Urban development in Pittsburgh surges for first time since 1960s

The Locomotive Lofts in Lawrenceville are part of a recent trend of apartments being built or buildings being converted into apartments in that neighborhood, Downtown and the South Side.
The Locomotive Lofts in Lawrenceville are part of a recent trend of apartments being built or buildings being converted into apartments in that neighborhood, Downtown and the South Side.
Photo by Andrew Russell | Tribune-Review
Aaron Aupperlee
| Sunday, Aug. 11, 2013, 11:03 p.m.

Sota Construction Service finished the Locomotive Lofts in Lawrenceville a few weeks ago. Renters have snapped up close to half of the 34 apartment units available, a sign that demand remains strong amid what developers say is a historic boom in apartment construction.

“There's been a good influx of people wanting to move to city dwelling,” said Phil Ford, vice president of business development at the Ross-based firm. Sota just started another apartment project, converting the abandoned Prospect Middle School in Mt. Washington into 67 loft apartments.

“We don't see it really tapering off or slowing at this point,” Ford said.

Decades of little to no apartment construction and pent-up demand for housing close to the city fueled Pittsburgh's latest apartment building surge, experts said.

Developers added more than 2,000 units to the city since 2000, according to data provided by Integra Realty Resources Pittsburgh. More than 1,000 are under construction, and 2,330 units have been proposed, Integra reported.

Construction costs for 20 apartment building permits issued by the city between January 2012 and June 2013 could top $47 million, according to the city Bureau of Building Inspection.

Downtown, the Strip District, South Side and East End neighborhoods, including East Liberty and Shadyside, are among the hot spots of apartment construction.

“This is really the first big urban development that we've had since the '60s,” said Paul Griffith, a senior managing director with Integra in Sewickley.

“We've gone through a period where I think there was significant pent-up demand, and there was a shift away from owner-occupied. ... That was the catalyst.”

The heyday could last years, Griffith said.

He expects the boom in and around Pittsburgh to peak in 2014 and 2015. Suburban markets along the Interstate 79 corridor from South Fayette to Southpointe and in Wexford and Cranberry will experience a decline, Griffith said. Those areas likely will not add the needed employment to keep pace with the planned apartment development, he said.

The city should remain stable, even after the peak, Griffith said. Employment developments such as Google announcing an expansion in Bakery Square in Larimer and a trend toward urban living will help keep the city's apartment market strong, he said.

Apartment development at SouthSide Works recently restarted after a decade-long hiatus.

The Urban Redevelopment Authority on Thursday approved two apartment building developments. The authority's board OK'd a third complex weeks earlier. The URA purchased Morningside School in Morningside as part of a plan to convert it to apartments.

“There are projects in the pipeline, and there is a lot of demand,” said Yarone Zober, chair of the URA board of directors and chief of staff for Mayor Luke Ravenstahl.

Mistick Construction received building permits for nine projects in the past 18 months. The type of units Mistick built reflect trends of more wealthy apartment dwellers and people who view apartment living as long-term housing. The housing crash made some recoil from the concept of home ownership, Mistick said.

“It's been a rich and wonderful ride,” said Bob Mistick, president of North Side-based Mistick Construction. “It makes Pittsburgh on the radar of national and local developers.”

Aaron Aupperlee is a staff writer for Trib Total Media. He can be reached at 412-320-7986 or aaupperlee@tribweb.com.

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