Writer: Joshua Andino
2 min read May 2023 – The City of Pittsburgh has capped its new zoning fees to $40,000 in a compromise with developers.
Walking back an earlier policy change in how city zoning fees would be collected, the city of Pittsburgh is limiting the increase in fees that developers must pay to develop their projects to $40,000. The move was initially a result of the city attempting to recoup revenue shortfalls and maintain city planning department operations that had the potential to jeopardize relations between the city and its developers.
“This new fee schedule is more equitable and makes sure that the city is able to cover the basic costs of running the program,” said Mayor Ed Gainey in the press release. “The previous fee schedule left the city with a $1.4 million shortfall and left us unable to meet the needs of our residents.”
The initial increase in payments was driven by a policy change that would have shifted away from a prior flat-fee model to percentage-based, with residential projects required to pay 0.1% fee of the project value and 0.3% for commercial projects. The change threatened to make Pittsburgh “the most expensive city in the country to do business in,” according to a NAIOP Pittsburgh whitepaper, as cited by Pittsburgh Post-Gazette.
The city’s latest move now caps the potential payment developers will be forced to make after a closed-door meeting from local and commercial real estate developers and Mayor Ed Gainey’s administration.
The meeting was productive, with the press release including several statements of support and thanks from numerous leaders involved in the region’s real estate and construction industries, including Matt Smith, the chief growth officer of the Allegheny Conference; Dave Daquelente, executive director for the Master Builders’ Association of Western Pennsylvania; Brandon Snyder, vice president and Pittsburgh market leader of AI. Neyer, NAIOP Pittsburgh Board President; as well as Brandon Mendoza, executive director of NAIOP Pittsburgh and Shawn Fox, president of RDC, Inc.
“Today’s action signals that the City of Pittsburgh is open for business. We appreciate Mayor Gainey’s leadership and the spirit of partnership he and his team have demonstrated in working with the business and development communities to reach a consensus on how to address a significant barrier to growth and investment,” said Smith. He added, “By providing developers and investors with greater certainty, the newly announced forty-thousand-dollar cap on zoning fees opens opportunity for catalytic investments, opportunities that would have otherwise been deterred. We look forward to continuing to work together across the public and private sectors to find innovative approaches to economic development and growth that move the City of Pittsburgh and the region forward.”
Prior to the current changes, Pittsburgh Zoning and Development Review Division cost $3 million to run and only brought in $1.6 million in revenue.
For more information, please visit:
https://pittsburghpa.gov/
https://www.naiop.org/
https://www.alleghenyconference.org/
https://www.neyer.com/
