Pittsburgh office-to-residential conversion fund begins to accept bids

Dive Brief:

Pittsburgh’s redevelopment agency is accepting funding applications from developers looking to convert underutilized downtown office buildings into affordable residential housing, according to a recently released request for proposals.
The Urban Redevelopment Authority of Pittsburgh's Downtown Conversion Program will use funding from the agency, state and $2.1 million in federal American Rescue Plan Act funds that Pittsburgh allocated in July.
The program “seeks to improve the vitality of Downtown Pittsburgh by converting a portion of the vacant commercial office space into mixed-income developments that include affordable and workforce housing,” said Pittsburgh Mayor Ed Gainey in a July press release.

Dive Insight:

Pittsburgh is one of several cities aiming to convert underutilized office space into housing to both revitalize their downtowns, which have experienced losses in foot traffic due to employees of businesses working remotely or in hybrid arrangements, and to address the shortage of housing units that has contributed to the ongoing affordability crisis.

District of Columbia Mayor Muriel Bowser, for instance, set a goal last month to add more than 100,000 new residents to the city’s downtown, including 15,000 over the next five years, through office-to-residential conversions.

Pittsburgh’s program will provide subordinate loans to downtown projects that commit to creating at least 20% of housing units that are affordable to residents earning at or below 80% of the area median income threshold. It will also prioritize projects that lease to and hire downtown workers earning 60% of AMI or lower, use the city’s Housing Choice residential assistance voucher program and maximize other public and private financing sources.

“Under current conditions, many who work Downtown cannot afford to live in the neighborhood, or struggle to find available affordable units,” the program’s RFP states. The program “looks to simultaneously address the lack of quality affordable housing options Downtown and reduce underutilized office space.”

The Downtown Conversion Program will help the city recover from the “devastating impacts” the COVID-19 pandemic had on Pittsburgh’s downtown commercial buildings, said State Senate Minority Leader Jay Costa, D, in a statement last July.

“Providing funding to assist converting these spaces will jump start the creation of needed and desired residential properties and reinvigorate the Golden Triangle,” Costa said.