Is there a Housing Crisis .... Seems to be if you go by this (Pittsburgh: renter, hotel)

[UKyank]

Originally Posted by PghYinzer

Yes, but not that are as connected via public transportation. That is a critical factor. The poor need access to public transportation, which is a major draw of East Liberty (and one that is going to continue to improve) but they are soon to be unable to afford it. f.

As much as our public transit leaves much to be desired there are plenty of city neighborhoods that are much more affordable & not in the east end that are connected as well.

[selltheburgh]

Originally Posted by PghYinzer

The median income for zip code 15206 in 2010 was $39,661. That is a 64% increase in 5 years. No wonder these people are getting priced out of their neighborhood, the standard that is used to decide what is "affordable" forgets that it is definitely becoming an area of the haves and the have nots. You either stroll around with your Google-like salary shopping at West Elm and laughing it up at the Livermore or you are living below poverty and getting evictions notices.

That's not entirely true. The number of households under $10,000 or $12,000 per year went down majorly while higher income households definitely increased.

Also - 15206 is a giant zip code:

https://www.google.com/maps/place/Pi...ee99bc5c03974b

Pretty much all of:
Highland Park, East Liberty, Morningside, Larimer, Lincoln-Lemmington.

Plus parts of:
Garfield, Friendship, Shadyside, Pt Breeze, Homewood, Stanton Heights.

[selltheburgh]

I meant to say that they generally figure out median income by census tract, not zip code.

[I_Like_Spam]

Originally Posted by UKyank

There's lots of city areas outside of the East End....

Indeed.


And a lot of them are very affordable.


East Liberty is hot, so rents are moving higher. But there are plenty of affordable housing opportunities in places like Stowe, Springdale and East McKeesport.


As far as new construction, developers have to be able to generate enough money to justify not only the considerable construction expenses but to move the plans through the planning commissions that govern this kind of project. Only way to do that is by higher rents, or HUD subsidies in the development of low income housing.

You aren't going to see 400-500 rents on brand new apartments- it just isn't going to happen- unless you are talking about a new housing project. Where reasonable rents exist, its established housing in areas without much demand.

As far as people being displaced in East Liberty, they can either hope and lobby for new HUD projects in the area, or plan to move someplace else. If they aren't poor enough to qualify for the projects, they can move to Cheswick if they don't have a fear of purple elephants

[gladhands]

There is far too much affordable housing in Pittsburgh for this to be a concern for me. This city is filled with cheap, safe neighborhoods, and maybe 4-5 "expensive" ones. This isn't Brooklyn or San Francisco.

A person earning 12.50/hr in a call center can live in Bloomfield or Mt Washington.

[SteelCityRising]

The problem is that most people of lower socioeconomic status (LSES) rely upon public transportation to access their workplaces, medical appointments, shopping, and other essential needs. Sure, you can be like I_Like_Spam and tell the poor to move to places like White Oak, Natrona Heights, or Stowe Township if they can no longer afford our increasingly cost-prohibitive city, but how easy is it to live without a car in these aforementioned areas? I feel like it would be difficult to live here in Polish Hill without a car, so I could only imagine the hardship of living way out in a place that is nearly 100% car-dependent without the luxury of being able to afford a car.

Those of LSES need to live as close to the urban core as possible so they can survive on PAT's meager bus route offerings. On the other end of the spectrum the affluent are now also increasingly likely to prefer living sans car for less stress and want to be able to walk to Starbucks, boutiques, grocery stores, banks, dry cleaners, etc.

I think BlackBeauty nailed it, as usual. This city needs to stop being so conservative and cease the "ANY development is GOOD development" mentality and realize we need to build bigger. Let's say the city mandates that any and all new residential developments comprised of at least 50 units must set aside 20% of those units as being "affordable". It is then in a developer's best interest to increase their profit potential by building MORE units so that the greater number of market-rate units can help offset the whammy of having all of the affordable units.

For example, if a developer is going to spend $10,000,000 to build a 50-unit 1-BR project in the East End (cost of $200,000 per unit), then 40 of them will be market-rate (let's say $1,200/month since that seems to be what many newer non-luxury 1-BR units here are going for these days) and the other 10 will be "affordable". Of course, at 80% of $1,200/month being $960/month that is still out of reach for those of LSES, so the threshold would have to be set much lower---at like 50%---to make those affordable units rent for those of LSES at $600/month.

40 1-BR units x $1,200/month = $48,000/month or $576,000/year.
10 1-BR units x $600/month = $6,000/month or $72,000/year.
50 TOTAL 1-BR units = $54,000/month or $648,000/year.

To hit the "breakeven" point at which the initial $10,000,000 investment was recouped, the developer would have to collect rent on those units (assuming constant 100% occupancy) for just over 15 years, after which point the developer would be generating a profit beyond that initial sunk cost.

Now let's assume the developer will spend $50,000,000 to build a 250-unit 1-BR project in the East End (cost of $200,000 per unit), with 200 units being market-rate ($1,200/month each) and 50 units being "affordable" ($600/month each).

200 1-BR units x $1,200/month = $240,000/month or $2,880,000/year.
50 1-BR units x $600/month = $30,000/month or $360,000/year.
250 TOTAL 1-BR units = $270,000/month or $3,240,000/year.

To hit the "breakeven" point at which the initial $50,000,000 investment is recouped, the developer would have to collect rent on those units (assuming constant 100% occupancy) for the same amount of time---just over 15 years.

^ Looks the same, right? Why go bigger when the breakeven point will still take 15 years? The clincher? With more units the developer also has the flexibility to make more of the market-rate 1-BR units market-rate 2-BR units by altering the floor plans of some of the units and raising rents accordingly ($1,500/month for the 2-BR units). Throwing in one interior divider wall to make the one spacious BR in the 1-BR unit two separate smaller bedrooms shouldn't dramatically increase construction costs, so I'm keeping the projected cost at $200,000 per unit.

Now we'll have this, perhaps:

100 1-BR units x $1,200/month = $120,000/month or $1,440,000/year.
100 2-BR units x $1,500/month = $150,000/month or $1,800,000/year.
50 1-BR units x $600/month = $30,000/month or $360,000/year.
250 TOTAL units = $300,000/month or $3,600,000/year.

With the additional income boost from the 2-BR units, the developer will recoup the initial $50,000,000 investment quicker, in under 14 years, and start generating a profit.

It just makes more sense to build bigger mixed-income residential projects with higher unit counts so that there will be greater levels of affordable housing within each project, and the developer can also add in some more lucrative 2-BR units, too, in the process. More "affordable" units means those who are LSES win. More units overall means the entire community nearby wins as existing businesses have their bottom lines bolstered, and new businesses are enticed to open. Wait until Morrow Park City Apartments are at full capacity, and I'm sure Ritter's Diner will report a nice uptick in business overall as many of those hundreds of new neighboring residents will head there for a Saturday breakfast or for a late-night dinner on the way home from a clinical rotation at their workplace, the nearby UPMC Shadyside Hospital.

[stburr91]

I understand that there are many more renters, than rental owners, so people will tend to be bias towards the viewpoint of a renter. However, I honestly wonder if some of you people have ever made an investment before, because you seem to not understand the idea of maximizing your profit margins. You also seemed to have missed the fact that the region has seen almost no net job gains in much of the last 3-4 years, and that the latest estimates show both the city, and the county losing population.

Driving rents down lowers property values, and income for the investors. Would you choose actions that would drive your wages, and 401k down? If not, why would you expect developers to build at a rate that would drive rents down?

Let's also not forget that building the number of units that some of you want, would wreak havoc on the many affordable neighborhoods, as the rental market becomes oversupplied.

[I_Like_Spam]

Originally Posted by SteelCityRising

I think BlackBeauty nailed it, as usual. This city needs to stop being so conservative and cease the "ANY development is GOOD development" mentality and realize we need to build bigger. Let's say the city mandates that any and all new residential developments comprised of at least 50 units must set aside 20% of those units as being "affordable". It is then in a developer's best interest to increase their profit potential by building MORE units so that the greater number of market-rate units can help offset the whammy of having all of the affordable units.

.

I just have a real problem with subsidizing tenants who can afford their own apartments, but just not in the location they desire to live in.


Putting aside the fiscal problems with providing people who make 30-40k a year with a $1400 subsidy so they can pay $600 to live in a $2000 a month apartment, this kind of strategy really turns the market on its side.

Folks earning $40k that are already living in a $600 flat in Brackenridge might want to move to the city with this new entitlement being offered. Others might not want to move, but think they should get a new apartment or the $1400 subsidy in the interests of fairness.

People who own rental properties in Sheraden and Leetsdale might not want to lose the tenants.


These brand new luxury buildings at a bargain price will be a scarce resource, who will get them, who will be left out in the cold. Will employers be able to offer these subsidized apartments if they have want to sell their company and Pittsburgh to people being recruited for lower level positions who live out of state.

I don't know exactly how it will play out, and it probably won't be good for a lot of people.

[UKyank]

I would like to live next to Central Park but I don't make enough money so I don't, nor do I expect to.

& claiming that east liberty or the east end are the only nice places that have public transit links to allow lower income people to get to work or shop, etc. is a bunch of BS

[gg]

Sometimes one small group gets hit a bit for the greater good. The greater good in this case is for the more affluent to move into the city limits to create a better school system, better income for the city to help with development and maintenance. At the moment there is WAY too much poverty in the city itself. Those are just the facts. The city needs help and that isn't going to come from the food stamp/section 8 crowd. Look at the people that do the volunteer work. Mostly folks from the better neighborhoods heading it up and cleaning all the litter and mess that seems to be never-ending from the poor sections of the city because so many of them could care less. Sorry, but it is what it is. I would love to see East Liberty turn into what it once was. A great area. Take it back in time to its glory days, not allow it to continue to drag and be filled with litter and crime.