In 2019, an inclusionary zoning ordinance was implemented in Pittsburgh’s Lawrenceville neighborhood. Inclusionary ordinances aim to provide affordable housing to low-income families. This ordinance specifically required that at least 10% of the units in newly constructed housing developments in Lawrenceville (or substantial improvement to existing developments) containing 20 or more units be designated for low to moderate-income households and rented or sold at below-market prices.

The Suit

On May 2, 2022, legislation was signed into law to expand the ordinance to the Bloomfield and Polish Hill neighborhoods. Almost immediately following this expansion, on May 12, 2022, a group of roughly 400 developers and homebuilders represented by the Builders Association of Metropolitan Pittsburgh (BAMP) filed suit in federal court, claiming that the ordinance is unconstitutional, illegal and confiscatory. BAMP contends that while the government can take private property for public use, it cannot do so without just compensation; therefore, BAMP asserts that for the ordinance to be upheld, just compensation must be given to the property owners who are affected. BAMP also alleges the ordinance violates the Federal and Pennsylvania State Constitutions, as well as Pittsburgh’s Home Rule Laws.

The Impact

The city maintains that the ordinance will increase the housing availability for lower- to middle-income households in areas where housing prices have skyrocketed in recent years. Conversely, BAMP asserts that the ordinance only serves to disincentivize developers from creating larger housing projects in these areas. Developers who are currently engaged in or considering projects that would be subject to the ordinance should pay particular attention to the court’s interpretation of the ordinance. The case is Builders Association of Metropolitan Pittsburgh v. City of Pittsburgh, which is pending in the United States District Court for the Western District of Pennsylvania.