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Table of Contents

Vacant House Renovated In Observatory Hill Through NCST

First PCRG Developers Roundtable Recap

City Council Approves Crosstown Blvd Park

HUD Releases Evidence-Driven Publication on Regulatory Barriers to Affordable Housing

PCRG Travels to Washington, D.C. to Discuss Fintech and the CRA

Hey Pittsburgh: Let’s Talk about Environmental Justice



Vacant House Renovated In Observatory Hill Through NCST

Last modified on 2018-08-08 20:12:15 GMT. 0 comments. Top.

Before Rehab 3

Before Rehab

Like many neighborhoods in Pittsburgh, Observatory Hill, also known as Perry North, has seen significant decline over the past few decades. In recent years, Observatory Hill Incorporated, a local community group, has started to take action to address issues of blight and vacancy in their community. PCRG member Northside Leadership Conference has been working closely with Observatory Hill, Inc. to revitalize the heart of their neighborhood, through renovations of the business district on Perrysville Avenue and renovations of houses on Bonvue Street, a residential area nearby. OHI. recently completed Phase I of the Bonvue Street Revitalization Project, and working on the Perrysville Avenue business district and Phase II of the Bonvue Street Revitalization Project.  The goal of the project is to acquire “abandoned and blighted properties in an effort to stabilize the area, to attract new businesses, and to provide affordable homeownership opportunities to those with even a modest income.”

After Rehab

After Rehab

PCRG’s partnership with the National Community Stabilization Trust makes foreclosed properties available for purchase at a discount to our member organizations and their partners. When staff saw a property in Observatory Hill become available through the program, PCRG contacted NSLC who connected us with the OHI Board of Directors. The board realized that the property was in their area of focus – on Perrysville Avenue, only a few blocks from the business district, close to their own renovation projects on Bonvue STreet. Both the OHI Board and NSLC requested that PCRG work with a neighborhood resident, William Oberst, to ensure the property was redeveloped.

Before Inter 7

Before Rehab

William Oberst is a resident of Observatory Hill who has renovated at about eight houses in the area, of which four have been located on Perrysville Avenue. The house needed a complete rehab, including a new roof, new plumbing, new electrical, and a completely rehabilitated interior, including new floors, drywall, and more. The house was also converted from a duplex into a single-family home.  “Renovating the houses has been a passion of mine, and a win-win for the community,” Oberst said.  With the completion of the house, Perrysville Avenue gains another beautiful property, neighbors’ property values will increase, and one more vacant house will be inhabited again.

post interior 1

After Rehab

PCRG works with financial institutions to connect our members to opportunities to purchase houses in their neighborhoods. Those homes will be renovated and then leased or sold to qualifying individuals. If you’re interested in participating in our program, please contact Justin Belton at jbelton@pcrg.org or call the PCRG office at 412-391-6732.

 

 

 

 

 

 

 

 

 

 

 

 



First PCRG Developers Roundtable Recap

Last modified on 2018-07-26 15:48:36 GMT. 0 comments. Top.

PCRG held its first Developers’ Roundtable on June 29th, 2018, with the purpose of understanding affordable housing developers’ concerns related to utilizing the Low-Income Housing Tax Credit (LIHTC). The Roundtable took place at PCRG and consisted of numerous developers from the Pittsburgh area, as well as a call-in from an outside developer. The purpose of the meeting was to determine the inefficiencies in utilizing the 4% LIHTC, which is a non-competitive tax credit that is allocated to investors when affordable housing is financed by federal government issued tax-exempt bonds.

The LIHTC program is used to leverage private capital to finance construction and rehabilitation of affordable housing. Since its inception in 1986, the LIHTC program has built of 3 million affordable housing homes and leveraged over 100 billion dollars in private capital for quality affordable housing. Experts consider the LIHTC program to be the most successful affordable housing production and rehabilitation program in U.S. history. The tax credits are either allocated as 9% or 4% credits. The 9% credits are used exclusively for construction of new affordable housing, while the 4% credit is used for rehabilitation and construction. The 4% LIHTC is an important tool in the rehabilitation of Pennsylvania’s ageing housing stock and construction of new affordable housing. However, according to the Pittsburgh Affordable Housing Task Force, the 4% credit is highly underutilized in Pittsburgh.

The 4% LIHTC is allocated by the Pennsylvania Housing Finance Agency (PHFA). The PHFA is tasked with, among other things, allocating the 4% and 9% LIHTC. The PHFA recently posted their draft Qualified Action Plan (QAP) for 2019-2020. The QAP explains the requirements and grading criteria for dispersing the 9% and 4% credits. Using the recommendations from the Roundtable, PCRG drafted a public comment to the proposed regulation. Among the topics covered were streamlining the 4% underwriting process, local administration of the tax credits, income averaging and Transit-Oriented Design (TOD). A copy of the comment is attached below. PCRG is excited to continue working with local developers to advocate for progressive and efficient building strategies/regulations to increase affordable housing building yield in Pittsburgh.

 

July 9, 2018

 

Pennsylvania Housing Finance Agency
PO Box 8029
Harrisburg, Pennsylvania 17105-8029

 

RE: Comment on Draft 2019 – 2020 PHFA QAP

 

The Pittsburgh Community Reinvestment Group (PCRG) is a coalition of over 60 community/economic development corporations and community/neighborhood based organizations, which are located in western Pennsylvania, the City of Pittsburgh and in urban-core communities in Allegheny County.

 

PCRG’s leadership seeks to develop tools and resources for residents that create communities of choice where all are welcome, where there is quality affordable housing, convenient/regular transit service, and access to capital that can be used to drive wealth development.

 

After a review of the QAP for 2019-2020, we offer the following suggestions to help grow Pennsylvania’s affordable housing inventory. There is a focus on Allegheny County, with the understanding that over two-thirds of the urban allocation of 9% tax credits are being allocated to Philadelphia.

 

The 4% low income housing tax credit is an important tool in the rehabilitation of Pennsylvania’s ageing housing stock and construction of new affordable housing. According to the Pittsburgh Affordable Housing Task Force, the 4% credit is highly underutilized. PCRG’s following recommendations regard formulating more efficient ways to underwrite and review the 4% tax credit. The following also addresses PCRG’s support for the proposed income-averaging rule change and implementing language in the 2018 QAP that incentivizes combining 4% and 9% tax-credits to leverage project funding.

 

  • Streamline the current 4% tax credit process by creating separate underwriting criteria for 4% credits: The current tax-exempt bond financing system is constraining the use of 4% credits. The current 4% credit underwriting in Pennsylvania requires substantially the same underwriting process as the 9% credit, when the 9% credit supplies more than twice as many credits to investors. Other states treat 4% and 9% credits differently during the underwriting and application process. Ohio is a good example of one of these states. Ohio requires almost all 4% underwriting documents to be submitted on the submission date, while 9% underwriting documents are often due at different times, requiring certain documents to be submitted with the proposal and others during the final submission. This often leads to 9% credit applicants having to resubmit certain documents at time of proposal and final submission, which 4% credits do not have to do. The Ohio HFA also does not score 4% credit applications like they score competitive 9% credits. The 4% credit application simply requires that all applications meet certain threshold criteria, making the process simpler and easier to navigate. Ohio treats development costs and developer fees differently as well, which in turn incentivizes the use of the credit. For example, Ohio does not place a total development cost limit on their 4% credits, only stating that the OHFA “reserves the right to reject any application it deems excessively costly.” It also does not place a cap on developer fees for 4% credits, stating that developer fees can be 25% of the eligible basis, though excess of 20% must be deferred or reinvested (pages from the QAP are attached herewith). Kentucky is another state with a higher developer fee cap, allowing for a maximum 20% developer fee for 4% credit transactions. Finally, the Ohio HFA allows for 4% applications to be accepted on a quarterly basis, instead of the once a year application. This allows for continuous allocation of credits over the course of the year, which increases building yield and incentivizes the continued use of the credit. Washington DC also has a yearlong rolling application date. PCRG believes that Pennsylvania should follow Ohio, Kentucky and DC’s lead in allowing for certain 4% credit underwriting that is less stringent than 9% underwriting. This will encourage developers to undertake projects with the 4% credit and increase overall building yield.

 

  • Allocate authority to local Redevelopment Authorities to review/approve 4% tax credit applications: Currently, 4% credit applications are reviewed by the state PHFA as part of the open application period, once a year. This leads to a backlog of tax-exempt bond applications that qualify for 4% tax credit consideration. We recommend that the state PHFA allocates authority to review these non-competitive applications to qualified local redevelopment authorities that have the capacity to conduct the review. This will decentralize the process in multiple areas of the state, while decreasing 4% application decision wait-times. States such as Maryland and Minnesota allow for review of 4% tax credit deals by local authorities while Massachusetts’ HFA works closely with two local quasi-governmental agencies to allocate their tax-exempt volume cap. PCRG understands that certain PHFA offices in Pennsylvania do not have the capacity to review these applications. However, local redevelopment authorities do. PCRG believes that decentralizing the process will allow for an open application cycle, while increasing productivity and efficiency. This will also allow applicants to create more units over the course of the year.

 

  • Consider including language in QAP regarding combining 9% and 4% tax credits to increase funding: PCRG urges the PHFA to consider including language in its 2019-2020 QAP regarding combining 9% and 4% tax credits for financing, also known as “twinning.” Twinning is currently being used in states such as Virginia to close financing gaps in projects with higher unit counts, and Washington DC and Maryland are just now considering projects with this financing. It is also allowed for/encouraged in a number of other states, including California, Colorado Connecticut, Massachusetts, Minnesota, Rhode Island, Tennessee, Texas and Washington (other states do not necessarily prohibit it). Virginia, in particular, encourages combined financing by assigning additional points to applications for mixed tax credit projects. Specifically, more points are allocated for projects financed by tax-exempt bonds, based on what percentage of total units are financed by the bonds. For example, projects where >50% of units that are financed by tax-exempt bonds receive more points than developments where >30% of units are financed by tax-exempt bonds. We believe that this system can be used to incentivize using 4% bonds and allows for more creative financing structures, specifically in larger unit developments that would not be economically feasible using only 9% credits. Other states’ use of twinning has shown that these transactions can be complicated and are not necessarily appropriate in every 9% credit deal. However, we believe that twinning language should be considered in the QAP and utilized in specific cases to leverage more funding to allow for higher unit counts.

 

  • Income Averaging (Pg. 19):  PCRG supports the PHFA’s decision to include income averaging as a third-minimum set-aside election in the 2018 QAP draft. The Consolidated Appropriations Act of 2018, which created the income averaging election, does not require states to offer this third set-aside option. However, income averaging will allow for more units between 60% – 80% AMI, while at the same time increasing the economic feasibility of creating deeply affordable units, which are in high demand. This will also allow for a greater diversity of tenants at different income levels in tax credit properties. There have been some concerns among finance experts that a new set-aside option will require additional oversight and lead to compliance missteps. PCRG understands these concerns but believes that the benefits of income averaging far outweigh the potential risks. Income averaging allows for more creative financing structures than the rigid minimum set-aside elections (20-50, 40-60) and can be used to finance projects that previously would not be economically feasible.

 

  • Transit-Oriented Design “TOD” – The Agency currently may award two (2) points to developments located within one-half mile of a completed or planned public transportation fixed route stop.  PCRG strongly supports and encourages the agency to further reinforce Transit enriched sites. Most low income and working class individuals/families rely on readily available transportation for access to their work, public services, and education centers. Transportation is therefore vital to residents’ independence. PCRG suggests that the site rating area of the QAP be further weighted. In the past, PCRG has seen Pittsburgh projects awarded credits that are located in low transit corridors that isolate the tenants that need it most.

 

We hope that the suggestions provided help the 2019 QAP become stronger in advancing true housing affordability- through changes to the 4% tax credit system, income averaging and transportation.  Thank you for your consideration and please do not hesitate to contact us with any further questions or information.

 

Respectfully submitted,

Ernest E Hogan

Executive Director, PCRG



City Council Approves Crosstown Blvd Park

Last modified on 2018-07-27 14:56:50 GMT. 0 comments. Top.

City Council has unanimously approved a plan that Mayor Bill Peduto says “will help heal one of Pittsburgh’s worst efforts at urban renewal, when decades ago city planners separated the Hill District from Downtown and cut the lifeblood from one of our most historic communities.” More than $26M has been earmarked for an ambitious plan to build a park, install public art, and improve pedestrian access over three acres between downtown and the Lower Hill. Also included in the plan is an improvement to storm water management infrastructure. The park would be placed in one of the most nerve-wracking intersections in the city – for pedestrians, drivers, and bikers alike – at the Washington Place and Centre Avenue intersection of the Crosstown Boulevard.

Screen Shot 2018-07-03 at 12_11_11 PM

This decision coincides with a plan from the Pittsburgh Penguins to spend $450M to create residential, retail, and office space in the former Civic Arena site – in the wake of increased calls for more affordable housing in Pittsburgh. Whether or not the Penguins will move ahead with the affordable housing aspect of this plan is yet to be seen as the Penguins were not selected to receive a Low Income Housing Tax Credit (LIHTC) for the project. Of the planned 935 units, 20% were to be affordable, but this was contingent on receiving 9 tax credits. The mayor’s Chief of Staff, Dan Gilman, says that despite this setback, the city and the  Penguins are committed to building affordable housing.

Funds for the Crosstown Boulevard plan have been collected from a number of sources:

  • $19M [federal TIGER grant - Public]
  • $4.4M in state funding [$3.4M in Redevelopment Assistance Capital Program funds and $1M from PennDOT - Public]
  • $1M [from Richard King Mellon Foundation - Private]
  • $900,000 [from the Pittsburgh Penguins - Private]
  • $750,000 [from Hillman Foundation  – Private]
  • $390,000 [from the Sports & Exhibition Authority and Urban Redevelopment Authority of Pittsburgh - Public]

 

In total, $26,440,000 in funds has been set aside for a plan that won’t begin construction until early 2019, following a public bid for the construction contract, according to the Sports & Exhibition Authority (SEA). With an estimated 27 months of construction, the park would not be open to the public until March or April of 2021 at the earliest.

Last year, Marimba Milliones of Hill Community Economic Development Corporation stated that the plan for the intersection is “essential to pursuing goals laid out in a Lower Hill redevelopment plan created in 2014 by her organization, Hill District residents, the Penguins and others.” Those goals include empowering minority and women owned business, honoring the cultural legacy of the Hill District, and creating work for the Hill’s residents.

These goals are more than appropriate given the history of demolition and decay in the Hill District. In the late 1950s, the Urban Redevelopment Authority purchased and razed properties in the Lower Hill to make room for the Civic Arena, an event space built to host the Pittsburgh Civic Light Opera, and later the Pittsburgh Penguins. Constructed in 1961 and demolished between 2011 and 2012, the Civic Arena was the catalyst for forced relocation for much of the city’s black population into areas like Homewood and East Liberty — with its own history of gentrification and displacement, while poor whites moved to areas in the South Hills like Beechwood and Dormont. Citing degraded and unlivable conditions, the URA paid property owners “fair to generous amounts” based on assessed values for homes, apartments, and businesses to “[make] a mighty stride toward Oakland,” according to a report from Mayor David L. Lawrence who also mentioned “the social desirability of complete clearance [of the Lower Hill]” in the same report to City Council. George E. Evans, a City Councilman said of the Lower Hill,

“The Hill District of Pittsburgh is probably one of the most outstanding examples in Pittsburgh of neighborhood deterioration… There are 7,000 separate property owners; more than 10,000 dwelling units and in all more than 10,000 buildings. Approximately 90 per cent of the buildings in the area are sub-standard and have long outlived their usefulness, and so there would be no social loss if they were all destroyed.”

lower hill

Using the Pittsburgh Historic maps tool, one can see the progression of the Lower Hill from 1957 to 1967 to the present day. From a small but bustling neighborhood filled with small businesses and family homes to a space dominated by a single white sphere to a vast parking lot in the span of 54 years, the Lower Hill has seen massive change. Part of that change has been the economic decline that ravaged the Hill following the turn of the century. It would be unfair, of course, to say that the Civic Arena brought the economic decline to the Hill, but the demolition of hundreds of homes and business certainly encouraged the decay. More than 8,000 people and 400 businesses were displaced for the promise of reinvestment.  Promises of a cultural hub and “urban renewal” came with plans for opera house and symphony hall, multiple arenas, theaters, an art museum, luxury apartments, hotels and offices that were never completed. Further division came with the construction of the Crosstown Boulevard/I-579. Former residents of the Lower Hill cited the loss of landmarks like St. Peter’s Church, banks, and Victorian era homes as particularly heartbreaking because they represented social and historical capital.

civic arena

The current plans for the park and the former site of the Civic Arena stir up mixed feelings with terms like “cultural hub” and “renewal.” Suspicion and skepticism, building for more than 50 years, follows the URA. In 2002, Sala Udin, a City Council members stated, “When you look at [the URA's] specific behavior in this project, it has been sterling,” regarding the URA’s efforts to purchase vacant and abandoned properties in the Hill in an effort to build a cultural throughway. When asked about the same project, Hill House director James Henry said, “Instead of working with us, we felt that we were shown little or no consideration considering the role we played and have played in our community over 30 years.”

With the scars on the Hill still healing, it should come as no surprise that Pittsburgh residents, spefically those in the Hill, are hesitant. There are decades of generational trauma – borne of families and institutions being uprooted for unfulfilled promises – to wade through. However, it is the hope of many that this cap park, in concert with the Penguins’ plan to restore the former Civic Arena site, will begin a process to restore the Hill District and undo the decades of damage caused to a neighborhood and a city.



HUD Releases Evidence-Driven Publication on Regulatory Barriers to Affordable Housing

Last modified on 2018-07-27 14:03:36 GMT. 0 comments. Top.

The Department of Housing and Urban Development’s quarterly newsletter Evidence Matters recently released an entire issue dedicated to regulatory barriers to affordable housing. In just over 20 pages, HUD researchers put forth a compelling argument that well-intentioned zoning law place the value of community aesthetics and preferences over livability for LMI renters and homeowners. In high-cost cities and and in Pittsburgh’s high-cost neighborhoods, the effect is multiplied. This will not be news to many of our readers, but it is heartening that HUD, even under the aegis of Secretary Carson, recognizes the detrimental impact of slow permitting, density restrictions, minimum lot sizes, and more.

 em-spring-18-1

Evidence Matters concludes that, given the evidence available, “regulation appears to raise home prices, reduce construction, and reduce the elasticity of the housing supply….” They note that construction costs have stayed relatively flat and in pace with inflation over the last several decades, but housing and rental prices have not, rising faster than inflation (and certainly people’s wages). This would indicate that it is land prices, not the labor and materials put into a dwelling, that drive up costs. When further restrictions are put on costly land, e.g. parking minimums and density maximums, the supply dwindles further due to a reduction in total potential units.

 

The report separates land use and zoning regulations into essentially two streams – regulations that slow the housing pipeline and those that constrain supply and increase land prices. It is a fairly measured overview of the potential downsides of regulation, focusing primarily on exclusionary zoning practices, but also drawing attention to the cost of historical preservation, environmental regulation, and community input processes. Examples of regulation that increase the cost of creating or rehabilitating housing include:

 

  • Complex and expensive permitting and and review processes
  • Environmental regulation/remediation
  • Review and approval requirements for multifamily developments that are not required of single family homes and duplexes
  • Historical preservation review
  • Community forums and input
  • Urban growth boundaries

 

Examples of regulations that drive up the cost of land and reduce the supply include:

  • Density requirements that limit how many units can be built in a given lot
  • Minimum lot sizes. These are very common and exist in many of Allegheny County’s municipalities, including Pittsburgh.
  • Height limits
  • Parking minimums
  • Set backs and side yards
  • Prohibition of multifamily housing
  • Prohibition of accessory dwelling units
  • Prohibition of manufactured housing
  • Impact fees

 

Policy done well should balance public cost and benefit with equity, but what we can see in the history of housing regulation is that the cost ends up being borne disproportionately by those with the least to give. Some regulatory barriers, such as historical preservation and community approval, come with a cost that is far outweighed by its benefit. Others, such as parking minimums, are an outdated and expensive barrier to the creation of more supply. If you’d like to see more from Evidence Matters, you can find all their past issues here.



PCRG Travels to Washington, D.C. to Discuss Fintech & the CRA

Last modified on 2018-07-27 12:18:22 GMT. 0 comments. Top.

IMG_1848

 

PCRG’s Executive Director, Ernie Hogan, travelled to Washington this month as part of an NCRC board delegation. This group of met with Federal Reserve Chairman, Jerome H. Powell and Federal Reserve Board Governor, Randal K. Quarles, Vice Chairman for Supervision. During this meeting, PCRG spoke of the importance of expanding assessment areas in the cases of non-traditional banks and fintechs, as these institutions grow in size and lending capacity in local markets. PCRG also noted the important of “brick & mortar” branches. Pennsylvania has seen a disturbingly high level of consolidation and closures of branch offices in the last few years. PCRG also cited Federal Reserve Board Governor Lael Brainard’s speech “Keeping Community at the Heart of Community Development” at the Association of Neighborhood and Housing Development’s Eighth Annual Community Development ConferenceBuild. Community. Power. in New York City. Brainard was quoted as saying:

“That one powerful insight–the importance of investment in communities–lies at the heart of the Community Reinvestment Act (CRA). The CRA is one of the principal tools the Congress has provided for improving investment and development in lower-income communities. Implementing this law effectively is one of the important responsibilities of the banking agencies in promoting strong outcomes locally that reverberate nationally.”

Keeping this in mind, it is clear that it is essential to update assessment areas to reflect the current digital age – we must include non-traditional lending institutions and technological advances when evaluating CRA activities. Regulators should be given broader assessment reach to ensure accurate reporting. On the other side of the coin, we must not lose focus on physical place and the branch system. Branches are still crucial aspect of bank lending, investments, and financial services.

In this modern era, technology makes banking possible for every strata of society. The relative ease of access and affordability of technology provides unparalled access to banking and its benefits. In Pittsburgh, for example, there are a number of national banks providing services to our local markets, delivering mortgage lending and other key services, and capturing up to 10% of the market – with no obligation to reinvesting in our communities under the CRA. It is our hope, as the Federal Reserve seeks comment on the CRA, that they will strongly consider the recommendations put forth by PCRG, as well as those comments submitted from the entirety of the community development and banking sectors.

 

Definitions:

Fintechscomputer programs and other technology used to support or enable banking and financial services.

 

Reading list

  1. CRA campaign website (set up and launched by NCRC today): https://ncrc.org/treasureCRA/
  2. Sign on letter led by NCRC from 500 national and local civil rights, consumer and labor groups: https://ncrc.org/sign-on-letter-regarding-cra-regulatory-reform/
  3. NCRC statement of principles on CRA regulatory reform: https://ncrc.org/principles-for-cra-regulatory-reform/
  4. NCRC analysis of recent bulletin codifying the steps OCC is already taking as a kind of “sneak reform”: https://ncrc.org/ncrc-analysis-of-occ-bulletin-2018-17/
  5. Various regulatory/agency views on CRA
    1. Treasury memorandum on CRA: https://home.treasury.gov/sites/default/files/2018-04/4-3-18%20CRA%20memo.pdf NCRC analysis: https://ncrc.org/ncrc-analysis-of-cra-treasury-report/
  6. Warren letter to Otting: https://www.documentcloud.org/documents/4445979-2018-04-24-Letter-to-OCC-on-Housing-Enforcement.html


Hey Pittsburgh: Let’s Talk about Environmental Justice

Last modified on 2018-07-27 14:04:30 GMT. 0 comments. Top.

 

fig1In southwestern Pennsylvania, long-time residents are familiar with outsider’s stigmas about how Pittsburgh continues to cling to its dirty, industrial legacy, with smokestacks ejecting clouds of billowing, toxic chemicals for miles and miles on the City’s riverfront and lingering smog tinting the air. For those of us not originally from Pittsburgh, like myself, it’s difficult to get people who have never visited the city to re-imagine the city and reform their idea of what Pittsburgh looks like today. Sure, it’s frustrating to continuously explain to people that Pittsburgh isn’t like it once was but is expected considering Pittsburgh’s history is deeply entwined with industrial and commercial development, including some of the most notorious industrialists like Andrew Carnegie, Henry Clay Frick, Andrew Mellon and George Westinghouse.

At the turn of the 20th century, Pittsburgh’s smoky pollution and toxic air was seen as a sign of prosperity and evidence of a thriving local economy. Today, Pittsburghers spend time lamenting on the city’s past and the impact of deindustrialization on Pittsburgh and surrounding municipalities. Gone are the days of breathing toxic air and wading in the rivers despite the presence of sludge and chemicals – but has Pittsburgh truly separated itself from the past industrial practices and lax environmental standards?

fig2

 Figure 2: In 2018, visitors and residents can see Pittsburgh’s skyline clearly, but that doesn’t

mean air quality issues have disappeared.

Clairton Coke Works Fined…Yet Again

Between 2009 and 2016, U.S. Steel paid fines to the Allegheny County Health Department totaling close to $4 million. The production of coke continues to be one of the dirtiest jobs in the steel industry and Clairton happens to have the largest coke plant in North America operating 10 batteries of ovens and producing about 4.3 million tons of coke annually [1]. Not only is U.S. Steel’s Clairton Coke Works the largest coke plant on the continent, but its environmental compliance track record should be unsettling to residents in Clairton and surrounding communities: data provided by PennFuture estimates that the facility committed more than 6,700 air pollution violations in a three and half year period [2] and Clairton Coke Works is classified as a Title V source with other major local and national polluters established by the federal Clean Air Act. Poor air quality, particularly resulting from the increased presence of particulate matter 2.5 and ozone, have been linked with adverse health effects including being at a higher risk of cancer, heart disease, nervous system damage, and breathing problems. Allegheny County continues to be classified as a nonattainment area – a geographic area that is unable to comply with the federal air emission standards – for ozone, particulate matter 2.5, sulfur dioxide, and carbon monoxide[1].

 

In Pennsylvania, the County Health Department is the local agency responsible for overseeing facility compliance, air quality monitoring, and enforcing the Clean Air Act. To enforce the Clean Air Act locally, the Allegheny County Health Department established an air quality program – which has been in existence for 26 years – including the Clean Air Fund that companies pay into when they violate their air permits. Over the last few decades, funds from the Clean Air Fund have been used for a variety of improvement projects to benefit Allegheny County communities, including a study of diesel fumes Downtown ($860,000 in 2011) and solar panels at CCAC ($400,000 in 2015). Currently, Allegheny County has around $11.8 million in the Clean Air Fund and on average, the fund accrues an additional $1.3 million annually. At this time, the Allegheny County Health Department is advocating using these funds towards renovating one of their offices’, but environmental advocacy organizations, including Group Against Smog and Pollution (GASP), are not in agreement on how these funds should be used since it’s questionable how this benefits residents and communities.

 

In February, an audit conducted by the EPA found that the Allegheny County Health Department was behind on 13 out of 32 permits for Title V pollutions sources, with 10 permits already being expired and past their year-and-a-half review period, and three never even being issued to companies. If the agency responsible for air quality monitoring and oversight is falling behind on their permitting duties and not holding polluters accountable, where does that leave residents?

 

Changing the Environmental Justice Standards, to what end?

After conducting a nine-stop listening tour in 2017, the state Department of Environmental Protection recently announced that for the first time since 2004, policy changes would be made to Environmental Justice standards increasing the number of people, to around 1/3 of Pennsylvania’s total population, who are considered to live in an environmental justice area.

 

2004 Environmental Justice Area Standard vs. 2018 Updated Standard

Geographic Standard Used

Socio-Demographic Qualifying Conditions

2004 Environmental Justice Area Standard

Census Tracts

  • 20 percent or more of the population lives in poverty and/or
  • 30 percent or more of the population identify as a minority

2018 Environmental Justice Area Standard

Census Block Groups

  • 20 percent or more of the greater population at or below the poverty level or
  • 30 percent or greater minority population

Poor and minority communities often face the worst environmental conditions as a result of nearby industrial development facilities – including landfills, incinerators, coal mines, and coke works – notorious for polluting, but mostly because they lack the financial resources necessary to battle these cases in court. Without effective communication, education, information, and engagement with marginalized people, the updated Environmental Justice policy won’t make enough of a dent on its own.

Ultimately, developing, updating, and enforcing an environmental justice policy in Pennsylvania is positive, but there are a lot more subtle intricacies influencing how it functions that were not updated. During the DEP’s statewide listening tour about Environmental Justice issues last year, dozens of requests were made for additional oversight of the Marcellus Shale industry and despite these requests oil and gas well permits were not added to the list of environmental justice trigger permits due to time frame issues. In the City of Pittsburgh, fracking is not legally permitted but there are a number of well sites in Allegheny County and other surrounding counties in Pittsburgh’s metropolitan area.

 fig 3

Figure3 & 4: Top Ten Polluters in Allegheny County shown on the left, PennEnvironment [4] (includes Cheswick Power Plant owned by NRG Energy, Clairton Coke Works owned by U.S. Steel, Harsco Metals, and BPI Inc. – McKees Rocks PA Plant). On the right, FracTracker uses an interactive tool to show current Environmental Justice areas (2015 definitions) and surrounding well sites.

With the state DEP and Allegheny County Health Department both making commitments to modernizing policies and changing up status quo practices, this is a huge opportunity for southwestern Pennsylvania to step up and set an example for other cities facing similar environmental challenges. It isn’t a coincidence that more than half of the top ten polluters in Allegheny County fall into currently designated Environmental Justice areas, but a strong will to enforce policies, both at the local and state level, is very much needed to hold these companies accountable.

 


Sources:

[1]: http://www.post-gazette.com/news/environment/2018/06/28/Health-department-fines-U-S-Steel-Clairton-Coke-Works-1-million-environmental-compliance/stories/201806280180

[2]: https://www.nextpittsburgh.com/environment/clairton-coke-works-fined-1-million-for-violations/

[3]: https://www.publicsource.org/a-clash-over-how-allegheny-county-should-spend-millions-collected-from-the-regions-polluters/

[4]: http://toxicten.org/

[5]: https://www.fractracker.org/2017/04/pa-dep-environmental-justice-listening-tour/

 


[1] Allegheny County is listed as being a partial non-attainment zone for sulfur dioxide and carbon monoxide according to the state DEP’s “Attainment Status by Principal Pollutants:” https://www.dep.pa.gov/Business/Air/BAQ/Regulations/Pages/Attainment-Status.aspx


For more information on this newsletter, please contact Adrie Fells, AmeriCorps Outreach VISTA, at afells@pcrg.org or (412) 391-6732 ext. 211.

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Adrie Fells

Adrie is a Central PA native and a diehard Steelers fan. She finished a degree in Social Sciences with a concentration in Communications and moved to South Florida. After finishing a service year with City Year Miami, she decided to return to a city she loves. She is enrolled at Duquesne University and hopes to finish in 2020. When she's not watching the Steelers, Pirates, or Penguins play, you can find Adrie buried in a book or enjoying the views the city has to offer.
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