Living on the streets is extremely difficult. I know because I’ve been there. I’ve been homeless twice in my life, and I’ve lived in homeless shelters. Housing is a very personal issue as well as a basic human need, and emotions run deep on the issue of affordable housing because of those facts.
So it makes sense that Pittsburgh and its surrounding areas are focused on maintaining housing affordability. Our NAIOP chapter is playing a key role in working with local leaders to deliver quality housing at prices people can afford. But that doesn’t mean that our leaders can put the full burden of providing affordable housing on private developers. In fact, doing so could actually lead to less affordable housing, because it is commercial real estate providers that will be needed to maintain ample supply.
In the past few years, Pittsburgh has convened a task force and developed policy options to preserve affordability. These actions have been important ones, and should provide a template that other top-tier cities preparing for growth should consider using themselves. We don’t think that the proposed funding mechanism for the housing trust fund, the realty transfer tax, is the best option. However, the fact that there is such a fund is a positive factor for our city’s strategy.
In order to maintain affordability, the city (and surrounding areas) must increase supply. In Pittsburgh and other cities, though, a NIMBY (not in my backyard) approach to development is gaining momentum. The goal that’s driving the NIMBYs is to keep existing residents from being displaced by new development. However, basic economics tells us that you can’t lower or maintain low prices with supply restrictions that impede response to market demand.
The Pittsburgh City Council should incorporate this knowledge into its proposed inclusionary zoning pilot policy in Lawrenceville.
The city’s current plan calls for restricting development for residential and mixed-use developers unless those developers set aside a percentage of their projects as affordable units. With that restriction in place, some developers will move forward in Lawrenceville. However, others will build elsewhere, or get out of the housing business and focus on other types of projects. This means supply will not keep pace with demand, and we can expect to see higher rents. That’s the exact opposite outcome of what the people designing the policy are aiming to achieve.
Pittsburgh has lessons to learn from other cities across the country. Cities that have proceeded with inclusionary zoning have seen little growth in affordable units. Think of the rent control laws in San Francisco or Manhattan, and see what they’ve done to housing costs in those areas.
Instead, cities that have allowed the market to increase the supply of housing have seen affordability maintained. Look at Houston or Atlanta, where the housing stock just keeps growing. Right now, the City of Pittsburgh has more than 10,000 properties that could be utilized to increase land for development. It would be unfortunate if we, as a city and region, were not able to bring some of those properties back on the tax rolls.
As a top-tier city, Pittsburgh needs to evaluate our strategies to ensure the intended outcomes are likely. Ultimately, any policy should be judged on how effective it is at producing affordable units. If the inclusionary zoning legislation passes, I hope our city’s leaders will implement a thorough evaluation program and be willing to change course if the program isn’t working.
Meanwhile, NAIOP Pittsburgh is working to engage the city council and Lawrenceville community leaders to help them understand how to get the highest number of affordable units. That’s the best way to advance a shared approach to meeting this problem head-on.
Brandon Mendoza is the executive director of NAIOP Pittsburgh.