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C. Briem

some missing math. For the renter that cost is inclusive of everything most likely. For condo owner you have condo fees and property taxes on top of the mortgage just to begin with. So you are comparing apples and oranges. So on that 450K condo you will have $1,000/month in property taxes alone and just lowballing a guess at condo fees on a conddo worth a half mil would be $1,000 a month, probably more. So if you get to 5-6K/month not $3K a month. That is pretty much the mayors take home pay I would guess. Once you take that into account the statements are not as incongruous as you imply. The interesting point is just that the mayor seemed to be honest about saying he could not afford to live downtown given the current market for these new units.

Sam M

I think the condo fees would be about half that, unless our man purchased one of the super-delux offerings: From the Post-Gazette in March:

"Take The Carlyle, for instance, an upscale condo development in the old Union National Bank building at the corner of Fourth Avenue and Wood Street. A two-bedroom, 1,170-square-foot unit starts at about $196,000, while the 6,000-square-foot penthouse on the 21st floor goes for a cool $1.2 million. And that doesn't take into account maintenance fees and parking. Residents must pay at least $147 per month for parking along with a monthly condo fee of 21 cents per square foot, or an additional $245 to $986 per month, depending on the size of the unit. Prices are even steeper at 151 First Side, a new luxury condo high-rise along Fort Pitt Boulevard near the Monongahela River. There, a one-bedroom, 1,000-square-foot cityside residence will set you back at least $290,000, along with a condo fee ranging from $278 to $986 a month. (Parking is included in the sales price.) ... Bargains can be found Downtown, if you don't mind buying something a little older or smaller. A three-bedroom, 3,650-square-foot condominium in Chatham Towers is being sold at auction Tuesday to the highest bidder over $350,000. And Coldwell Banker's Shadyside office recently listed a one-bedroom, one-bath unit on the 14th floor for $59,000. Just don't forget to add in the $321 monthly maintenance fee, plus $162 per month for parking."

http://www.post-gazette.com/pg/06084/676102-30.stm

I would assume that our mayor, mordern urban enthusiast that he is, might do without a vehicle. Saving him even more money.

But like I said in the original post, I am more than willing to assume that there are a lot of hidden costs here that would reduce the mayor's options. But given the Piatt's notion that $1,500 is an affordable nut for someone making $50,000 a year, the mayor's $100,000 a year income should be more than enough for a $200,000 condo. Maybe $350 is still too ambitios. But I would think $300,000 would be in range, given the definition of "affordability" being tossed around.

And if he wants to rent, the mayor could clearly get a very nice apartment for $3,000 a month. Including something close to a very posh two-bedroom. From the article linked here:

"Prices at the Encore on 7th, a new 151-unit apartment building on Seventh Street, start at just under $1,100 a month for an 883-square-foot, one-bedroom unit and run as high as $3,275 for a 1,389-square-foot two-bedroom place. Parking adds another $125 per month to the bill."

Thing is, I don't think he should pay that much. I wouldn't if I were making $100,000 a year. That is, I am with you. And the mayor. I do not think that someone making $100,000 can really afford $3,000 a month. And I don't think someone making $50,000 can afford $1,500. Despite claims that such apartments qualify as affordable housing.

But this goes back to our earlier conversation regarding how big the market is for the condos being built downtown. It seems that they are beyond the means of people making less than $100,000 a year. So says our mayor. So how many people in the city make more than $100,000 a year? How many in the metropolitan area?

Now we are getting closer to the numbers that matter.

I will get myself to the census bureau forthwith...

And from those numbers (the people who could afford to live downtown) we will have to guess at a subset of those who can not only afford to, but want to.

More soon...

Jonathan Potts

Obviously, this would be less worrisome if no public funds are involved, and if the developer weren't being given a sweetheart deal to buy the URA's properties.

The problem is that Downtown is not the only place where high-end housing has come on line or is set to be built in the city. We have new housing in Summerset at Frick. SouthSide Works. The North Shore. Washington's Landing. I refuse to believe there isn't some overlap, and perhaps significant overlap, in the markets for these various developments, just about all of which have received some kind of direct or indirect public assistance.

Sam M

I am going to go check out the Census 2000 Supplemental Survey. Here is an interesting bit of data from that survey, reported in the Trib:

"An estimated 8.4 percent of households in metropolitan Pittsburgh reported incomes of $100,000 or more in 2000, compared to a national average of 12.1 percent."

http://www.pittsburghlive.com/x/pittsburghtrib/s_4689.html

Not sure what the definition of "metropolitan Pittsburgh" is here. And this is a bit dated. But it seems to me that if you have to be making substantially more than $100,000 to be able to afford a $200,000 condo downtown, as our mayor suggests, there is an pretty limited market for them, at least locally. And as Mr. Falbo reported the other day, about 60% of the buyers have been coming from somewhere in or around town.

C. Briem

plenty of people earning 100K buying homes worth 200K these days? not sure why that seems out of kilter except in the Pittsburgh sense. I had a friend who was in grad school in Mountain View (home of google) who had to pay 560K for a measly 2 bedroom ranch home which he was easily able to do even on his measly pay well below 500K. That is how crazy mortgage markets were in 90's.. That was actually pre google IPO so I am sure he has made a mil in appreciation alone.

That may seem irrelvant but maybe not. Some of those people from out of the region who are reported to be buying may be these people who have bought (and are compensated) relative to these other markets. I really bet some of these are essentially 2nd homes for those who live elsewhere. Yes, the prices seem ridiculous to us normal Pittsburghers but the national real estate market has been pretty nuts in lots of places for a long time now.

but I pull 126,010 (or about 1/8th) of all households in the Pittsburgh region (2005) with incomes of $100K or more for what its worth.

C. Briem

sorry. meant to day his measly pay below $100K (not 500k).

Sam M

Chris,

I got similar numbers for the number of households making > $100,000. Although I admit mine were from 2003. Drat.

But the numbers are instructive. And so is your anecdote. When you say that your friend "had to pay 560K for a measly 2 bedroom ranch home," the crucial thing that I note is "had to." That is, I suppose he would not have done that if he had had access to a $300,000 Victorian in the Mountain View version of Regent Square. Or a $90,000 rancher in the Mountain View version of Blackridge. Or a $30,000 fixer-upper anywhere else. So maybe Pittsburgh people are bit more conservative in figuring out how much to spend on their living quarters. But that makes perfect sense. It's one of the good things about living here. And that is just something that developers have to deal with. Or should.

The fact of the matter is, Luke Ravenstahl is just about the most "creative class" fellow you are going to find. He is young. Married. Professional. Educated. No children. And his household income is something around $100,000 a year. Moreover, he really likes the idea of living downtown. But the price tag is too high.

Which brings me back to my point from the other day. The city and state are subsidizing the construction of something like 1,500 housing units downtown. That is not all that high a percentage of the 900,000 or so households in the MSA. But it is a much higher percentage of the 126,000 households that, on an income basis, could reasonably be considered the market for those units.

And this is assuming that all 126,000 of those households have even the slightest desire to live downtown. A lot of them do, I am sure. But a lot of them don't. A lot of people live in Mt. Lebanon because they like it. Some people live in Shadyside because they were born and raised there and would never consider something else. Some people living in Cranberry like their huge yard and the six bedrooms. Some of the people I know in Bloomfield like the church. Or the school. Or the bars. And remember, the MSA is pretty big. The Monroeville doctor who makes $100,000 a year might think twice about moving downtown. Because he would have to drive out to Monroeville to get to work. Etc.

So how many of those 126,000 households who can afford to live downtown would ever really even consider it? This is just my own opinion, but I would think way less than half. After all, a lot of the people who fit the financial profile have their 2.4 children, or whatever it is these days. And I don't care what anyone says. Very few people with kids are going to move downtown. So take them out. Take out the peope who live and work way out in the weeds. Etc. Etc.

So all of a sudden, those 1,500 new and highly subsidized households are beginning to look like a good chunk of people willing and able to live in the city.

Now, the mayor's new position is a really interesting one. If you go to the original article I link to, he seems to be going that extra mile and arguing that this new development is going to somehow halt or reverse the population slide.

Finally. An honest politician.

Seriously. I have been waiting for someone to say that. Because then it sort of makes sense in the way that John Morris keeps saying. That the landlords in Shadyside won't mind the upsclae housing glut because the redevelopment will draw more people into the MSA and/or the city to fill that housing.

Fine. Awesome. WONDEFRFUL.

But now that we have made that commitment...

Someone please, before we start, DEFINE SUCCESS.

Tell me. In 10, 20, or 30 years, how will we know whether or not the money we poured into this was well spent?

The mayor has gone ahead and told us what he is aiming for in general. But if I run a factory and I propose some capital investments, I am going to need to explain to shareholder what I want the new machines to do. "By the fourth quarter in fiscal year 2006, we will be saving XXX percent on input YYY, increasing the output of ZZZ by whatever percent..." Etc.

I know it's tough to predict the future. But if you are positing that your plan is going to increase the population, you need to support that in some way other than making vague references to "vitality" and "buzz."

What's the goal here? How will we know if the measures succeeded or failed?

Last, didn;t someone say that the city considers the new housing "replacement housing." maybe I don't understand the definition of that term. But it wounds like it means that planners are not expecting new residents to occupy the housing, at least in net terms.

If the mayor is actually arguiong that the Piatt/PNC strategy is going to increase the population, doesn't that mean that the new housing is not, in fact, replacement housing?

Sam M

Chris,

On the other hand, if you are correct and a lot of these people are going to be using these places as second homes, then this will do very little to add to the "vitality" of downtown living.

I always end up exactly where J. Potts does on these questions: I would have no problem whatsoever if the Piatts and/or PNC were gambling their own money on these ventures.

But the way things are--with everyone spending everyone else's money and refusing to define success--we are basically assured to get more of what we have gotten. Maybe one of these big planers will guess right one of these days. But even if they don't, they will say they did. And then all we will need is a Renaissance IV. Or V. Or VI.

Finally, note in the article that our good mayor recently visited Baltimore and came away speaking very highly of the Inner Harbor, the world's most successful redevelopment project. Which 30 years, two stadiums, a convention center, two concert pavillions and billions of dollars later still can't draw enough private investment for a hotel, or stamp out the strip clubs two blocks away.

With that kind of success in mind, who needs to worry about failure?

C. Briem

"had to" as in that was as cheap as it got in that area and not many better (i.e. cheaper) options as you moved farther away.

I suspect we are in agreement in being curious as to where the demand for these units will come from. I am just pointing out how to interpret some of the numbers, especially the comparison of rental fees vs. condo mortgages which makes a big difference.

but are 1,500 units a lot out of this notional demand pool of 125K households.. maybe, maybe not. It's not inconceivable there is some unmet demand affecting at least 1% of households out there, again assuming its all coming from within the region which I doubt. We can narrow that down some more if you want, unmarried households or DINK's or whatever. There is certainly this belief out there that a lot of new urban demand is coming from post-children households. Between the extra-regional demand, possible 2nd homes for the well to do exurban workers, niche demand from those who do indeed love living in the city and even pure speculative activity I am not so sure you can dismiss the demand as easily as you do. As an aside, here is a number for you.. about 1,500 elderly move back to Pittsburgh each year from Florida, a migration flow I hypothesize is mostly well off retirees who have moved out of Pittsburgh in the past. No I do not think all/most or even many of them could afford or want to move downtown but if 1 in 10 of them did, they would in and of themselves come close to filling the number of units we are talking about.

If the issue is displacement from other city neighborhoods, I just don't see any number to tell me that it really is the landlords or owners in Shadyside that have much to be concerned with. I am sure some upscale condo owners may have some concerns but that is the market for you (yes, I know.. what about the subsides, see next pare). I think there is a much bigger displacement issue in the low end market as more student housing comes online downtown displacing apartment rentals in a few concentrated city neighborhoods. but that is me just musing.

but on the market and what I think is your real point about opposition to public money involved in some of these projects. That is a legitimate debate but in many ways a seperate question from whether there is demand for this housing or not. I will point out that a lot of the public money is provided in the form of abatements or equivalent. Without working out the math which I ought to do.. I suspect that when you add up the total public money being used you still do not get enough recouped (NPV that is) to make current downtown real estate investment as competitive as it was when the city had a split tax. The elimination of the split tax made it far less profitable to build high density developments such as any project downtown. It is worth keeping in mind when studying urban land markets. It is also worth noting that your other examples of high end residential in the city (Wash Landing, Somerset and others) are pretty fully occupied to my knowledge, unlike large swaths of the city that house lower income households.

Sam M

"If the issue is displacement from other city neighborhoods, I just don't see any number to tell me that it really is the landlords or owners in Shadyside that have much to be concerned with."

I don't know the numbers either. But the city has tossed some around. Like projections indicating that the city's population will be just about the same ten years from now as it is today. Let's say 330,000.

The only difference being that the city will have an extra 1,500 high end units downtown.

So. The population stays the same. And enough people to fill 1,500 condos and apartments move downtown.

I feel like I am being completely insane here because no one seems to get my point... but here goes again: Where are those 1,500 people going to be moving FROM?

I know it is not going to be a simple process of Citizen X moves from Y apartment to Z apartment. Things are a lot more fluid than that. But again, unless I am completely insane, if the new downtown neighborhood sees a net gain of 2,000 people, the other 88 "old" neighborhoods are going to have to see a net decrease of 2,000 people.

And from what I can tell, I don't think that the 2,000 people, on net, are going to be coming from the hood. Or from some working class section of town. Because they can't afford to move downtown. We all now know that the mayor can't afford it, either.

I suppose the answer might be that 2,000 people who can afford to live downtown will move there. And that move will leave everyone below them the opportunity to trade up into better digs.

But if that's the case, why spend public money just to shift people around and, in the process, leave 1,500 housing units abandoned?

Or perhaps the idea is that there are not enough wealthy people to fill the new condos, but that such people will come when those units are built. Of course, if the planners are correct and the city population is not going to grow, that means that 2,000 other people, speaking in terms of net, are going to have to leave to make it a wash withregard to population. So, someone might explain which 2,000 people we think might leave. From which neighborhoods? What impact is that going to have?

Now, the new mayor has mixed things up a bit by proposing that the downtown people will be new people on a net basis. But that was not the working assumption in the past, when these schemes were being hatched. So... is that really the idea now? If so, what changed? Did someone do a study? Or did we just switch to that idea because it sounds better?

I think these are important questions.

I think there is a real problem here. Broadly speaking, Pittsburgh has a lot of available housing. We know that because housing is cheap. And not just decrepit old junkers in bad neighborhoods. My wife and I have a nice place that we could never afford in most other cities. That's one of the reasons we moved here.

So when a city or a state has a natural advantage in something like housing, what should that city or state do? In Pittsburgh, and in Pennsylvania more broadly, the answer seems to be... subsidize more of it. Seriously. Isn't that what is going on here?

Pittsburgh used to have 600,000 people. Half of those people left. Which leaves us with a glut of housing. Now, things are not perfect. That housing stock is not all in the right place. It's not all in great condition. Some of it is gone, or nearly so. But we know there is a lot of it. Because it is cheap.

Now, in a booming economy I think you might be able to argue that the thing to do is "massage" your advantages. Polish what's already good. But Pittsburgh is a financial shambles. An absolute disaster. Broke. The infrastructure is crumbling. The schools are in bad shape. And still we keep pumping millions and millions and millions of dollars into... housing?

How does that make sense?

Look, if there is this huge, latent demand for downtown housing, I am glad the Piatts are around. They''l know what to do. By all means, grease the regulatory skids. Accelerate building permits and rezoning. Send them encouraging letters in the mail. Invite them to the Allegheny Club. But for heaven's sake, why would a financially strapped city with a surplus of housing pay millions of dollars for someone to build more?

Jonathan Potts

I will say this--some people believe that one of the city's problems in luring residents is the dearth of new housing. We do have very old housing stock. This would be a more persuasive argument if the entire metro region were gaining population, and only the city was losing out. But unless I'm mistaken, with the exception of a few pockets of growth, as a region we have a stagnant population.

Certainly, people who are moving to Pittsburgh from Moutain View, Calif., might not only be able to afford a Downtown condo, but they also would not know enough to realize that they might be able to get more for less elsewhere in the city. (A Carnegie Mellon professor did research that found when people move from one housing market to another, they tend to judge prices based on the market from which they moved. So a New York transplant coming to Pittsburgh is likely to overpay for housing.)

I'm just not convinced that building new housing is going to be enough to lure these people, especially when some many other projects are going on at the same time.

Sam M

All of this puts me in mind of this incredible story. Stick with me. From the Guardian:

"Residents of Viganella, a small hamlet in the Italian Alps, have more reason than most to dread the imminent arrival of winter. From November to February, they lose the sun behind a mountain ridge that towers over the village and the 197 inhabitants live in permanent gloom. But now residents, led by their mayor Pierfranco Midali, may have solved the problem - they want to erect a giant mirror, powered by an electric motor, sited to the north of the village, 80 miles from Milan. The mirror would track the path of the sun and reflect rays into the village square. The result would be a small piazza bathed in sunlight and warmth where children could play and adults sit and sip coffee and grappa, just like the rest of Italy."
http://www.guardian.co.uk/italy/story/0,12576,1569442,00.html

Now, as a libertarian-minded fellow, I obviously would resist this sort of plan. I don't think that;s what government should be doing. At the same time, at least this makes some kind of sense. The town doesn't get much sun. This plan gets them some.

Now try to think how much more preposterous this plan would be if the city in question were Riyadh, Saudi Arabia. Obviously, that place gets plenty of sun. So what would be the purpose of adding more? But you know, in the end, at least Saudi Arabia could afford it. What else would they do with all those billions and billions of dollars?

No, the worst version of this would be for a place like Rio de Janeiro to implement this scheme. Rio is already famously sunny. So it would not make sense to add more sun artificially. Even worse, it would be a cataclysmic waste of money, because Rio is extremely poor. Or at least sections of it are. So why waste millions on a plan to get more of what you already have plenty of?

A highly subsidized $1.5 million condo in downtown Pittsburgh is our version of the Rio mirror. The only differnce is that Rio isn't building a mirror.

C. Briem

It's a fair question to debate subsidies but I think you misrepresent the few numbers we have completely. You dismiss Falbo's quote that 40% are essentially coming from outside the Pittsburgh region entirely. There is also no reason to presume as you do that the remaining 60% are all coming from within the city proper, which also would mean none are coming (or will come) from the remainder of the region. That would be unreasonable and counter to the few examples in the same story of people moving from Carnegie. So your premise is baseless. To imply otherwise is misrepreseting the few facts at hand. NOTHING in any of the recent news you have quoted is leading to the conclusion that there are 2,000 people moving from within the city to downtown. If the remaining 60% is coming from an area proportional to population then it's 13% (of the 60%) is coming from within the city. If it's proportional to that upper income population it's a far smaller number.

but even if it is true that these units are coming from elsewhere in the city.. Think about that for a minute. There are few half million dollar condo's in the city. If indeed there are any city resident buying one these units then it must mean there is latent demand for them. I am not sure I believe that, but given they say these units are pre-selling according to news accounts that demand is coming from somewhere. Outside sales or unmet sales from across the region I do not know.

Yes I know city population had been cut in half, yes I know the city budget is a shables but how these all fit together is nowhere near as simple as you make it seem.

on JP's last comments. lots to be said for perceptions. When I moved back to the city some years ago from NYC I was looking at apartments in not-inexpensive Shadyside.. I swear that when I was shown the first place and they told me the rent I seriously debated whether I would look foolish asking if they meant 'per room'.. it just didnt make sense to me.. and I was in NY before prices really went screwey.

I hope someone gets the Allegheny club joke.. if indeed it was meant as such.

Sam M

"You dismiss Falbo's quote that 40% are essentially coming from outside the Pittsburgh region entirely. There is also no reason to presume as you do that the remaining 60% are all coming from within the city proper."

I am not dismissing anything. What I am doing is using the figures that that the city has provided. Namely, the CITY is (or at least was) assuming that the population is not going to grow. And the city is supporting the construction of 1,500 residential units downtown. All I am asking is where those people are going to come from. More specifically, I am asking which neighborhoods in the city are going to lose those 2,000 (net) people taht the math requires.

Seriously. Maybe I am just asting like an enormous dunce. But if this city, or any other, builds a new neighborhood and does not add any people, some existing neighborhoods are going to necessarily lose people.

Or is that wrong? Is it possible for the new neighborhood to gain 2,000 people, for all the other neighborhoods to maintain their exact population, and for the city's overall population to remain the same?

I am not asking if the people moving into downtown are coming from Monroeville or Carnegie or Fort Worth, Texas. I am talking about the the city's headcount.

From what I understand, the city currently has 88 neighborhoods. If you add up the population of each one of those 88 neighborhoods, the number comes to something like 330,000.

From what I understand, in a few years, if all goes well, the "new neighborhood" downtown will house something like 2,000 people, lets say.

If the city's population is still 330,000, that means that the population of the rest of the 88 neighborhoods has to be 328,000. Right? Some of them wil be old residents. Some of them will be new residents. Some of them will be poor. Some of them will be rich. But if the population is still 330,000 and 2,000 more people live downtown, that means that the opulation of the rest of the city has to have fallen by 2,000.

And if that downtown neighborhood has 5,000 people and the city's population is exactly the same, that means the existing neighborhoods will have to have slipped to 325,000. Right?

And those 2,000 or 5,000 or however many thousand people are going to be many of the wealthier people in the city, right?

I don't know. Like I said. Maybe I am a complete dunderhead and that doesn't matter. Seems like everyone thinks that it doesn't. But for the life of me I can't figure out how the city's population is going to stay exactly the same, 2,000 really rich people are going to move in downtown, and 2,000 people, whoever they are, aren't going to have to move out of somewhere else.

Sure. Maybe 20,000 rich people from Manhattan and Houston and Toronto are going to see our new condos and move here. But if the population stays exactly the same, that means 20,000 people are going to have to move out.

And if 2,000 downtown residences that do not currently exist get filled, that means residences across the rest of the city are going to get 18,000 people to fill the 20,000 empty rooms. Meaning that there will be an additional 2,000 empty rooms. And if I owned one of them I might be pissed.

At least by my calculations.

OK. Look. Say I own a kennel that houses 100 dogs. The dogs I board shift around a lot. The Johnsons drop theirs off. The Smiths pick theirs up. Etc. But I have noticed a shift. Ten years ago I averaged 100 dogs. I was full. But now I average 50 dogs. It has gotten so bad that 25 of the kennels have fallen into disrepair. So I scrap them.

So now I have 75 kennels, fifty of which are full.

So I do a study. This study says that the number of dogs I board is going to stay steady no matter what I do. That is, I predict that I am going to stay at the 50 dog level.

So one day I decide to add 10 kennels. This does not change my analysis of how many dogs I will board. I still plan to house 50 at a time.

By definition, then, does that not mean that those 10 kennels I am building will remain empty? Or that if I fill them, 10 of my old ones currently in use are going to become empty?

Or is it somehow possible to keep all currently used kennels full, fill the new ones and still remain at 50 dogs? Obviously not.

You could argue that the new kennels will draw more customers and that my census will go up. And Mayor Ravenstahl appears to have made an anlagous argument in his recent interview. But as far as I can tell that is the first time a city official has made that argument. The position used to be that this was replacement housing, right? And I think that shift is interesting.

Perhaps not.

Sam M

Finally, if the current plan is to add population by "energizing" downtown, I would like some way to measure the success of this plan. What are we talking about here? I assume that Mayor Raenstahl isn't just making that up. How many people is he talking about? I know that is hard to predict. But a lot of things are, and people still try to predict them. Or they at least set goals. Minimum acceptable levels. High-end optimistic numbers.

So what are we talking about here? Are we predicting that these plans will add 20,000 people to the city? Five thousand? One thousand?

sean mcdaniel

hey, luke's a smart guy. he realizes he's not going to be mayor forever. one day, maybe in a year or so, he might be looking for a real job. and where the hell does the average 23-year-old make nearly $100,000 on the first try? it's got nothing to do with the rent. it's the future he's thinking of.

C. Briem

oh come on. Not to either pick on or praise the mayor but you can't be basing your thoughts on a few soundbites from a TV interview. If your comments were meant to take place at the 7th grade reading level most media is limited to then I will shut up and apologize for saying anything.

I wish I could say this more politely but I really can't make sense of almost any of what you are saying. The math does NOT in any way require that all the housing downtown results in a loss of population from other city neighborhoods. As best I can tell your whole argument presumes 2 things: that all downtown housing is an absolutely perfect substitute for housing in other city neighborhoods and that it must ONLY be a substitute for housing in other city neighborhoods, i.e it must not a substitute at all for housing anywhere else in the region. I guess if you believe that then yes you are correct. If you do not believe that then the answer is 'No' to each of your questions.

as for your dogs in your kennels. I suspect that if the kennels are equally warm and spacious they may indeed fit those criteria. Humans are not so indiscriminate.

It's a little fatalistic when you think about it all this way. No reason that logic would not apply to other projects you brought up such as Washington's Landing just to pick one. Is each and every unit there just a household that would have otherwise chosen to live in some other city neighborhood and not a suburb. Your logic requires the answer to be 100% yes. Not having done the survey I would only guess that the number is closer to 0 if anything.

if it makes you feel any better. There are no city projections I am aware of saying the city population is staying constant. In fact I have no evidence the city's population is doing anything other than continuing a fairly steady decline. I suspect you think that bolster's your argument.

I can't say for sure but I suspect you are overinterpreting the concept of replacement housing or how that plays into any of this. That may be a topic unto itself.

C. Briem

also a topic unto itself.. but as best I can tell: new downtown condos and apartments not withstanding construction in the city is far below even maintaining current housing stock. Building permits for new residential units in the city are at all time lows. So this concept of 'replacement' housing is a bigger issue than any of this.

Jonathan Potts

Do you have some thoughts on why that might be?

Sam M

"There are no city projections I am aware of saying the city population is staying constant. In fact I have no evidence the city's population is doing anything other than continuing a fairly steady decline. I suspect you think that bolster's your argument."

Yes, in fact. I do think that bolsters my argument. And I agree your version of the numbers. I was simply beiong cautious because it is fairly easy to go back and find someone making an optimistic projection off the cuff. Like this, from a Trib article in 2000:

"Wait until 2010. That seemed to be the cry of demographers, real estate professionals and government officials upon hearing news that Allegheny County's population had decreased by 54,783, or 4 percent, from 1990 to 2000. ... But local business and government leaders are encouraged by the region's job growth over the last few years and think that by the next census those downward trends could be reversed."
http://www.pittsburghlive.com:8000/x/pittsburghtrib/news/specialreports/2000census/censusrevealsdecline.html

But you are right. Most "studies" point to continued decline. Which makes me wonder why we would want to pay someone to build thousands of new housing units. And I am not the only one asking the question, for the record. From the Pittsburgh City Paper:

“My concern would be how much of a market it’s going to be,” says Ray Czachowski, executive vice president of NDC Real Estate Management, which manages the May Building and Midtown Towers. The region’s population, he says, is flat. “There is no growth to sustain this housing. We’re just shuffling people from one part of town to another.”
http://69.36.175.17/wiki/index.php/City_Paper_Cover_Story_on_Downtown_Housing

Shuffling people from one part of town to another. If thousands of people move downtown and the population of the city stays the same or falls, I can't see how you can dispute that notion.

But you say this:

"The math does NOT in any way require that all the housing downtown results in a loss of population from other city neighborhoods."

Well. I am just flabbergasted. So you are saying that the city is planning for the city population to fall. And that the number of people living in a selected area downtown is going to grow. But the math does not require the population of the rest of the city to shrink. Meaning that today, the population of this new neighborhood is zero. In ten years it will be, say, 2,000. The population of the rest of the city's neighborhoods will stay constant. Yet the city's total population will fall. Is that what you are saying? I don;t think it can be, But that's how it sounds.

"As best I can tell your whole argument presumes 2 things: that all downtown housing is an absolutely perfect substitute for housing in other city neighborhoods..."

No. I don;t care if you replace five $1,000 flophouses that house 10 people people with five $10 billion recreations of the Taj Mahal that house 10 people. Either way, you are moving, in net terms, 10 people from the flophouses to the Taj Mahal. These will not be the same people, obviously. But if you are assuming that the 10 people are moving into the Taj Mahals and that the city's population is going to stay the same, the people in those flophouses have to go somewhere. If those stay occupied, 10 people from SOMEWHERE ESLE have to leave. Otherwise the citys population will grow. So if you are assuming that the population will not grow, I think it is natural to ask, well, who's leaving? recreations of the Taj Mahal.

"...and that it must ONLY be a substitute for housing in other city neighborhoods, i.e it must not a substitute at all for housing anywhere else in the region."

No. No. No. No. I am not saying that. Someone is saying that, or something close to it, but it is not me. We know that because if the 2,000 or 10,000 or 20,000 or however many thousand people moving into Piatt Place were from Cranberry, in net terms, the city's population would GROW by that amount. But until the other day, city officials were not making that claim.

Look. I think it would be an incredibly ambition thing for the city to say, "Know what? Screw the county. We are going to compete with them for people. We are going to get people from Cranberry to move downtown. Some of them might choose Regent Square. Some of hem might choose the Golden Triangle. Some of them might choose SouthSide Works. But this plan will get them here. Same as people from Upper St. Clair. Monroeville. We are going to make the city compete with the suburbs. Hell, we are even going to get people from NYC and Chicago."

And if that happened, the plan would be a vision of GROWTH. Not for the region, necessarily. But certainly for the city.

But as you point out, all of the city's projections are calling for population decline.

So back to the quote from the City Paper: "“There is no growth to sustain this housing. We’re just shuffling people from one part of town to another.”

Maybe the mayor misspoke. Or maybe he is really ambitious. I look forward to finding out. BUt in the meantime, if you build new neighborhoods in a shrinking city, some older neighborhoods are going to have to shrink to account for the growth of the new neighborhgoods.

sean mcdaniel

i'll go with taxes, JP. every time I look at houses in the Mex War Streets or the Southside or even Bloomfield, i see my property taxes jumping by a couple thousand dollars and my local income tax more than doubling. as randy newman says, it's the money that matters.

then again, i guess i could move to fairywood.

Jonathan Potts

Actually, the combined school district/municipal property tax rate is lower in Pittsburgh than in Avalon, where I believe you live. According to the county's web site, the total millage (excluding county taxes, the same in both communities) in Avalon is 31.2, while in Pittsburgh it is 24.72. (Pittsburgh school property taxes are the lowest in the county, or used to be. Wage taxes are the highest.) I'm guessing, however, that you are correct in that your wage tax will double at best, and triple at worst.

But for much of the county, you no doubt are correct that taxes keep demand for city housing low. Older, inner-ring suburbs like Avalon, Bellevue, Wilkinsburg, are bad examples. I wonder, though, if there are other factors at work, not on the demand side, that drive down home starts. There's been a lot of talk about the liens. Are there regulatory issues? Do we have fewer home starts than comparable cities, facing the same population issues?

C. Briem

I give up... anything I say now will be repeating myself or worse yet come across as rude but fundamentally I think you confuse a lot of different issues that don't fit together the way you say they do.

This has given me a lot to think about how these issues are discussed in public or interpreted in the press. I teach uraban economics as a course from time to time and housing, in particular urban land markets, is obviously a big chuck of that course. To a degree the debate here may be a reflection of just bad explanations over the many years that downtown housing has been an issue in any real sense. People think this is something new yet for some the institutional memory downtown is fairly short. I remember in the mid 90's (long before current debates) the city would publicly say that 300 new residential units were then currently being added to downtown housing stock annually. It was a pseudo-fact that would be casually reported in the press and interpreted as fact. When you pointed out that was just not possible nobody really cared. Currently there are clearly new units going in so its not mythical any more. I have suggested in public and private that someone ought to camp out at these new units and see who it is that are moving into them. Who are buying these units and even if you net out all public subsidies there still is a fair bit of private capital being put at risk in this which begs the question of why.

Sam M

Chris.

Fair enough. I do appreciate your input, though. And I freely admit that I am probably confusing some of these things. They are, in fact, complex and confusing. And I defer to you judgement on most things. You are the expert.

I guess my final question, if it is one, is this. Well, I think it is probably the same one I have been asking. Although I do keep trying to simplify it. So don't feel compelled to answer it again. But say I have a city that consists of two neighborhoods. Neighborhood A and Neighborhood B. Each one has 500 people in it. So a total population of 1,000 people.

As mayor of that city, I propose building an additional neighborhood. We will call it Neighborhood C. I hope that someday 100 people will live in that neighborhood.

So my citizens say, "Well, great. Soon we will be a city of 1,100 instead of 1,000."

I reply, "No. Actually, I am predicting that the population of the city will stay something like 1,000. Maybe even a bit smaller."

I say, "If you add the populations of neighborhoods A, B and C ten years out, you will likely get a number close to 1,000."

So, if Neighborhood C has 100 people in it, like I hope, that means Neighborhood A and Neighborhood B will have a population of something like 900.

That is, the population of the old neighborhoods will have fallen by 100, speaking in net terms.

Note that this does not mean that no one moved in from outside the city. Maybe a whole boatload of people moved in from Exurb X, Y and Z. Maybe they moved in from other states. Even other countries. But if the population stays the same, that means that an equal number either died or moved out.

And that ten years out the 1,000 people, even if every single one of them is a new resident, will be distributed differently across the neighboirhoods.

Now, maybe you can say it doesn't matter that the population of Neighborhoods A and B fell by 100. Or perhaps you could say that it would have been even worse if we had not built Neighborhood C. Or perhaps you could argue that we are changing people, and that the 100 new people in neighborhood C are in some way better citizens than the 100 no longer living in Neighborhoods A and B. Or that minus Neighborhood C, the population of the city would have plummeted.

What I cannot figure out is how Neighborhood A will still have 500 people, Neighborhood B will still have 500 people, the New Neighborhood C will have 100 people, and the city's population will still add up to 1,000.

Seems to me that if the overall population is the same and Neighborhood C has added 100 people, the other neighborhoods MUST see a corresponding decline.

But like I said, we have been over this 20 times and I still don't get it.

The best news for the city, I think would be if Mayor Ravenstahl is right and that the new neighborhood equals new residents, reversing the population decline. We shall see.

JoeP

I don't understand the assumption that adding homes (and people) to downtown is at the expense of other city neighborhoods.

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