Thoughts on Dahntahn - pt. 2

Part II:

Problems

First and foremost, the City and its related entities own too much property. [There. I said it. I feel better.] As the City acquires more property, it provides a negative incentive to private landowners to improve their own property. As the threat of acquisition by eminent domain has never fully been off the table, private owners are stuck between the choice of improving a property that might eventually be taken or selling off property to a monopsonistic buyer. Neither is truly efficient.

Second, unfortunately the City can't really get rid of the land until it has a real buyer. One of the quirks of redevelopment law is that the URA can only sell to buyers that have evidence of plans, financing, and drawings, i.e., they have a real redevelopment plan. The upside of this is that the local slum lord can't acquire publicly owned property, sit on it, and speculate; the downside of this is that unless there's a real buyer, the city is holding onto this property forever. This compounds the first problem.

Third, costs of downtown development are high, really high, but the market rents that a developer can achieve are really low. While other cities may be able to achieve $1,000+/month in residential rents, in Pittsburgh that looks awfully close to a mortgage payment. In order to offset the low rents, developers need to either (a) reduce their upfront costs [i.e. acquisition, construction, etc.], (b) reduce their overhead costs [utilities or amenities], (c) provide for additional amenities to drive up rents [i.e., provide on-site parking], or (d) spread these costs over more units to make the cash flows work. If you can achieve any of those, you might have a shot at a sucessful development, otherwise you can forget it.

Fourth, Downtown is the bastard neighborhood. There is no real community or community group as of yet to take ownership. There is no Community Based Organization to guide the neighborhood, provide consensus, or make the neighborhood economically viable. Those that do have "an interest" in the neighborhood, I would describe as transients: the City, the PDP, PHLF, all of whom may work in the neighborhood, but are not tied to it.

Fifth, yeah... parts of it still smell like piss.

Sixth, Parking. Well, not parking per se, but a "perceived lack of transit opportunities" if you would. While nearly every busline services downtown, and every T-line runs through downtown (all one of them), the option of living without a car is anathema to most of us living in the U-S-A. Combined with the 50% parking tax, this makes the prospect of downtown living nearly impossible.

Seventh, while the stock of really interesting and architecturally significant buildings in downtown is high, so is the cost of rehabilitating them to usable condition. This is slightly different from my third point above, which can be applied to new construction as well. Existing building in the downtown area built before 1978 are more than likely filled with extensive hazardous materials (PBCs, asbestos, Lead Paint), which need to be abated in what is often a cost prohibitive process. Additionally, so much of the downtown is "historic" and the cost of bringing these buildings up to historic standards is also very high.

Addendum: Almost forgot (actually did forget) to include the biggest problem, and the most pervasive, namely, that Pittsburgh and the Pittsburgh Region ain't doing so hot. I've seen a few measurements that show the City itself doing better than the suburbs, but when yourr competition is Wall or Cresent townships, I think you have bigger problems. This problem cannot be fully addressed through the improvement of Downtown; instead, the City of Pittsburgh will have to compete with the suburbs and exurbs for its own life. That's bad, myopic thinking for the region. Much better to compete with Cleveland or Harrisburg than to compete with Mt. Oliver.

Anyway, onto Part III... Strategery.