Pittsburgh controller urges URA to better use $10M affordable housing fund

Pittsburgh Controller Rachael Heisler is calling on the Urban Redevelopment Authority to more efficiently use a fund for affordable housing instead of leaving money unused.

Heisler’s recommendation follows an audit released Thursday by her office that showed that in 2022, the authority did not spend several hundred thousand dollars of the $10 million its housing opportunity fund receives each year.

She urged officials to reconsider how they use the money amid what many have called an affordable housing crisis.

“The key takeaway from our audit is that the URA is not fully utilizing all the money available through the housing opportunity fund,” Heisler said. “Specifically, the URA does not appear to be using [fund] money to build new housing in the most effective way possible, which should be one of our highest priorities.”

The fund was established in 2016 and financed through a 1% increase in the city’s deed transfer tax, with extra revenue from that tax hike absorbed into the city’s general fund.

Heisler found that the authority spent 94% of the fund money in 2022.

But that year was unusual in that it had an excess of money from additional sources including pandemic-related federal funds. The fund total in 2022 was $10.2 million, of which the authority spent $9.6 million.

The audit examined how the authority used the fund in 2022.

That year, the authority divvied up the money among seven affordable housing programs, a small landlord fund and the authority’s administrative costs, which totaled just over $1 million.

Some of the programs used more than their budgeted amounts, one used none of the $525,000 earmarked for it, and another spent only 3% of its $450,000 allocation.

Auditors recommended that the authority find more effective ways to spend the cash.

Heisler said that while the programs are helping the public, there remains a shortage of affordable housing in Pittsburgh, which was the driving factor for creating the fund.

The audit, Heisler said, “suggests that this funding is not solving that problem and expanding our affordable housing supply at the scale we need.”

The authority defended how it operates the fund, explaining in the rebuttal section of the audit that is “infeasible” to spend all the money in one fiscal year, in part because the city provides the funds in April or May, and Heisler’s audit was for 12 months.

The authority also called it “unreasonable” to pay out all of the funds in a single year because application and construction processes take time, and some projects don’t access the cash until the following year.