The Urban Redevelopment Authority (URA) of Pittsburgh issued $31.6 million in bonds to finance several affordable housing initiatives.
The bonds mature between 2024 and 2048, yielding between 4.742% and 5.718%. They received a rating of A+ from S&P Global Ratings.
The issuance is part of Pittsburgh’s recently-announced plan to address its dearth of affordable housing. Over the summer, Mayor Ed Gainey announced the city would invest $2.5 million in affordable housing annually over the next 25 years. The URA will issue up to $42 million in bonds to bolster that support.
The bond proceeds will support a plethora of Pittsburgh programs related to the construction or rehabilitation of affordable housing. These include the Rental Gap Program, which provides loans to nonprofit-affiliated developers to create and preserve affordable rental housing; the For-Sale Development Program, which strives for a similar goal but targets homebuyers; the Pittsburgh Downtown Conversion Program, which converts old offices into affordable housing in the city’s central business district; and the Housing Preservation Program, which provides funding for existing affordable housing units.
There is a “severe shortage” of up to 15,000 affordable rentals and homeownership opportunities in the city, according to Habitat for Humanity of Greater Pittsburgh, a nonprofit.
The bonds are limited obligations of the authority, secured by a city pledge to annually appropriate funds for URA debt service. “In our view, the obligation maintains a strong relationship between the city and URA,” S&P analysts wrote.
PNC Capital Markets LLC served as underwriter on the issuance, purchasing the bonds for close to par. Caine Mitter & Associates Inc acted as financial advisor.