Pittsburgh City Council vote means deed transfer tax will likely increase in January |

Pittsburgh City Council vote means deed transfer tax will likely increase in January

Bob Bauder
Jasmine Goldband | Trib Total Media
A tall grave marker at St. John's Cemetery, shown with the Pittsburgh skyline in Spring Hill Sunday, Nov. 22, 2015.
Jasmine Goldband | Trib Total Media
A tall grave marker at St. John's Cemetery, shown with the Pittsburgh skyline in Spring Hill Sunday, Nov. 22, 2015.
James Knox | Tribune-Review
City Councilmen Rev. Ricky V. Burgess announces a coalition with Pennsylvania State Representatives Jake Wheatley and Ed Gainey, City Councilmen Daniel Lavelle and County Councilman DeWitt Walton to develop a peace and justice agenda that focuses on equity, diversity, increased living-wage jobs, increased affordable housing, good public schools and safe communities for all the residents of Pittsburgh during a press conference July 21, 2016 in the City-County Building Portico.
Andrew Russell | Tribune-Review
Councilman R. Daniel Lavelle (Trib photo)

Pittsburgh City Council on Wednesday advanced legislation that would increase the city’s realty transfer tax by 25 percent to help the city increase its stock of cut-rate housing options for families living at or near the poverty line.

The tax on property sales would increase in two phases by 0.5 percent. It would jump from 4 percent to 4.5 percent in January and to 5 percent in January 2020. It would remain at 4.5 percent in 2019.

The money would go into a trust fund that council established last year to build housing and rehabilitate older homes for those who qualify under low-income standards.

Realtors attending a council meeting opposed the increase, saying it would stymie real estate investment and push potential home buyers to suburbs where the tax rate is lower.

They said the increase would be tacked onto a buyer’s closing costs and have a disproportionate impact on first-time home buyers and people in lower income brackets who are buying a home.

Councilwomen Darlene Harris of Spring Hill and Natalia Rudiak of Carrick agreed. They voted against the increase.

Rudiak said her office found that 74 percent of real estate transfers in 2016 were for $150,000 or less.

“What that means is low- and moderate-income people buy properties of $150,000 or less and they will bear the greatest burden of this tax,” Rudiak said. “I don’t think we can solve the affordable housing crisis by making housing more expensive.”

Supporters noted soaring rental rates in neighborhoods such as East Liberty, where development is booming. They said pending council legislation that would provide subsidies to help lower-income property buyers pay closing costs would offset the tax increase.

“When folks talk about 10,000 vacant houses in the city of Pittsburgh, we don’t have any money to fix them up,” said Mark Masterson, executive director of the Northside Community Development Fund. “When you see these vacant houses, that’s the big reason.”

Council gave preliminary approval to a bill sponsored by Councilman Dan Gilman of Squirrel Hill that would authorize grants from the affordable housing trust fund equal to 2.5 percent of a sale price to first-time home buyers.

The grants would be available to people who buy owner-occupied homes at or below the average sale price of a house in Pittsburgh. Gilman said the grants would more than cover a 1 percent increase in the transfer tax.

“Any argument that it is more expensive to buy your first home in the city than the suburbs is moot,” he said.

Officials have estimated 17,000 city residents need housing at below competitive market rates.

The current 4 percent transfer tax is divided among the city, which receives 2 percent, Pittsburgh Public Schools and the state, which each receive 1 percent. It is a one-time payment typically split between the seller and buyer of a property at closing.

Council approved the increase by a 7-2 vote. A final vote is expected on Tuesday. Mayor Bill Peduto previously said he would support the tax increase.

Bob Bauder is a Tribune-Review staff writer. Reach him at 412-765-2312, [email protected] or on Twitter @bobbauder.

TribLIVE commenting policy

You are solely responsible for your comments and by using you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.