City Affordable Housing Plan Raises Hopes, Questions
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PITTSBURGH (KDKA) -- In the past few years, luxury apartment houses have shot skyward throughout the city, and houses in well-to-do city neighborhoods have doubled and tripled in value.
But Pittsburgh remains a tale of two cities. One block on Hamilton Avenue in Homewood remains blighted and affordable units can only be found elsewhere.
"There's a need for 21,000 affordable units in the city of Pittsburgh," Councilman Reverend Ricky Burgess, of Homewood, said. "If you lose your housing right now, there's actually no place for you to go. You have to move to Duquesne or Clairton or somewhere out the city."
Last year, council created an affordable housing trust fund designed to set aside $10 million dollars a year to rehab old units and build new low-cost ones -- like those in Homewood. Council has struggled to find funding source but now appears ready to raise a tax on the sellers and buyers of houses and other properties by increasing the realty transfer tax.
"Let's use the resources of these high-end developments to help fund affordable housing so we can rebuild low and moderate income communities," Burgess said.
Burgess argues that raising that money will make housing more affordable but critics say the opposite is true -- that raising that tax will make buying a home more expensive and put it out the reach of first time homebuyers.
The transfer tax charges the buyers and sellers a percentage of the sale property's value. For instance, at its current 4 percent -- the highest in county -- the city levies a $4,000 tax on the sale or transfer of a $100,000 house.
Since Burgess wants to increase that tax to 5 percent, John Petrack of the Realtor Association of Metropolitan Pittsburgh says prospective home buyers will buy elsewhere.
"If they would just walk across the city line, they could purchase the same value properly for only a total 2 percent transfer tax, and obviously with this increase that would make that difference even more onerous," Petrack said.
Still Burgess says most city taxpayer would remain unaffected and would benefit by seeing struggling communities move towards revitalization.
"Imagine Homewood as not just a low income neighborhood but a neighborhood of choice where no matter what your income is, you'll be able to live in Homewood, walk to the busway, be downtown in ten minutes and have a safe, clean, decent community to live, work, worship and play in," Burgess said.