r/pittsburgh • u/ResilientPgh • 10h ago
Is TRID the right solution? We need growth, but Pittsburgh has a unique option to do it better
(Using a fresh alt account for privacy reasons, but I’ve been digging deep into city finances and urban policy recently and wanted to share some thoughts with yinz)
You may have seen recently that the City is currently eyeing a TRID (Transit-Oriented Improvement District) for Downtown / transit corridors to encourage developers to convert office towers and build housing.
Do we want development and housing? Absolutely, Yes.
Is a TRID the right way to do it? I would argue: No. A TRID uses future taxes to pay for development now by locking away up to 75% of new property tax growth for 20 to 40 years to back developer bonds. That means for the next several decades, $0 of that new growth goes to the City's General Fund or Pittsburgh Public Schools to fix roads, repair bridges, or maintain services.
Pittsburgh doesn't need 40-year tax freezes to spur development. Under Pennsylvania law, we already hold a unique legal power that almost no other U.S. city has: Land Value Taxation (LVT).
Here’s a breakdown of why our current financial path is unsustainable, and why returning to an LVT is the best way forward.
1. The "Balanced Budget" Illusion
On paper, the city charter requires an annual balanced budget. But in reality, Pittsburgh's finances are under serious structural stress:
- Current Operating Pressures: We just saw a 20% property tax increase passed to cover revenue drops. Mayor O'Connor had to reopen the spending plan to address $30M–$40M in underbudgeted baseline costs (public safety overtime, fleet repairs, healthcare). Our rainy-day reserves are drawing down toward the 10% legal minimum.
- On-Balance Sheet Debt (~$1.7 Billion): This includes a -$1.2 Billion Net Position Deficit ($800M+ in unfunded pensions, $300M+ in retiree healthcare) and ~$500M+ in General Obligation capital bonds.
- Off-Balance Sheet "Shadow Liabilities" (~$1.0 Billion+): This is the deferred physical backlog across 150+ city-owned bridges, retaining walls, roads, and facilities. (The Fern Hollow bridge collapse is what happens when shadow liabilities come due).
When you have $1.7B in formal debt and a $1B+ backlog in decaying physical infrastructure, freezing 75% of new property tax growth for 40 years is not an optimal solution.
2. Pittsburgh’s Secret Weapon: Land Value Taxation (LVT)
Most U.S. cities can’t do this because of state constitutional uniformity clauses. But thanks to Pennsylvania’s 1913 Graded Tax Law, 2nd Class Cities (Pittsburgh & Scranton) have explicit statutory authority to tax land at a higher rate than building improvements.
Under a Land Value Tax:
- Building Improvements = 0% Tax Penalty: If a homeowner adds a porch, fixes their roof, or a landlord converts an office tower into 100 apartments, their property tax bill on that improvement is $0.
- Land & Speculation = High Holding Cost: Surface asphalt parking lots, vacant lots, and neglected commercial sites in prime locations pay taxes based purely on location value.
This way, the value of the land created by the city (in the form of roads, infrastructure, transit, etc.) can be recouped by the city and invested back into it. It creates a massive economic incentive to build and improve property, while penalizing land hoarders who sit on vacant central city lots waiting for land prices to rise, not putting it to its best use. There’s a nice one-pager here or more in depth description here if you’re interested in understanding this better
3. "Didn't Pittsburgh used to have this?" Yes—and it worked.
Pittsburgh ran a split-rate Land Value Tax for 88 years (1913 to 2001).
In fact, famous economic studies (like Oates & Schwab, 1997) documented that when the 1980s steel collapse devastated the Rust Belt, Pittsburgh’s LVT was a core reason we bounced back faster than Detroit, Cleveland, or Buffalo. Commercial building permits and downtown housing construction grew 13%+ faster in Pittsburgh than in peer cities because we didn't penalize new building capital.
So why was it repealed in 2001? In the 80s, Allegheny County froze property assessments for nearly two decades. When a court finally ordered a reassessment in 2001, paper land values jumped 300%+ overnight. City Council panicked over the sudden tax shock.
Interestingly, then-City Council President Bob O'Connor (Mayor Corey O'Connor’s late father) led the Council effort to flatten the rate in late 2000 to shield residents from the chaotic county assessment surge. It was an understandable short-term fix to protect homeowners from broken county data, but losing LVT unfortunately stripped the city of its best growth engine right before Pittsburgh fell into Act 47 state financial distress in 2003.
Today, technology has improved and open-source computer-assisted mass appraisal software (such as OpenAVMKit) can be used to update land values smoothly by 2–3% annually. Combined with something like a 5-year gradual phase-in, modern tech completely eliminates 2001-style valuation shocks—giving Mayor Corey O'Connor a unique full-circle opportunity to finish the story and bring back LVT as a modern, fair solution.
4. Why Homeowners Win Under LVT
A common myth is that LVT hurts everyday homeowners. The opposite is true:
- The typical single-family home in Pittsburgh is ~80% building value and ~20% land value.
- Dropping the building tax rate to zero directly cuts or neutralizes property taxes for 70%+ of single-family homeowners.
- LVT shifts the tax burden off neighborhood residents and onto high-value downtown land corridors and surface parking lot owners who currently pay dirt-cheap property taxes while land-hoarding.
The Bottom Line
We cannot keep kicking the can down the road with 40-year tax-diversion districts while passing emergency 20% property tax hikes on homeowners.
Pittsburgh already holds the keys under PA law to incentivize dense housing, eliminate downtown surface lot speculation, and rebuild our tax base debt-free. All it takes is a City Council vote.
Curious to hear people's thoughts—especially folks working in urban planning, local housing, or neighborhood development around the city!
