Like many cities, Pittsburgh finds itself in transition. At an event hosted by ULI, panelists highlighted the city’s interesting architecture, relatively affordable housing in walkable neighborhoods, and a strong outlook for the retail sector. Patrick L. Phillips, the global CEO for ULI and featured speaker at the event, said that Pittsburgh is a prime example of reinvention, a smaller market on an “upswing.”
“There is a big opportunity for smaller markets right now,” Phillips said. “Those markets are emerging now because of many factors, but one is that there are migration channels by millennials from bigger markets to these smaller markets. In many ways, a big part of that growth is Pittsburgh’s ability to offer safe neighborhood living at a very good price.”
Phillips pointed out that Pittsburgh is scoring quite high in several key areas in the PwC and ULI Emerging Trends in Real Estate® 2018 report. Pittsburgh ranks 63rd in the United States in population (about 305,000, according to the latest U.S. Census Bureau figures), but ranks as the 26th city in the study’s “U.S. Markets to Watch: Overall Real Estate Property Prospects” list. It also ranks second in the country in the study’s “U.S. Retail Property Buy/Hold/Sell Recommendations” (only behind Salt Lake City) and first in the multifamily category.
A video was also shown highlighting Pittburgh as a possible destination for Amazon’s HQ2:
“Pittsburgh is much more bullish than most markets,” Phillips said. “And what is interesting is that one of the highest-ranking areas in terms of importance and satisfaction in our survey of Pittsburgh business leaders was public/private partnerships. There is a very high rating on how well the city is doing with the use of both of these sectors to achieve some balance and success.”
Ray Gastil, the Pittsburgh city planning director, expressed those sentiments in the panel discussion. He said that rezoning of the city’s riverfront acreage, housing property redos in Pittsburgh’s 90 “walkable” neighborhoods, and development of high-tech innovation business areas near the city’s prime universities have depended largely on the joint leadership of the public and private sectors.
“What [the private sector] is doing is taking the lead on not just following trends, but making trends,” Gastil said. “I think both the political and business leadership has realized early on that we cannot move things forward quickly without them both adding their expertise and input together on how to figure much of the future planning out.”
One area where that “future” is in the process of developing is the transitional Oakland neighborhood, an older area just east of the downtown central business district and home to Carnegie Mellon University and the University of Pittsburgh. In addition to being home to many of the city’s stalwart museums, the area has also been big in the “meds and eds” market for some time, capitalizing on the university research and private foundation investment.
Sean Luther, executive director of InnovatePGH—a public/private partnership promoting growth in the business innovation industry (high tech plus many others)—said the city is moving forward in developing the “innovation hub” but needs to move further. He pointed out that the city is only at 60 percent of software employment expectations (based on college grads in that field), and is far behind in the amount of venture capital flowing in for investment.
“Our venture capital [investment] is far below what it should be,” he says. “But that can be changed. The strength we have is the strength that is created in our universities. We are far better there than in most other cities in this country. But we are not capitalizing on it enough yet.”
But Pittsburgh’s future is not without challenges. Changing U.S. immigration policy makes it difficult for innovation business companies to count on those foreign students who attend Pittsburgh universities to stay on in their field in Pittsburgh after graduation. The city also has an aging population, which means that the seven-county metro area had more deaths in 2015 (27,694) than births (24,027). That negative death/birth rate has been going on since 1995, according to the Pennsylvania Department of Health. That is good for more housing opening at a lower price, but bad for employers looking for high-tech expertise in businesses.
City planners are hoping to keep the population of Pittsburgh stabilized, and that can be a real positive for the housing market for sales profits. The forecast is that the city will add about 20,000 more residents over the next decade, a tendency that city planner Gastil said is “a capacity to handle more people, yet at the same time keep a uniqueness of neighborhoods that offer younger people an area to live where everything is with a short walk.”
Diamonte Walker, the Minority and Women Business Enterprise program officer for the Urban Redevelopment Authority of Pittsburgh, said this is what was the city’s key challenge, and falls into what she refers to as having less “leavers” and more “learners.” Walker said that having more younger people who stay depends on how Pittsburgh moves forward in what she termed “after equity.” “What we have found is that 80 percent of women and minorities see diversity as essential to Pittsburgh’s success, and I think we are moving forward on that in very real terms,” she said. “But it is essential to keeping the talented in this city.”
“In the recent decades, we have made race and gender population ‘empowered,’” said Walker. “But what we are moving toward is being ‘copowered.’ That is what equity is all about. That transition must be ubiquitous, ever present, and we see that happening.”