Update (8/1/23): Pittsburgh City Council approved a long-awaited tri-party agreement with the city’s Land Bank and the URA on Tuesday and, in doing so, backed off its plans to secure a high level of council oversight over the land bank’s transactions.
Legislation preliminarily approved last week would have required a council member to sign off whenever the land bank wanted to transfer property to the URA. That language was removed from the bill in a Tuesday amendment, replaced by a requirement that the land bank simply notify the city council clerk of any transfers.
Tuesday’s amendment, approved by an 8-0 vote, also removed a requirement that city council reauthorize the tri-party agreement in two years. That requirement drew objections from several council members at last week’s meeting, including senior members Bruce Kraus and Ricky Burgess.
Council President Theresa Kail-Smith was absent from Tuesday’s vote.
The final version of the agreement set a goal that 80% of properties disposed of by the land bank go toward the development of affordable housing. Council also required the land bank to give quarterly updates on its finances, how many properties it holds and transfers and how many housing units are created.
Pittsburgh’s go-slow land bank getting more tools, but less funds
The Pittsburgh Land Bank’s ability to take ownership of vacant property is the subject of a July 20 public hearing before city council, in one of a series of moves that could strengthen the nine-year-old institution — even as it may see its allocation cut.
The public hearing regarding a new agreement between the city, the land bank and the Urban Redevelopment Authority [URA] comes the week after the Gainey administration proposed to split in half the land bank’s $7 million allocation of federal funds. It comes less than two months after the land bank bought its first property and weeks after Gov. Josh Shapiro signed legislation that could make it easier to assemble more property.
Like other so-called Rust Belt cities, Pittsburgh’s population plummeted after the decline of the steel industry, leaving more than 20,000 properties fallow and incurring tax debt. In 2014, Pittsburgh formed a land bank to clear debt and taxes from abandoned properties that can then be sold.
After years of false starts and promises of progress, in May the land bank sold its first property on Mount Washington’s Boggs Avenue.
Council, though, is considering a Gainey administration proposal to transfer $3.5 million of the land bank’s allocation to the URA, which serves as the city’s development arm, to ensure that the funds get used before the federal use deadline expires. City officials said the attempt to bifurcate the funds between the land bank and the URA’s property stabilization program will help the two organizations work in tandem toward land reuse.
The URA became an affiliate entity of the land bank in 2021, requiring all inquiries with the land bank to go through the URA. The URA didn’t respond to multiple requests for comment and for an interview with the land bank manager.
Splitting the funding “isn’t a reduction in any meaningful way in the city’s commitment to what we broadly call the land recycling process,” said Deputy Mayor Jake Pawlak.
New law helps, but staff needed
On July 5, Shapiro signed legislation allowing land banks like the one in Pittsburgh to acquire property more quickly. It will go into effect in September.
Sponsored by state Sen. Wayne Fontana, D-Brookline, the legislation aims to streamline the legal procedures related to title clearance by making small changes to the sheriff’s sale process, making it friendlier to land banks. The changes aim to expedite the process by automatically creating a judgment when a lien is filed and removing onerous requirements surrounding the service of documents, among others.
Tax liens result when a property owner owes back property taxes to a taxing body, like a school district. These liens can oftentimes be difficult and expensive to clear, especially at city treasurer’s sales.
Sheriff’s sales, unlike treasurer’s sales, are legally required to give priority to land banks over private bidders.
An Lewis, executive director of the Tri-COG Land Bank operating in Allegheny County’s eastern suburbs, helped Fontana to craft the law. Lewis said the amendments save precious time for land banks, helping them more easily acquire clean, insurable deeds on properties.
“Time is important. Time is money,” Lewis said. “We know for sure it will be faster. How much faster, we don’t know.”
Fontana previously served as a Pittsburgh Land Bank board member but he said he stepped down when Mayor Ed Gainey was elected because he didn’t see any desire from the administration to fix the land bank. Since then, he said, he’s seen promising changes coming out of Gainey’s office. Gainey’s administration lobbied heavily for his amendments.
“The passage of this bill is an incentive to make the other commitments that are needed to make the land bank effective,” he said, but it’s not a “solve-all.”
“You have to have a commitment of personnel and money,” he said.
Too much in the land bank’s accounts?
The wins aren’t enough to convince the Gainey administration that the land bank will be able to use all the federal American Rescue Plan Act [ARPA] funds allocated to it before looming deadlines to obligate funds, or enter into contracts, by the end of 2024 and to spend them completely by the end of 2026.
In 2021, former Mayor Bill Peduto allocated $10 million in ARPA funding for the land bank. In late 2022, $3 million of that initial allocation was moved to a food justice fund. The Gainey administration proposed the newest cut of $3.5 million to the land bank’s budget on July 11, which was held for an as-yet-unscheduled public hearing before council.
The administration has opted to divide the federal dollars between the URA and the land bank to ensure they are spent by the deadline, according to Pawlak.
“This isn’t a change in priority — it’s an evolving and more sophisticated strategy on our part that has taken place over time,” Pawlak said, explaining that since taking office, the administration has continued to adjust the budget to have the money spent by deadline.
He said the original designation of $10 million was made by the previous administration and since Gainey took office, they have had to reconsider the feasibility of spending all that money in the face of obstacles.
At least one member of the land bank’s board, Councilman Bobby Wilson, is concerned about the land bank’s proposed budget reduction.
“I wanted $10 million, but I’m only one person,” he said. “You need money to build something.”
Asked whether $3.5 million was enough to build a strong land bank, Wilson said: “No, we need more.”
The idea, Pawlak said, is that the URA will use its $3.5 million share to fix up existing city-owned properties and then sell them to the land bank.
New agreement waited a year
Pawlak said the land bank’s delay in spending its ARPA money is due, in part, to council’s slow handling of legislation to approve changes to the so-called tri-party cooperation agreement between the city, the URA and the land bank. Council has been concerned with maintaining its ability to control land sales and prevent effects like gentrification.
The amended agreement, which would allow the purchase of property by the land bank from the city and URA, was originally introduced to council in June 2022.
Even with this delay, Pawlak is confident that after the public hearing on Thursday, the amendment to the agreement will pass. In the unlikely event that the amendment does not pass, Pawlak said the Gainey administration is figuring out ways to overcome the city’s abandoned property issue without the land bank.
“If council, with the power that it is duly allowed under law, does not accept the changes proposed, we would find the next best way to meet the requirements,” he said.
Gainey has previously said the land bank needed to be completely redone, including the removal of Pittsburgh City Council involvement. Pawlak said Gainey would still welcome that change.
“That’s the ideal, and he would gladly accept that,” Pawlak said.
Pawlak said that after the ARPA funds expire, the city will attempt to draw upon local sources to fund the land bank, but no concrete plans are in place.
“Nobody wants blighted homes in their neighborhoods,” Fontana said. “It’s not one of those philosophical things where you say, ‘I don’t want to fix up blight in my city.’”
Lucas Dufalla is an editorial intern with PublicSource and can be reached at firstname.lastname@example.org.
Eric Jankiewicz is PublicSource’s economic development reporter and can be reached at email@example.com or on Twitter @ericjankiewicz.
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