Colin McNickle At Large

Open your eyes Pittsburgh

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The latest statistics regarding Pittsburgh’s anemic overall office occupancy rate should prompt public officials to stop, once and for all, taxpayer subsidies for new office space.

That that likely won’t happen indicates a serious public policy mistake.

As the Post-Gazette reports it, the Newmark real estate firm finds that Pittsburgh’s overall office vacancy rate climbed to nearly 21 percent (20.8 percent) in the fourth quarter of 2021.

That’s up by 1.5 percentage points from 19.3 percent at the end of 2020.

Additionally, available subleased office space rose to a record high of 2.2 million square feet at the end of 2021, the Newmark study found.

Covid-19, of course, is said to be to blame.

But the dirty little secret of the latest numbers remains that office vacancy rates – particularly Class A premium Downtown office vacancy rates –were climbing well before the Covid-19 pandemic hit in early 2020.

Yet even then, economic development officials continued to eagerly subsidize new office space. The most egregious example that comes to mind – but not the only — is the $10 million public subsidy to build the coming 26-story First National Bank headquarters on the tract that once also hosted the Pittsburgh Civic Arena.

But as the reporter Mark Belko observes in the same P-G story:

“If there is a trend, it’s that companies are more interested in reducing the amount of space they have than in increasing it.”

Indeed, Covid has changed the way many businesses operate and how many more people work. And the continuing pandemic now has forced more than a few analysts to proffer that anything resembling normalcy in the office occupancy rate might now have to wait until mid-2023.

If then, we must interject.

But, we must ask, is that “normalcy” for Pittsburgh’s office occupancy/vacancy situation what was found in the pre-pandemic malaise?  It very well could be, given the underlying state of things that don’t involve the pandemic at all.

If the city’s stubbornly anemic population numbers and lagging economic growth (compared to comparably sized jurisdictions and national rates) continues — coupled with a propensity for government to over-regulate, to over-tax and to over-lord just about everything in pursuit of a command economy — the answer to that question is a very sad “yes.”

Governing with eyes clamped shut, as has been the practice in Pittsburgh for decades, is not governing at all. And no one should expect different results with not only the proverbial blind leading the blind but the blind continually succeeding the blind.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).

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Colin McNickle
Colin McNickle

Colin received his B.G.S. from Ohio University. The 40-year journalism veteran joined the Institute in October 2016. That followed a 22-year career with the Pittsburgh Tribune-Review, 18 as director of editorial pages for Trib Total Media. Prior that, Colin had a long and varied career in media — from radio, newspapers and magazines, to United Press International and The Associated Press.

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