Looks like the plan for residential tax abatements is making some headway in city council. Which could be a good thing. Or a bad thing. Check out the article. Seems like the main concern is which neighborhoods get the abatement. Here's how they picked the winners:
Administration representatives said that neighborhood eligibility is based on two factors. One is the neighborhood's score on a "vitality index" that factors in population losses, education levels, single-parent families, poverty, low home ownership, high vacancy, tax delinquency, violent crime and other factors. Another is a low level of new private building permits in 2005 and 2006.
But just hold on a second. Here's the list of neighborhoods that qualified:
Allentown, Arlington, Beltzhoover, Bluff/Uptown, California-Kirkbride, Downtown, East Allegheny, Elliott, Esplen, Fineview, Hays, Hazelwood, Homewood North, Homewood South, Homewood West, Knoxville, Larimer, Lincoln-Lemington-Belmar, Lower Lawrenceville, Manchester, Marshall-Shadeland, Perry South/Perry Hilltop, Sheraden, Spring Garden, the Strip District, the Upper Hill District, Upper Lawrenceville, the West End, and the Mount Oliver neighborhood, which is next to the separate municipality of Mount Oliver.
Note that it includes Downtown. Huh? Downtown is BOOMING as a residential destination. Maybe that's just an illusion, you say? Well, no it's not. How do I know? Try this article. The Post-Gazette published it last September 24. It's headlined: "Downtown housing boom no illusion." Here's how it begins (I'll emphasize a few parts):
Downtown's residential renaissance is producing its first fruits.
Developers say they are having little trouble finding people willing to spend $250,000 or more to buy a Downtown condo or as much as $3,275 a month to rent an apartment.
Since opening at the end of April, the new Encore on 7th has leased 73 percent of its 151 units, with most rents ranging from $1,400 to $3,275 a month.
The Golden Triangle's newest condominium building, 151 First Side, has commitments on 43 of 80 units, with prices ranging from $250,000 to $500,000. Piatt Place at the former Lazarus-Macy's building has lined up buyers on 10 of 65 condos, with prices running from $335,400 to $634,500, in the four months the sales office has been open.
"It exceeds our expectations. We're excited about it," said Jack Piatt, chairman of Millcraft Industries Inc., the developer.
I haven't seen the bill. But I wonder. Does it automatically include Downtown, then apply the two factors to everywhere else? Or does Downtown qualify anyway?
Who developed these factors? When? How? Any chance they were reverse engineered to make sure certain places got included? I honestly have no idea. But this seems strange. We have very recently heard that Downtown in undergoing yet another Renaissance. That projects like Piatt Place and the PNC skyscraper deserved public support because they were going to revitalize the moribund Forbes-Fifth Corridor and give us a 24-hour downtown. Come on. You remember. It was only a few months ago. Then, after that, we got lots of promises about a new hockey arena and how it would help, er, revitalize downtown. Etc. Etc. Etc. Etc.
So which is it? If all those projects are going to work, why do we need to include Downtown in the abatement plan? If they aren't going to work, and Downtown still needs the abatements to thrive, why is the public pitching in to pay for those projects?
Is there a single other neighborhood in Pittsburgh that has received more in terms of attention and public investment than Downtown? As such, shouldn't it be dead last to receive these abatements, if we insist on picking some neighborhoods to receive them while leaving others out? Maybe we ought to just apply them across the board? Back to that original article about the abatements:
Going to a citywide tax break would mean giving up tax revenue in areas "where market-driven development activities are occurring," said city Finance Director Scott Kunka. "When you go citywide, we expect the program will cost the city $75 million over the life of the program." The abatement is, instead, designed so that new property revenue the city gives up is offset by gains in wage and other taxes.
But wait. Is he saying that "market driven development activities" are not going on Downtown? Where the housing market is just kicking the bejeezus out of the Piatt's expectations? And what about "gains in wages and other taxes"? Interesting. That means someone has a formula for how many of the residents drawn in by such development would come from outside the city. Which is what I have been looking for forever.
Anyone help me out on that? A while back I contacted Peduto's office about that question. I got some interesting results, which I never posted. Maybe I will. (Nothing scandalous. Like I said... just interesting.) I wonder if this plan, which seems to be the mayor's, uses a similar "formula."
UPDATE: I went back to the "No Illusions" story in the Post-Gazette to see if there was any mention of the "market" for development downtown. There was a lot of mention. Here are some snippets:
... It's a whole lot of housing to add to the 1,290 rental and condo units available in the Golden Triangle. But several studies over the past five years have indicated the demand is there to match it. They suggest the Downtown market can absorb 100 to 250 units a year...
... And a recent Carnegie Mellon University study found that demand for Downtown housing among young professionals far exceeds the supply. ...
... "We're very confident that the marketplace can hold and support this amount of residential Downtown [development] that's going to roll out over the next five years," said Greg Hammill, regional vice president of Howard Hanna Real Estate Services. ...
... Mr. Hammill said Howard Hanna's own marketing studies have suggested that demand exists. He said the Encore, with nearly three-quarters of its units rented, is a "great indication" of demand for Downtown living. "We're very optimistic about that market," he said. ...
Now, this is obviously pretty obtuse. What does "market" mean? Depends. But clearly, people have been telling us for well over a year that there is a huge demand for downtown housing, that certain public investments would help developers meet that demand, and that they were doing so quite nicely. Presto! Renaissance IV.
So, again, if we are trying to avoid using the abatements in areas that are already getting attention from "the market," uh...
Come on, guys. Spread it to the whole darn city.