Wednesday, April 26, 2006

Downtown housing in need of boost, but how?

City Councilmembers say, "Pick our cherries."

It is bad economic policy, and bad progressive policy, to discount to our most valued assets so the rich get richer and the poor get poorer.

City Councilman Bill Peduto has never seen a tax break that was big enough. Bill Peduto wants to take our most valued assets and diminish that tax burden so as to put a heavy tax on the neighborhoods. Bill Peduto is okay with policies that make the rich richer and the poor poorer.
Downtown housing in need of boost, but how?A debate on how to spur the emerging Downtown housing market is set to start today in Pittsburgh City Council.

On one side is Councilman William Peduto, who wants to replace the project-by-project tax breaks with a blanket abatement for most new construction. He's won some backing from Downtown advocates and developers.
Of course Peduto has won agreement with the downtown developers. They are the rich. They are the ones who pay into campaign fundraisers and go to $1,000 a plate events at The Rivers Club.

They drive the Pgh Downtown Partnerships so that they can get wi-fi on the sidewalk cafe meanwhile the kids in the neighborhoods who could USE wi-fi for homework, at home, can't.

They want to pick our cherries. They want to put in wi-fi coverage only in downtown hot spots. They want to ignore the neighborhoods. They want to give bigger tax breaks to the super rich. They want to subsidize the areas that don't need tax breaks. They want to put new tax breaks on places when the old tax breaks expire.

Instead, you need to tax the land. That's the policy of our great history that has given us affordable housing and downtown density. That's the policy that would make for a new revival in the city, the county and the region -- with Pittsburgh being a home to new development and new economic prosperity -- for everyone.

Equity matters. So, you don't allow a downtown deals to take root. You insist upon everyone being equal. You insist that wi-fi goes everywhere, or not at all.

You don't widen the digital divide as Peduto is trying to do.

You don't sit there at the table with a grin and say, 'community has been at the table' yet community is getting the shaft. Being at the table is one thing. Getting served is another. And getting the bill is yet another. They'll put the citizens at the table, not serve them, and have them pay because we've been at the table.

They get to pick the cherries -- they get the sweetheart deal -- they get to live off of foundation money -- they get to make tax breaks, again, for downtown deals that didn't work the last time -- and WE, the taxpayers and neighborhood workers get to pay the deal.

Here is the table.....

See that foot in the upper left part of the photo. That's how people vote, with their feet. Have a seat at this table. Pick up the bill, taxpayers. Service not required nor expected.

Suggested fixes: I'm not in favor of subsidized housing for rich people downtown with subsidized parking for their rich cars.

I'm not in favor of new planning groups to gather at the table set by city hall but leave out citizens, schools, taxpayers and people like me who represent the opposition. They can hatch up spledid plans -- but they need to be part of the city.

I'm not in favor of doing downtown plans when the city can't get flood control in other sections of the city, such as Hays. City needs to do the hard work that needs to be done to fix things that need to be fixed -- first.

I'm not in favor of doing TIF deals -- ever. So, let's agree to not do any TIF deals first and then let's do our best to figure out how we can set the TIF ceiling to ZERO. These new efforts from Petudo are needed now and are being put forth because the city is at its TIF limit. The tool box is spent and new tools and new city spending is needed by big spending.


Anonymous said...

Full article: Downtown housing in need of boost, but how?

Wednesday, April 26, 2006
By Rich Lord, Pittsburgh Post-Gazette

A debate on how to spur the emerging Downtown housing market is set to start today in Pittsburgh City Council.

On one side is Councilman William Peduto, who wants to replace the project-by-project tax breaks with a blanket abatement for most new construction. He's won some backing from Downtown advocates and developers.

On the other side may be the tax man, worried about losing too much revenue from the city's priciest neighborhood.

Mr. Peduto's resolution calls on Mayor Bob O'Connor to bring together a dozen groups with a stake in Downtown construction, from resident and business groups to labor organizations. They would consider his plan to waive property taxes on new Downtown housing for 10 years, and on new offices and hotels there for five years.

That would replace the long-standing approach of granting some projects tax increment financing, called TIF. In a TIF, a city agency borrows money to aid a development, and then pays off the debt using most of the new taxes created by the development over a set time.

TIF is "a subjective process of providing incentives," Mr. Peduto said. "We have an opportunity to create a financing mechanism that would be fair and equal."

The abatement would only work if the Pittsburgh Public Schools and Allegheny County participated, he said.

That may be a hard sell. Ira Weiss, an attorney handling tax matters for the city school district, said he wasn't sure schools can legally participate in abatements for specific neighborhoods or types of businesses.

"I think a project-by-project approach may be better because it gives the taxing bodies an opportunity to scrutinize the projects," he said.

Mr. Peduto said TIFs skew the real estate market, benefitting recipients like PNC Financial Services Group, which wants $18 million in local aid for its proposed $169.5 million tower on Fifth Avenue. He opposes that TIF, which is expected to come up for an initial council vote next Wednesday.

Ongoing or proposed Downtown housing developments would add around 1,000 new condominiums and apartments. Mr. Peduto called that "only a spark. ... If we fan the flames, through a tax abatement that is equal to everyone, we can turn that into a bonfire."

He said his office has found "well over 20" cities that have used downtown abatements, including Philadelphia and Columbus, Ohio.

In 2002, Columbus placed a 100 percent abatement on new, affordable housing in and around its downtown, and a 75 percent break on other housing there.

The aim was to spur 10,000 new residences in 10 years. The Columbus Downtown Development Corp. claims it already has led to 3,754 new housing units either built, under construction or proposed.

Pittsburgh already offers three-year property tax abatements to new housing, and developers can apply for another, limited tax break that phases out over 10 years.

"I don't think that's a big enough incentive," said John Valentine, executive director of the Downtown Neighborhood Association.

An abatement has to be big enough to offset the cost of building and parking Downtown, he said. The city would get wage, sales and deed transfer taxes from new residents, he said.

He backs Mr. Peduto's approach, saying he has heard from developers that bypassed Pittsburgh for cities with downtown abatements.

Also enthusiastic is Lucas Piatt of Canonsburg-based Millcraft Industries Inc., which is building 47 condos and townhouses in the former Downtown Lazarus-Macy's building.

Millcraft wants to build 805 more apartments and condominiums near Market Square, and has said that effort's "extreme success is contingent upon" a tax abatement.

Mr. O'Connor's administration hasn't yet embraced the idea.

"We'll review it based on the short and long-term economic and citywide development impact it has," said mayoral spokesman Dick Skrinjar.

Mr. Peduto's resolution also calls for tax credits for redevelopment of historic property, for construction of environmentally friendly buildings and for funding public art.

After the 10-year abatement expired, Mr. Peduto said, he would plow part of the new revenue into citywide property tax relief to create "a benefit for every city resident, not just those living Downtown."

(Rich Lord can be reached at or 412-263-1542. )

Mark Rauterkus said...

Mr. Peduto wants to bring together a dozen in his group of stakeholders. Those are the ones that need to rally to shove this down the throats of the taxpayers -- while they eat the cherries.

The people to bring together are NOT the wealthy developers. They've got their networks at the Duquesne Club.

They already come together to fund elections of corrupt politicians.

We've done a lot to end the long-standing practice of TIFs, because they are a rip off that don't work. Now they need to change the name. This is still a TAX BREAK for the rich.

The Peduto hatched financing mechanism that would be fair and equal -- NOT. Fair and equal is to have everyone pay their fair share the the amount of land they occupy.

The abatement would only work if the Pittsburgh Public Schools and Allegheny County participated, he said. -- Here comes the WOOL over the eyes. Here comes the smokey city, backroom deals. Here comes the 'done deal mentality.'

If you scratch my back, I'll scratch yours. Then we all pay five times as much.

That will be a hard sell for Peduto, as it sucks and people are NOT as stupid now that we have the internet. The city schools don't have an extra dime to give-a-way. They've already given it to the Giant Eagle in Shadyside, the Pgh Technology Council's new parking garages, next to the old garages that are not fully utilized. They've given too much for nothing to show for it.

TIFs do 'skew the real estate market' and PEDUTO has been for them all along, except one. It passed anyway. He didn't really fight it. He didn't make it an issue in the city council election.

The spark of downtown living was Gateway Center. People live there. That spark was decades ago. That works fine. But, people don't like to have the water-main break and have to move out of their homes for a few days, as happened last year. City leaders should work on the infrastructure.

If Bill is so hot on what the other cities are doing -- he can move there, along with all the other Pittsburgh folks who have left too. In Pittsburgh, we've got affordable homes in the city -- but not downtown. That's 87 good places to live, other than downtown.

As downtown gets to be a nice place for rich people to live, the other neighborhoods get to go down the drain.

The 10,000 new residences goal is proof to what I mean. Those 10,000 are going to take 8,000 from other neighborhoods. Perhaps 2,000 from suburbia. Meanwhile, a better deal would be to make 100,000 move into the neighborhoods in 10 years.

They want to look at the deed transfer tax as a way to pay for their tax breaks. Well, cut the deed transfer tax and then we all get a tax break. They want to rob Peter and Paul to line their own pockets.

If Millcraft wants to build 805 more apartments and condominiums near Market Square, go for it. Do it on his own dime and time. Rest assured that Pittsburgh will pull its weight and you'll be in good company.

Then the statement from Peduto about "City wide property tax relief" is like the cherry on top of a sunday -- a real joke and punchline. It comes at the end of the article too.

How about if we start with city-wide property tax relief, not in 10 years. How about if we do city-wide equity, now.

Then everyone wins.