Housing Needs Assessment May 2016 Presented to The City of Pittsburgh Affordable Housing Task Force Project Consulting Team Cover designed by Di-ay Battad Table of Contents Housing Market Characteristics .............................51 Introduction ...................................3 Building Permits .................................................................51 Recent Market Rate Rental Development .......................54 A Summary of Housing Need ............................................. 5 Absorption Rates ................................................................55 Income Benchmarking ........................................................ 7 Income-Restricted Housing Inventory ............................55 Demographics & Housing Need .............................. 63 Housing Supply ............................. 9 Income Bands .....................................................................63 Population & Households ................................................... 9 Affordable Housing Gap ....................................................64 Housing Units .....................................................................14 Cost Burden ........................................................................67 Income .................................................................................16 Age ........................................................................................19 Displacement Risk ........................ 77 Tenure ..................................................................................20 Resident Vulnerability Index ............................................77 Structure Type .....................................................................22 Variables ..............................................................................78 Defining Affordability .................25 Results ..................................................................................78 Public Housing ...................................................................25 Appendix ......................................87 Rent Costs............................................................................ 26 Affordable Housing Gap Analysis Methodology ........... 87 Home Values .......................................................................29 Cost Burden by Neighborhood ........................................90 Home Sales ..........................................................................31 Resident Vulnerability Index Methodology ....................93 Affordability Analysis ........................................................35 Resident Vulnerability Index Variables ...........................94 Affordable Market-Rate Housing .....................................43 Resident Vulnerability Index Scores ................................95 City of Pittsburgh -- Housing Needs Assessment Contents 1 1 Introduction Introduction Methodology Housing has always been a major component of both Ameri- The analysis answers six primary research questions: can culture and public policy. However, the cost of housing has become a notably more prominent part of national discourse, » How well is supply meeting demand for various income lev- and increasingly represented in the news media, since the els and household sizes? Great Recession.1 As the overall economy has slowly recovered » Where are the locations of “naturally affordable” low-cost and the millennial generation has begun to influence labor housing? markets, transportation, urbanization, and more, housing pat- » What is the inventory of all subsidized housing that is at risk terns and preferences have continued to evolve. for loss? Affordable housing has become a particularly important » Residents of which neighborhoods will be at risk for displace- topic in Pittsburgh recently. Often lauded as a “livable” city, ment due to rising housing costs? the cost of living in Pittsburgh has remained lower than many other similarly sized cities in the country. At the same time, » What income groups will be served by new market-rate Pittsburgh’s economy has diversified from its industrial past, development? fostering significant local job growth in the health care, educa- » How many residents live in housing that is unaffordable? tion, and advanced technology sectors. The city is frequently portrayed as a Rust Belt success story. The analysis within the Housing Needs Assessment That combination of livability and celebrity can be a double- often uses the city’s median household income (MHI) edged sword, however, as investors’ and developers’ attentions as a benchmark for housing affordability. This approach are drawn to the potential high returns in the Pittsburgh mar- articulates what a “typical” Pittsburgh household could ket. As redevelopment and new market-rate housing construc- afford. The citywide MHI in 2014 was $40,009. tion occur, certain neighborhoods may be pushed beyond the reach of current residents. The city’s naturally occurring Obviously, those who earn less than the MHI usually affordable housing stock, which has been the key component have a harder time affording housing costs. Many of Pittsburgh’s “livability,” may be at risk. federal, state, and local programs designed to provide housing assistance target households earning a certain To influence housing affordability in Pittsburgh more direct- percentage of MHI, such as 30% (which for Pittsburgh ly, the Mayor and City Council formed the Affordable Housing was $12,003), 50%, or 80%. Analyses for these lower Task Force, comprised of elected officials, city staff, county income groups were included wherever possible and and state agencies, housing developers, and housing advo- practical. cates, in June of 2015. The Task Force’s mission is to: In addition to relying on citywide data, the Housing Assess the current and projected future landscape of Needs Assessment uses data at the neighborhood level. housing affordability in the City of Pittsburgh, evaluate current programs and initiatives to produce new afford- For technical reasons, some of the city’s official neigh- able units and preserve existing ones, and make recom- borhoods were combined into larger groups. In total, mendations to the Mayor and City Council to create new there are 77 neighborhoods referenced in this report. programs and initiatives and/or expand existing ones to promote mixed-income development in neighborhoods The individual sources and characteristics of the data- across the city and ensure a vibrant mix of housing op- sets used are discussed in each chapter. tions for people of all income levels. 1. The “Great Recession” or “housing market crisis” is defined as the 18 months City of Pittsburgh -- Housing Needs Assessment of economic decline spanning December 2007 through June 2009. Introduction 3 This Housing Needs Assessment is intended to fulfill one of the Task Force’s goals of reporting “findings regarding the existing landscape of affordable housing options” in the city. About the Data The legislation initiating the Task Force made certain claims The data used in this report comes from several sourc- about affordable housing in the city, including: es. The most heavily used sources are the American » There is a severe shortage of both rental and for-sale hous- Community Survey (ACS) and Public Use Microsample ing that is affordable and available to very-low income (50% (PUMS), which are both products of the US Census of the area median income) and extremely low-income Bureau. This information comes from surveys, in which (30% of the area median income) households. households self-report information on their social, eco- nomic, and housing conditions. » The shortage of decent, safe, sanitary, and affordable hous- ing is causing tens of thousands of very-low income and Due to the self-reported nature of census data and the extremely low-income households to pay over half of their potential for misunderstanding of the survey questions, income for housing costs. The severe cost burden faced by it is possible that some survey respondents did not pro- these households makes them vulnerable to health haz- vide entirely accurate responses. For example, a respon- ards, eviction/foreclosure, and homelessness. dent using a Section 8 Housing Choice Voucher may report their rent paid with or without the use of their » Much of Pittsburgh’s existing affordable housing stock is voucher, depending on how they interpret the survey both concentrated and often isolated in high-poverty/low- question. This may also impact the results of the Gaps opportunity areas which have poor access to jobs, public Analysis presented in this report. transportation, and educational opportunities inadvertent- ly perpetuating cycles of poverty. Despite these limitations, the US Census Bureau re- The Housing Needs Assessment explores these ideas, and mains the most accurate and reliable data source avail- many others that affect affordable housing throughout the able for most subjects covered in this analysis. city, in detail. City of Pittsburgh -- Housing Needs Assessment Introduction 4 Defining Affordability A Summary of Housing Need Like much of Pennsylvania, Pittsburgh’s housing stock tends Demographics & Housing Supply to be older and less expensive than housing in the rest of the country. Home values have appreciated overall, but most Pittsburgh’s population is changing, and housing needs homes are still worth less than $100,000. Because rehabilita- are changing as well. Overall population growth is