PITTSBURGH — Converting downtown office buildings to residential properties and beyond: that is the focus of new legislation announced by Pittsburgh City Councilman Bobby Wilson Monday morning.
“Downtown Pittsburgh is in serious financial trouble. After the COVID-19 pandemic, the demand for commercial office space has dropped significantly,” Wilson said.
City officials said nearly 30% of downtown office space is currently vacant, and that number is only projected to get worse, with upwards of 50% expected to be vacant by 2028. Wilson said Downtown Pittsburgh accounts for a quarter of the city’s total real estate tax revenue, or about $35,000,000, but as property owners appeal assessments and face foreclosure, Wilson said that number will fall.
“That’s why we are all standing here on this stage because we are all partners in trying to make downtown work,” Wilson said.
Pittsburgh City Council has created a new Local Economic Revitalization Tax Assistance program (LERTA) to incentivize the conversion of office towers and historic buildings into much-needed apartments and condos.
“This legislation really is a component of how we’re going to transform these buildings and make them a part of our future for the next 50-100 years,” said Jeremy Waldrup, president and CEO of Pittsburgh Downtown Partnership. “We’ve seen about 21 percent growth in our residential population in just the last five years. We’d like to see that number of 7,000 residents grow to about 15,000 ultimately, and this program is a big part of how we get there.”
Wilson said the program offers an enhanced tax exemption option, requiring either affordable housing or the creation of jobs to accompany a conversion project, which will create additional tax revenue for the City of Pittsburgh while attracting more businesses downtown. Union leaders applauded the program, calling it a bold but necessary step in creating a thriving and sustainable downtown.
“It’s also the creation of hundreds and hundreds of family-sustaining jobs,” said Darrin Kelly, president of the Allegheny Fayette Labor Council. “We know we’ll have some tough times, but this shows everybody — business, labor, government — is going forward with one thing in mind: protecting our great region.”
The bill will be formally introduced at Tuesday’s city council meeting.
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