There’s a telling paragraph in a recent Associated Press dispatch about cities, Pittsburgh included, “reviving” their downtowns by converting offices to housing:
“The conversion push is marked by an emphasis on affordability. Multiple cites are offering serious tax breaks for developers to incentivize office-to-housing conversions – provided that a certain percentage of apartments are offered at affordable below-market prices.”
Ah, when a non sequitur collides with an oxymoron.
“Affordability” for whom?
Certainly not for taxpayers, who are being forced – not asked, we note – to subsidize a policy that is, at best, quite speculative if not specious.
And certainly not for the majority of tenants, likely forced to pay above-market rates to pay for subsidized tenants given below-market rents.
The fact of the matter is – and as we’ve noted numerous times in recent months – such conversions hardly are cost-effective. But they’ve come to the forefront as city officials all over the United States desperately (and with great hubris) seek to employ market perversions to thwart this marketplace reality:
Downtown office space likely never will return to “the old normal,” not only because of permanently changed post-pandemic work habits and needs but because downtowns have become veritable cesspools.
No amount of wishful thinking, and certainly no amount of misguided public subsidies that surely will have unintended consequences, can change that reality.
In a localized insert to the AP story, the Post-Gazette adds:
“In January, Pittsburgh announced it was accepting proposals to produce more affordable housing through the ‘conversion of fallow and underutilized office space.’
“The following month, the Urban Redevelopment Authority began accepting applications from developers and others interested in converting office space into Downtown buildings and into apartments.”
And talk about yet another telling statement – call the below truth in malaprops – again from the local P-G insert in the AP story:
“We believe this program is an important step to reimagine parts of Downtown and reimagine buildings that are yawning for new investment and use,” Tom Link, the URA’s chief development officer, said at the time.”
“Yawning”? Bring on the next “renaissance”!
Cue the laugh track complete with loud chortles.
Even if Link meant to say “yearning,” we see no inanimate objects yearning for anything other than, as some urban observers have opined, to be demolished and their lots being repurposed for something the market seeks (and without public subsidies).
But the Freudian “yawning” is exactly right.
There’s no massive demand for Downtown housing in Pittsburgh. If there was, there would be no “need” for subsidies, now would there be?
About the only thing the millions of dollars about to be pumped into subsidizing office-to-apartment conversions will create will be same, old government interventionist pigs gussied up with another shade of taxpayer-funded lipstick.
Market perversion after market perversion has left Pittsburgh and other cities in a world of hurt. And nothing will change until Pittsburgh’s “leaders” stop deluding themselves into thinking they can command the economy to their whims while draining the public kitty.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
