Costa legislation could keep some homeowners in growing areas from being taxed out of homes

State Senate Minority Leader Jay Costa has introduced legislation that he said would protect longtime homeowners from being taxed out of their homes.

Costa, D-Forest Hills, said the Longtime Owner-Occupant Tax Exemption Program, or LOOP, would allow first- and second-class cities and counties — including Pittsburgh and Allegheny County — to enact ordinances protecting homeowners in developing areas who are facing increasing property taxes as a result.

In some Pittsburgh neighborhoods where development has caused property values to skyrocket, some longtime residents risk being priced out of their homes because of the increase in property taxes, Costa said. The legislation would allow participating cities and counties to freeze tax increases for such residents.

“These are longtime homeowners who have made investments in their communities,” he said Thursday at a news conference in Pittsburgh’s Bloomfield neighborhood, an area where Costa said homeowners are facing added property tax burdens because of development.

Costa said he is pushing for the legislation to be passed this year. He introduced it along with fellow Democratic Sens. Christine Tartaglione and Nikil Saval of Philadelphia and Tim Kearney of Delaware County.

State Rep. Sara Innamorato, who has lived in Lawrenceville for 13 years, said she’s seen firsthand how development can lead to financial burdens on existing residents. Since 2000, the median home price in Lawrenceville has gone up about tenfold and the average home price is now around $350,000.

“Progress should not come at the expense of our neighbors who have raised their kids here, built their roots here,” Innamorato said. “People who have been here for a long time deserve to stay in neighborhoods they have invested in.”

Costa said bills on the matter would be moving in both chambers of the state legislature next month.

For such an initiative to be implemented now, current state law would require Allegheny County to enact an ordinance allowing its municipalities to enact their own programs to defer or exempt increasing taxes. The county has been unable to create a program that satisfied court challenges and provided flexibility to the various needs of municipal governments within its borders.

The county in 1990 enacted a program to protect longtime residents from increasing property tax pressure, but the courts in 1995 found it was too broad and did not comport with state law.

The LOOP legislation would give Pittsburgh the power to enact such a measure on its own.

Mayor Ed Gainey said local officials “need this bill.”

“The more tools we have in our toolbox, the more we can keep our neighborhoods stabilized, the more we can keep it affordable,” he said. “We don’t want to push out. We want to bring in.”