Amended inclusionary zoning bill gives developers more for less | The Homepage

Arsenal 201's Phase II was the first project to be triggered by the inclusionary zoning ordinance in Lawrenceville. It includes 35 affordable units. Photo by Dave Breingan

By Ziggy Edwards for Junction Coalition

City officials are debating proposed changes to Mayor Ed Gainey’s inclusionary zoning reforms. In October, Pittsburgh City Council voted 5-4 to rewrite reforms he first proposed in September 2024 along with other zoning legislation to combat Pittsburgh’s affordable housing crisis.

Inclusionary zoning, also called IZ, is a policy or set of rules requiring new residential developments to make a percentage of the units affordable to low- or moderate-income households. Supporters say the reforms, which Bloomfield, Lawrenceville, Oakland and Polish Hill have already adopted, can help stem the tide of lower-income people being priced out of the city. Opponents say it would discourage building new housing by making developers take a loss on affordable units.

District 8 City Councilor Erika Strassburger introduced the bill’s new version in a surprise amendment by substitution on Oct. 8. These are the most drastic changes:

1. The requirement to include affordable units in new housing construction becomes voluntary. This has been the most hotly contested aspect of inclusionary zoning. Mr. Gainey’s plan required developers to set aside 10% of the units they build for affordable housing. In exchange, the developers would get a variety of perks — from tax breaks to density bonuses that let them do things like build taller buildings without having to get permission from the zoning board or city council.

The amended bill erases that requirement while keeping and expanding the incentives on the table.

2. The new housing fund lets developers contribute to get incentives without building affordable units. The amended bill creates an Affordable Housing Payments Fund. Developers who make a payment to the fund would get all the same benefits as if they had built units for affordable housing. The payment amount — $25 per square foot of residential space — is based on the size of the construction project.

That’s almost 30% less than the $35 per square foot of residential space that Pittsburgh’s Department of City Planning suggested based on an analysis of recent affordable housing development projects in Pittsburgh. According to Lawrenceville United Executive Director Dave Breingan, a frequent challenge with inclusionary zoning policies that have “payment in lieu” options is that the amount is set too low to finance an equivalent number of affordable units elsewhere.

3. The length of time a unit must stay affordable drops from 35 to 20 years. This matters because many of the bonuses developers get, such as permission to build taller buildings, are effectively permanent. The change is a 43% decrease in the amount of time affordable units are required to remain affordable.

The amendment also removes a renewal clause that would restart the “affordability term” if the building sells during those years. The 35-year term is the same as existing IZ rules in some Pittsburgh neighborhoods, but already much lower than the 99-year affordability term Mr. Gainey originally proposed. Advocates, including Mr. Breingan, point to research showing that longer affordability terms do not reduce housing production.

4. Greater participation bonuses allow developers to build higher and denser. Ms. Strassburger’s amendments would offer three “bonus points” to developers that participate, while Mr. Gainey’s original proposal offered two. Each bonus point is equal to 15 extra feet of allowable height and +1 FAR or Floor Area Ratio, which allows a building to be more dense relative to the lot it’s on.

Better or worse than the status quo?

“Whether it’s worse than the status quo in places that don’t already have IZ, a lot of people are asking themselves that question,” Mr. Breingan said during a Nov. 13 phone call. “These amendments are certainly a huge watering down from the standards in the existing inclusionary zoning overlay district, as well as Mayor Gainey’s original citywide proposal, and even a drastic change from months of compromises that advocates and the administration thought we had agreed with Councilor Strassburger on.”

District 5 City Councilor Barb Warwick said on Nov. 14, “It’s important to remember that we already have voluntary IZ in Pittsburgh.” If a development project includes 10% affordable units, she explained, they already get bonuses that allow them to build more.

“This opt-out fee is less than the cost of building those units elsewhere. So developers get all the bonuses without providing the compensation needed to create the affordable housing we need,” she said. “As far as the developers are concerned, it’s a major win. For folks looking for affordable housing in amenity-rich neighborhoods — not so much.”

Still, the changes do not seem to have earned any support from developers.

“We are opposed to the ordinance. We believe it is illegal,” said Jim Eichenlaub, executive director of The Builders Association of Metropolitan Pittsburgh, during a Nov. 17 phone call.

Inclusionary zoning places an unfair burden on developers to create affordable housing, something that has traditionally been funded through public subsidies, Mr. Eichenlaub said, claiming the policy has put a damper on development in the neighborhoods where it is in place.

The industry group unsuccessfully sued the city in 2022 over the zoning overlay affecting four Pittsburgh neighborhoods. Mr. Eichenlaub said the group has not decided whether to appeal.

Next stop: Planning Commission

Rather than hold a final vote on the rewritten bill, Pittsburgh City Council followed the legal department’s advice to send it back to the city’s Planning Commission for review. Changes made after the commission approved Mr. Gainey’s version earlier this year were significant. In any case, another Planning Commission review will likely mean months of additional discussion.

The Planning Commission must consider the bill within 90 days, and council typically has 120 days to hold a public hearing after the commission gives its recommendation. By that time, county controller and former District 5 councilor Corey O’Connor will have been sworn in as Pittsburgh’s mayor. Mr. O’Connor has said he disagrees with plans to require inclusionary zoning throughout the city.

Junction Coalition is a grassroots organization comprising residents of Four Mile Run and surrounding communities.