City approves tax break for new housing in 29 areas

Wednesday, June 06, 2007
By Mark Belko,
Pittsburgh Post-Gazette

City Council approved tax breaks yesterday designed to spur new housing Downtown even as it expressed misgivings about excluding some neighborhoods from the program.

The measure, approved 8-0, will waive the first $2,700 in city property taxes for 10 years on new housing units built Downtown and in 28 other city neighborhoods.

“It’s symbolic of our effort to prioritize and give incentives for people to move back Downtown and to create incentives for people to move back into neighborhoods that haven’t seen investment for some time,” Mayor Luke Ravenstahl said.

Approval came even though several council members complained about neighborhoods being excluded from the program, which based eligibility in part on a “vitality index” that factored in population losses, education levels, single-parent families, poverty, low home ownership, high vacancy, tax delinquency, violent crime and other factors.

In fact, several Fairywood residents made a last-ditch appeal to council to be added among the eligible neighborhoods, but their pleas fell on deaf ears.

“We never get anything in our neighborhood. We’re always left out, except for things that don’t work,” Donna Washington, a member of the Fairywood Citizens Council, said afterwards.

Councilman William Peduto, who had proposed a competing tax break that would have applied to Downtown and adjacent neighborhoods, said the residents had a point.

“When you choose 29 neighborhoods to be the winner, you’re also choosing 60 neighborhoods to be the loser,” he said.

Several other council members, including Daniel Deasy, who represents Fairywood, also expressed disappointment about neighborhoods being left out but at the same time expressed hope that the program could be expanded in the future.

The Ravenstahl administration has said that going citywide would have cost the city $75 million over the life of the program. As structured, the abatement is designed to replace the new property tax revenue the city is giving up with gains in wage and other taxes.

Mr. Peduto said one possible avenue to explore in years ahead would be income-based property tax breaks as well as incentives built around green buildings, historic preservation and public art.

While the program isn’t perfect, it does lend assistance to efforts to bring more housing Downtown, he said.

Lucas Piatt, vice president of real estate for Millcraft Industries, the Washington County developer bringing condominiums to the former Lazarus-Macy’s building and apartments to the old G.C. Murphy’s store Downtown, described the abatements as a “good start.”

“I think it’s definitely going to help us,” he said.

He said he was also hoping that Allegheny County and the city school district would adopt similar measures. He said abatements in Philadelphia have helped to revitalize that city.

Allegheny County Chief Executive Dan Onorato expects to have an announcement soon relating to a possible county tax abatement program, spokesman Kevin Evanto said. For the initiative to be successful, Mr. Onorato believes the city, county and school district all must participate, he said.

While Fairywood residents complained about being left out, representatives from several other neighborhood groups spoke in favor of the program before the vote.

Cindy Cassell, who heads up economic development and project management for Neighbors in the Strip, said the program could help to stimulate the redevelopment of about 100 vacant properties in the Strip District.

“It makes urban living in Pittsburgh more affordable for more people,” she said.

The city is still writing regulations for the program, a process that could take at least a month. Abatement applications will be accepted for five years.

(Rich Lord contributed to this story. Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262. )