Develop PGH Bulletins: Report Finds Most Banks Give Pittsburgh's Minority Neighborhoods Few Loans

Pittsburgh PA

13 September, 2021

5:52 PM

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By Rich Lord, Public Source September 9, 2021 Develop PGH Bulletins updates you on the Pittsburgh region's economy. Check back frequently, sign up for the Develop PGH newsletter and email [email protected] with questions, tips or story ideas. Pittsburgh Councilman Ricky Burgess, with Councilman Daniel Lavelle behind him, and flanked by a map showing the racially biased lending patterns of Pittsburgh's past, speaks at the unveiling of a report showing that most banks continue to fail to lend in the city's minority neighborhoods. (Photo by Rich Lord/PublicSource)9/9/21: Bank lending practices leave minority neighborhoods reliant on public dollarsFewer and smaller bank loans have flowed to Pittsburgh's minority neighborhoods than to its largely white neighborhoods, and public sector investment isn't enough to fill the gap, according to a report released by a coalition of neighborhood groups. Fewer and smaller bank loans have flowed to Pittsburgh's minority neighborhoods than to its largely white neighborhoods, and public sector investment isn't enough to fill the gap, according to a report released by a coalition of neighborhood groups. The 129-page report Inherited Inequality: The State of Financing for Affordable Housing in Pittsburgh, Pennsylvania, was completed by a team of researchers, including some from the University of Pittsburgh and Carnegie Mellon University. It looked at bank lending data and public investment documents for 2007 through 2019, gleaned from public and private sources. Key findings: More than 900 banks with transactions in the city made some 71,000 loans totaling $11.8 billion to borrowers within the City of Pittsburgh, but just 3.5% went to Black Pittsburghers.Just 6.8% of the bank loan dollars went to largely minority neighborhoods.While loans to white borrowers averaged $38,360, those to Black borrowers averaged just $5,888.Some $3.4 billion in public-sector housing investments skewed slightly toward minority neighborhoods, but that didn't come close to counterbalancing the disparity in bank lending.In mostly white neighborhoods, 92% of investment came from bank loans and the balance from public sources, but in minority communities more than half of investment came from government programs.Just three banks – Dollar Bank, PNC Bank and Wells Fargo Bank – topped $25 million in loans to Black Pittsburghers during the study period.The city and its authorities have invested vigorously in minority communities, said city Councilman Ricky Burgess, at a press conference in the City-County Building at which the report was unveiled. "As much as we've done, the private market has done little or nothing in those same communities," he said. Pittsburgh's status as "the worst place for African Americans in the United States," he said, is driven in large part by "greedy corporations and greedy financial institutions that are literally starving the African American community into death and destruction." Dan Holland, director of research for the Lower Marshall-Shadeland Development Initiative, talks about the failure of most banks to lend vigorously in Pittsburgh's minority neighborhoods, at a press conference at the City-County Building on Sept. 9, 2021. Pittsburgh Councilman Daniel Lavelle stands behind him. (Photo by Rich Lord/PublicSource)Shadyside got as much in loans as did all of the city's minority neighborhoods, said Dan Holland, a community reinvestment researcher who led the study. Why do most banks continue to fail to lend equitably? "It's not a matter of outright bigotry," said Gregory Spires, a professor of sociology and public at George Washington University, who helped to guide the report and appeared at the press conference. Leadership in the banking industry has publicly supported equitable lending, he said. But loan officers are overwhelmingly white, and they may be willing to overlook a flaw in the credit history of a white borrower that they would not overlook in a Black borrower, he said. On the neighborhood level, the report zoomed in on Marshall-Shadeland, a neighborhood with a slight Black majority. Just 22% of bank loans there went to Black residents. Absentee landlords, meanwhile, took ownership of more than half of properties in the neighborhood, the report found. The report was led by Parents Against Violence and the Lower Marshall-Shadeland Development Initiative, and its research team included Ralph Bangs, former associate director of the University of Pittsburgh Center on Race and Social Problems, and data analyst Randy S. Weinberg of Carnegie Mellon University. It is being transmitted to the Pittsburgh Black Elected Officials Coalition and to state and federal regulatory agencies. Among other recommendations, the report suggests that the city and related agencies should systematically deposit and invest their funds only in financial institutions that lend in minority neighborhoods. "The City of Pittsburgh is also complicit because we allow them to get away with it," said Councilman Daniel Lavelle. He said the city should adopt a rule that if a bank doesn't lend in minority communities "you no longer get a dime of our money." 9/9/21: Thick pile of public comments helped to shape deal on Skinny BuildingDeluged with public pleas to save Downtown's so-called Skinny Building, the Urban Redevelopment Authority voted to sell it to an arm of PNC Bank, with the condition that it be preserved. The URA bought the building near the corner of Forbes Avenue and Wood Street, and its neighboring Roberts Building, in 2013 for $1.3 million, and will now sell them to PNC for the same price. Just more than 5 feet wide and 80 feet long, the Skinny Building has been a Pittsburgh oddity for a century, and news of its impending sale to PNC drew some 50 people to write to the URA. According to URA board Chairman Sam Williamson, most of the letters had a simple message: Don't let anybody tear it down. Williamson said the URA bought the Skinny Building "specifically so it would be saved from the wrecking ball" at a time when it was in danger of demolition. "We all agree that the Skinny Building – and PNC believes that the Skinny Building – is an important piece of Pittsburgh's history," Williamson told the board. The public comments helped to shape the URA's deal with PNC, he said. That deal allows PNC to renovate the Roberts Building into flexible office space, and to run an art program and new business incubator space in the Skinny Building. But the URA and PNC will enter into a 99-year covenant to protect the facades and bar demolition, and preservationists will work with PNC to keep the spirit of the original design even as updates occur. The redevelopment is expected to cost PNC $6.1 million. The board voted 4-1 to approve the sale, with Jodi Hirsh dissenting because many community members were concerned about the transfer. 9/9/21: Uptown land sold for large, mixed developmentPittsburgh's Urban Redevelopment Authority will sell 1.4 acres of city-owned land around the intersection of Fifth Avenue and Dinwiddie Street in Uptown to a developer for construction of housing and commercial space. The URA board voted unanimously to sell the land for $2.4 million to Bridging the Gap Development, which plans development on both sides of Dinwiddie. The east side will be office space, while the west will become 171 apartments, of which 33 will be priced for households of modest income. The site includes a former city Department of Public Works location, which will house much of the 20,000 square feet of commercial space. The complete development is expected to cost $66.6 million. "We're excited about this project, what it's going to mean to the community, but really what it's going to mean to the entire city," Derrick Tillman, president and CEO of Bridging the Gap, told the board. He pledged that it will "redefine what it means to bring about comprehensive, equitable community development." 9/9/21: Trees could make way for duplexes in HazelwoodThe Urban Redevelopment Authority will try to negotiate the sale of 48 parcels of wooded, publicly owned land in Hazelwood to a developer interested in constructing housing, following a URA board vote approving the talks. Oak Moss Consulting LLC wants to build 62 duplexes – some market-rate, some affordable – on vacant land along Sylvan Avenue, Chatsworth Street, Chance Way, Monongahela Street and Berwick Street. North Shore-based Oak Moss drew public praise for consulting with community groups, though one resident told the URA board that the wooded properties should be maintained as greenspace. The parcels once held houses, which were demolished. A representative of Oak Moss told the board that some land around Sylvan would remain wooded, and that at least six of the units would be priced for households earning at or below 80% of the area median income. URA staff now has six months to negotiate exclusively with Oak Moss. URA board Chairman Sam Williamson said the agency should use that time to pound out a firm commitment on the inclusion of affordable units, and to help Oak Moss to connect with programs that could help area residents to work on the construction of the duplexes. 9/2/21: The public has until month's end to comment on affordable housing planThe City of Pittsburgh may allocate more deed transfer tax dollars to an affordable home purchasing program next year than this year, under a draft plan on which the public can soon comment. The Housing Opportunity Fund Advisory Board reviewed and discussed the draft allocation of the $10 million in city money that it expects to oversee next year. The HOFAB gets an annual share of the deed transfer tax, and the Urban Redevelopment Authority administers the programs it funds. The most notable proposed changes from this year's allocations: A $215,000 increase for the For-Sale Development Program, which helps developers and community groups to finance the construction or renovation of new houses to be sold to families with modest incomesA dip of nearly $1 million in new allocations to the Rental Gap Program, which aims to fill holes in the financing plans of apartment building developers – a program that this year got an extra $750,000 boost from a special infusion of funds from Pittsburgh City Council, and that remains flush with nearly $7 million in unallocated funds in its coffersInclusion of $425,000 for a new Small Landlord Fund that aims to help mom-and-pop landlords to make improvements to rental homesA drop of $550,000 in new allocations to the Legal Assistance Program, which was created to pay for lawyers to help people facing eviction, but which has a leftover balance of $800,000 from this year's allocation.HOFAB members argued for keeping the flexible Demonstration Dollars allocation, which can be spent on novel programs or redirected as needed. Some cited the recent U.S. Supreme Court decision nixing the Centers for Disease Control and Prevention's pandemic-related curbs on evictions. "It worries me that we're going to have this dam breaking and we're not going to be able to deal with that effectively," said board member Mark Masterson. Last month landlords filed 561 cases seeking to evict tenants in Allegheny County, the highest level since September, when previous restrictions briefly expired before the CDC stepped in. Eviction cases edge up in Allegheny CountyThe draft allocation plan was crafted by URA staff. The staff used results from a survey of 488 people, input from the Housing Opportunity Fund Advisory Board members and data on the available dollars and demand trends for each program. Staff expects to post the draft on the URA website in coming days, along with a form through which the public can submit feedback. The advisory board could vote on the plan Oct. 7, then send it to the URA board for its approval the following week. 9/1/21: Fee on deeds and mortgages to cover most of $3.2 million anti-blight packageAllegheny County will steer nearly $2 million raised through a new fee to 30 communities to fund the demolition of 100 derelict buildings. The round of funding is the first under an ordinance passed last year, which placed a $15 fee on the filing of deeds and mortgages, strictly to pay for demolition of blighted buildings. Getting the most buildings demolished under the program are McKeesport and Wilkinsburg, with 10 each, followed by the Steel Rivers Council of Governments (which serves 19 Mon Valley municipalities) with 8, Braddock with 7, and Brackenridge and Pittsburgh with 5 each. "I'm delighted to see that we were able to provide funding to these municipalities and support the demolition of 100 structures," said Allegheny County Executive Rich Fitzgerald, in a statement provided to PublicSource. He thanked County Councilman Bob Macey, of West Mifflin, who proposed the fee ordinance. The county in March invited municipalities and councils of government (COGs) to apply for the funds. It got 60 applications to demolish some 375 buildings at a cost of nearly $7.7 million — far more than the fee has brought in so far. "Not having seen the grant awards, my hope is that these dollars would be allocated in the places of need," said An Lewis, executive director of the Steel Rivers COG, who was a key advocate for the fee. "Those communities can't take care of these issues without support, period. They simply cannot." The $1,935,076 of deed-and-mortgage-fee revenue that the county will distribute amounts to 86% of the funds collected through the fee. The rest is available for emergency demolitions or the next round of funding. The county is, however, going to pay for 87 more demolitions in 15 other municipalities using $1.2 million from other funding sources. "There has been a tremendous need for blight remediation throughout the county, and this program has allowed us to support the work of our local municipalities and others to improve neighborhood conditions," said Lance Chimka, the county's development director, in the statement. The county gave preference to applications that targeted clusters of unsound buildings, especially those that present a safety hazard, are slated for redevelopment or are part of planning efforts. The county is also requiring that the contractors conducting the demolitions repeatedly wet down the structures to reduce the drift of any dust containing lead. The funded demolitions won't come close to addressing all of the blighted buildings in the county. "I think we have to have a larger conversation about what comes next," said Lewis. "We have got to get these buildings down, because they are so detrimental in every way — psychologically, physiologically and economically." August recap:News from the City Planning Commission, Urban Redevelopment Authority, Housing Authority of the City of Pittsburgh and more Dispute in Downtown's Gateway Towers divides condo residents 2020 Census: Pittsburgh's slight decline came with 'massive' demographic shifts in 2010s Hundreds of violations, few penalties: Allegheny County's health enforcers frequently inspected — but rarely fined — two McKeesport properties Develop PGH archivesFacing roaches, rodents, leaks and balky heat and fire alarm systems, fed-up tenants of PNC Bank's McKeesport complexes demand change PNC Bank pledges to address 'completely unacceptable' conditions as officials demand changes at its McKeesport properties Communal land and ownership — A conversation with Pittsburgh affordable housing advocates Soaring rents, waning options: For tenants on tight budgets, the North Hills isn't a friendly place July development coverage Rich Lord is PublicSource's economic development reporter. He can be reached at [email protected] or on Twitter @richelord. Develop PGH has been made possible with funding from The Heinz Endowments. This article was produced by PublicSource.org, a nonprofit news organization serving the Pittsburgh region. PublicSource tells stories for a better Pittsburgh. Sign up for their free email newsletters at publicsource.org/newsletters.