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City Council approves tax abatements

Pittsburgh Tribune ReviewBy Jeremy Boren
Tuesday, June 5, 2007

Tax breaks designed to attract home builders to Downtown and 28 neighborhoods won City Council’s OK today but excluded some low-income neighborhoods, residents complained.

“It seems to me that the city is trying to upscale the city, and there’s no room for lower income people,” said Donna Washington, 51, a Fairywood resident who told council that her neighborhood should be eligible for the tax breaks.

“We are always left out,” said Washington, a member of the Fairywood Citizens Council. “There are a lot of people who would like to do work on their homes … and they can’t afford (the higher taxes).”

Beginning July 1, those who build new housing — or significantly improve existing residential property in the designated neighborhoods — would be exempt from the city’s 10.8-mill property tax for 10 years.

The tax break applies to the increase in value of new developments capped at $250,000. For example, the owner of a new apartment building worth $250,000 would not have to pay $2,700 a year in property taxes, creating $27,000 in savings over the decade.

The City Planning Department created a “vitality index” to determine which neighborhoods would be eligible for the program. The department assigned scores to neighborhoods based on data such as housing vacancy, violent crime, income, education levels and population decreases.

The bill, proposed by Mayor Luke Ravenstahl, passed 8-0 today. Councilman Len Bodack was absent.

Nancy Noszka, director of real estate with the Northside Leadership Conference, likes the tax break program and said if it entices home builders to come to the city “the program will help stabilize our communities.”

Cindy Cassell, project manager for the Neighbors in the Strip community group, said the tax breaks could persuade developers to improve some of the estimated 100 vacant properties in the Strip District.

“The 10-year tax abatement will make the cost of rehabbing these old buildings more affordable,” she said.

Councilman Bill Peduto said the mayor’s office should have focused the tax breaks on Downtown because it has the greatest potential for new development that would eventually feed the tax base after the 10-year abatement.

He said the bill has “flaws” because the Planning Department’s vitality index should have been based solely on income, akin to federal Community Development Block Grant programs.

“This is not perfect legislation; it definitely has its flaws. But we definitely have an opportunity to move forward and see some development Downtown,” said Peduto. He said he voted for the legislation because he believes Pittsburgh lags behind other major U.S. cities in offering such tax breaks.

In addition to Downtown, eligible neighborhoods for the tax break are: Allentown, Arlington, Beltzhoover, California-Kirkbride, East Allegheny, Elliott, Esplen, Fineview, Hays, Hazelwood, Homewood North, Homewood South, Homewood West, Knoxville, Larimer, Lincoln-Lemington/Belmar, Lower Lawrenceville, Manchester, Marshall-Shadeland, Mt. Oliver, Perry South/Perry Hilltop, Sheraden, Spring Garden, the Strip District, the Upper Hill District, Upper Lawrenceville, Uptown and the West End.

Jeremy Boren can be reached at or (412) 765-2312.

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