortage.

City Council on Tuesday introduced legislation amending Local Economic Revitalization Tax Assistance programs, which give developers tax relief on the increased value of a property after it is improved.

About a dozen people attending a council meeting panned the proposed programs. Carrying signs critical of rising city housing costs, they called on council to rework the legislation.

"We're sick and tired of these developers getting these tax breaks and building these apartments that we can't afford," said Carmen Brown, 54, of East Liberty, where real estate values have skyrocketed in recent years.

Councilman Ricky Burgess of North Point Breeze, an outspoken advocate of affordable housing, said the protestors were ill-informed.

"They just don't understand," he said. "Right now (developers) can get this without any restrictions. This actually encourages them to build more affordable units."

Under the legislation existing LERTA programs would remain as they are until year's end.

In 2018, companies that improve existing houses or build new in depressed neighborhoods would be eligible for a maximum tax abatement of $175,000 per year for three years.

Developers would be eligible for an enhanced abatement of $250,000 per year over a decade by building owner-occupied houses in neighborhoods that qualify for Community Development Block Grant funding, or for making 15 percent of the units affordable to people earning 80 percent or less of area mean income. That's $56,950 for a family of four.

Developers of apartment buildings or businesses in depressed neighborhoods would be eligible for up to $125,000 per year for 10 years. The abatement decreases by 10 percent for each two-year period after the first two years.

Under an enhanced abatement, the same developers would be eligible for up to $250,000 per year for 10 years with no reduction over time.

To qualify, residential developers would have to make 15 percent of their units affordable to people earning 60 percent or less of area mean income — $42,720 for a family of four — or build in CDBG eligible neighborhoods.

Developers of commercial or industrial properties would have to add at least 50 new full-time employees or create energy efficiencies that qualify for certification as Net Zero , Passive House or LEED Silver or greater.

Molly Nichols, director of the activist group Pittsburghers for Public Transit, said the city should ban tax breaks for developers of market rate housing. Instead, she said, it should supply an affordable housing trust fund with increased tax revenues generated by new development.

"They are bringing in new restrictions that weren't there before, but it isn't enough," she said.

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