Self-indulgence alert

With all the talk recently about promoting residential development in Downtown Pittsburgh, I figured I'd share an article I wrote almost two years ago for the dear, departed Pulp, which is no longer available online. Have at it.

By Jonathan Potts

Tell people he lives Downtown, and Don Carter inevitably hears the same silly question. He’s so used to hearing it that now he answers it before it’s even asked.

“When I need groceries, I get in my car and drive there, same as everyone else,” said Carter, 62, a resident of the Pennsylvanian, the luxury apartment building at the site of the old Union Station at the edge of Downtown.

Carter couldn’t have picked a better day to extol the virtues of Downtown living. The weather is warm and sunny. The streets are teeming with people, many of them--easily identifiable by the name tags that hang from their necks--in town for the United Methodist convention at the David L. Lawrence Convention Center. Carter enjoys a leisurely lunch at Tonic, which sits at the Corner of 10th Street and Liberty Avenue, a block from the apartment he shares with his wife, Bea. Someone unaccustomed to spending a Saturday Downtown would be pleasantly surprised to find a place like Tonic a) open and b) relatively crowded.

Seven years ago, their children grown, the Carters moved Downtown from Regent Square, partly to live close to where they both work. “It just didn’t make sense if we both worked Downtown not to be living Downtown,” said Carter, the president of Urban Design Associates, an architectural firm.

To Carter and other advocates of Downtown living, he and his wife are the wave of the future, the force that will revitalize the Golden Triangle where department stores like the now-shuttered Lazarus failed. The logic of housing as an engine of revitalization--that residents will shop in Downtown stores, eat in Downtown restaurants, and keep Downtown vibrant long after commuters have gone home--seems unassailable, and it is that very logic that would explain the failure of the city’s retail redevelopment strategy.

“It’s what activates the center of the city, to have people live Downtown as well as work Downtown. I think the great European cities are vibrant for that very reason. ...I think retail can follow the market of the residents,” Carter said.

Empty-nesters like the Carters represent a key demographic that experts say will be drawn to Downtown housing. Pittsburgh, as we all know, is lousy with empty-nesters. But the rest of the country is graying too, and Carter believes the aging of the Baby Boomers is fueling a demand for downtown housing in several cities.

Another potential market for Downtown housing are young professional singles and couples without children, people like Mark Shannon, 32, an architect who moved from Cheswick into a 24th-floor condominium in Gateway Towers several weeks ago.

Shannon, who works Downtown, traded a 45-minute drive down Route 28 every weekday morning for a 10-minute walk across Market Square. His 940 square-foot condo, with a breath-taking view of Mt. Washington and the Monongahela River, and a living room large enough to accommodate his pool table, is a bachelor’s paradise.

“I don’t cook much, so when I’m coming home from work, I’ll stop, get an appetizer and have a beverage,” Shannon said while dozens of people paraded through his home during a recent Downtown housing tour sponsored by the Downtown Living Initiative. The tour drew almost 300 people.

If others share the Carters’ and Shannon’s motivation for moving Downtown--namely, a desire to live in proximity to where they work--then one could infer that Pittsburgh, despite its ongoing population loss, has an advantage in luring people to live Downtown because of the sheer number of people who work there. Despite all the hand-wringing in recent years over the decline of the Golden Triangle, 10 percent of all jobs in the Pittsburgh region--and the best-paying jobs--are located within the city’s central business district, according to Christopher Briem, a regional economist with the Center for Social and Urban Research at the University of Pittsburgh. That’s a higher concentration than in all but a few metropolitan regions nationwide, Briem said.

But even if demand for Downtown housing is as great as Carter and others say it is, that’s only half the equation. The other side is supply, and that’s where battle lines get drawn. As with the debate over Downtown retail redevelopment, on one side are those who believe that market forces, working through grass-roots organizations and entrepreneurs, should be trusted to revitalize Downtown, with minimal assistance from government. In the other camp are those who believe that Downtown will careen off a cliff without the intervention of the Pittsburgh Urban Redevelopment Authority to acquire key properties and subsidize selected developers.

“If the URA goes away, we’re dead,” said Eve Picker, president of no wall productions, which develops loft apartments Downtown.

Over the last seven years, Picker has redeveloped several Downtown buildings into apartments. She claims to have rented some of her apartments sight unseen.

“I’ve literally rented to people who have seen photos (of the apartments) over the Internet,” Picker said.

But developing Downtown housing is no goldmine, according to Picker. She said construction costs in Pittsburgh are the same as in Chicago, but landlords can command only one-third the rents. And because she hasn’t been able to secure enough private financing for some of her projects--commercial banks, Picker said, tend to under-appraise the value of the buildings--she’s has had to rely on loans from the URA to get adequate funding.

“We have so many older buildings here and it costs so much to renovate them, clean them up and get them ready for use, and when you’re talking about residential development, you’re talking about a mostly lower profit margin,” said Patty Burk, the program director for the Downtown Living Initiative, a foundation-funded organization charged with promoting Downtown housing.

As a result, many of the lofts and condominiums available Downtown are pricey. Picker’s Bruno Building, on Liberty Avenue, has her cheapest apartments, ranging from $1,400 to $1,500 a month for a 1,700 square-foot apartment. Most of her apartments go for $1 per square foot and up. A 635 square-foot, one-bedroom apartment in the Pennsylvania goes for $850 a month--and that doesn’t include the $125 monthly parking fee.

And while Picker said she plans to make some two-bedroom apartments available, most Downtown apartments and condos are one-bedroom, which means they can be shared only by couples.

What that means is that you’ll never have the diversity needed to make Downtown a truly vibrant urban neighborhood, said Pat Clark, cofounder of the GroundZero Action Network, a grass-roots organization of artists and activists devoted to urban renewal. Clark doubts that Downtown’s current crop of housing is going to provide the critical mass needed to turn the Golden Triangle into a residential neighborhood.

“We already have residents Downtown, but they’re not demonstrably the people who attract other residents,” Clark said.

Although the Cultural District, where a lot of Downtown housing and night life is centered, seems to be growing, the Downtown population is only about 1,700, the same as it was in 1990. (That doesn’t include students, who number about 1,500 Downtown during the academic year.)

Historically, one of Downtown’s largest neighborhoods was in the lower Hill District, where 8,000 to 10,000 people once lived, Briem said. But those homes were bulldozed more than 40 years ago to make way for Mellon Arena.

“There are people living in other downtowns, and my take on it is that a lot of those other cities had a housing stock to regentrify,” Briem said. “What makes us unique is that there is so little housing to redevelop.”

Bernie Lynch, a real estate developer and the former executive director of the Market Square Association, said that the private sector, if left to its own devices, can create the kind of affordable housing that has traditionally been found in cities.

“People used to live Downtown in greater numbers, and where they lived was above the store fronts and in residential buildings. But what has happened over time is that the zoning laws changed to prohibit the occupancy of people above retail stores,” Lynch said.

The good news is that changes to the zoning codes that will take affect later this summer will remove many of the legal barriers to transforming retail and office space into housing, according to Lynch. But the political barriers will remain, said Lynch, who was a member of the Mayor Tom Murphy’s Plan C Task Force, which studied Downtown redevelopment in the wake of the collapse of the mayor’s controversial Marketplace at Fifth and Forbes plan.

Lynch said that long-time property owners are in a better position to create affordable housing than developers like Picker, who must borrow heavily to purchase buildings, then must charge high rents to recoup her investment--which is partially underwritten by the URA.

Existing property owners can draw on the equity from their buildings, renovate without subsidies and charge lower rents, Lynch said. What’s holding them back is the specter of eminent domain that has hung over their heads ever since the URA began acquiring large chunks of Downtown in the mid 1990s. Downtown is actually worse off than it was 10 years ago, Clark said, and he blames the Murphy administration and the URA. Many of the vacant buildings Downtown are owned by the URA.

“Our city has a socialist economy Downtown. We’ve bought property for the sake of ownership by the state,” Clark said.

Picker, on the other hand, dismisses critics of the URA as “ignorant” and said that many Downtown property owners are merely land speculators. To Picker, the Golden Triangle’s deterioration is evidence of the need for the URA to continue its efforts to find the right developers to spark Downtown’s rebirth.

URA Executive Director Mulu Birru, soon to be leaving Pittsburgh for a similar job in Detroit, said nothing is stopping current property owners from converting their buildings into apartments. In defending subsidies to developers like Picker, Birru said that acquisition and renovation costs are too high for residential development to yield a healthy profit without subsidies.

“If it could be done (without subsidies), it would have been done a long time ago,” he said.

Besides, the URA still is trying to find a developer to revamp the Fifth and Forbes commercial corridor. Birru said that housing isn’t always a necessary first ingredient to bring about commercial redevelopment. Sometimes the reverse occurs, and he points to the South Side as evidence.

John Norquist, whose book, “The Wealth of Cities: Revitalizing the Centers of American Life,” chronicled the decline and rebirth of cities during the 20th century, said that government-driven redevelopment projects historically have betrayed contempt for the urban form, with its diversity of building uses and architectural styles. Norquist, who was Milwaukee’s mayor from 1988 to 2003, devoted much of his energies to helping the city recover from failed redevelopment projects, like a downtown mall and a convention center “that dominated everything else around it.” During his tenure, the city added 4,600 housing units downtown, most without subsidies

The problem with subsidies is that they limit the pool of developers to those willing and able to exert political influence to get them. Subsidies also make the city look like a desperate suitor, said Norquist, who is now the president and CEO of the Congress for the New Urbanism.

“When somebody offers you a subsidy, you wonder what’s wrong,” he said.

One of the nation’s leading evangelists for urban living, Norquist insists that people will want to live in Downtown Pittsburgh--so long as there are plenty of choices. Lavishing the kind of praise on Pittsburgh that you can only hear from an outsider, Norquist generously refers to the city and its vistas as the “San Francisco of the Midwest.”

“I’m just struck by how beautiful the Downtown is, and one thing I think your mayor’s done that’s really good is all the bike trails down by the river,” Norquist said. “The problem is that Pittsburgh tries too hard. I think they need to relax and realize how beautiful the place is and not try so hard.”

To Clark, the question is not merely whether residential or commercial redevelopment will save Downtown, or whether or not government should subsidize redevelopment. It’s also whether Downtown needs to be redeveloped at all--or, at least, whether it did before the city got involved.

“When I moved here in 1993, one of the reasons I did was because it had a functional Downtown,” said Clark, who came to Pittsburgh from Washington, D.C. “It appealed to the people who worked down there, to the black community and the people who had to rely on public transit for shopping. What I’ve talked to people a lot about, I think there is a pretty quick fix. Take it back to the market that it used to serve. That market’s still there.”