Haislip says a RETT increase isn’t necessary and wants Pittsburgh to modernize its real-estate department and make it easier to sell the 20,000 units of city-owned property. She says the current process to purchase city-owned land is complicated, especially for first-time homebuyers. By applying the same techniques and resources real-estate agents use to sell private property, the city can sell its units quickly and inexpensively to low-income homebuyers, she says. To maintain affordability on those city-sold properties, Haislip says Pittsburgh can attach deed restrictions, requiring owners to maintain affordable rents and avoid flipping the property for profit for a 15-year time period.
The public-policy experts at Pittsburgh Community Reinvestment Group are also concerned that a RETT increase will negatively affect buyers looking for affordable homes.
“There is a risk of burdening homeowners,” says PCRG Director Ernie Hogan. “We don’t want to put this on the backs of people buying and selling homes.”
For example, statistics compiled by PCRG show the average home loan in Manchester, a North Side neighborhood in need of increased investment, is $128,000. With the proposed RETT increase, a homebuyer there would pay an extra $1,280 in upfront costs.
But Councilor Lavelle says low-income residents buying a $50,000 home in Perry North can benefit from the Housing Opportunity Fund. Lavelle says most homes in affordable neighborhoods like Perry North are that way because they often need to be rehabbed, and he says the fund can help cover those costs for homebuyers.
Hogan says one revenue stream is not enough to fix Pittsburgh’s affordable-housing problems. PCRG is suggesting a suite of solutions: a small increase to the city’s property-tax rate, a small RETT increase, a contribution from the city’s general fund, and contributions from Pittsburgh’s foundation community.
Lavelle acknowledges the city could draw on its $37 million surplus, which would encourage nonprofits to contribute. But he worries the surplus could be a “one-time” gain, and he says it is better used to tackle pressing infrastructure problems.
Additionally, Hogan says the city can alter its zoning and tax-abatement laws and attach affordable-housing requirements when allowing new development.
“How do we come collectively together, to have an affordable-housing plan that doesn’t hurt thereal-estate market? We want that,” says Hogan.
But Hogan also recognizes that policy experts, who already suggested many of these fixes last year, might have underestimated the urgency felt by residents, advocates and city officials.
“We had a lot of smart people come up with solutions, but then we went back to our sandboxes,” says Hogan. “Maybe we should have said, ‘Let’s get back together and talk about this.’”
Celeste Scott, of housing advocacy group Pittsburgh United, knows about this situation all too well. Scott says the group gathered 14,000 signatures in support of placing a RETT increase on the November 2016 ballot, but the effort was dropped in support of city council’s RETT efforts.
“It was significant; it was people from every district,” says Scott, of the public RETT support.
Scott believes the RETT increase would mostly affect developers and homebuyers who can afford the extra costs.
But Pittsburgh City Paper looked at 30 property transfers occurring the last week in April 2017, and an easy answer as to who would be most affected didn’t emerge. Sixteen properties were purchased by individuals with a history of buying, selling and rehabbing homes, and five of those were sold for more than $320,000.
However, a handful of homes were purchased by buyers that a RETT increase might have an outsized effect on. Eight first-time buyers bought non-rehabbed homes near the edge of the city, and the purchase price for each was less than $150,000.
A public hearing for the proposed RETT increase is forthcoming, although no date has been set. Scott emphasizes there’s little time for council to deliberate. “It’s a crisis for so many people,” says Scott. “There is an urgency to get it done.”