Pittsburgh-based developer Walnut Capital told the city’s Zoning Board of Adjustment on Thursday that it wants an exemption from rules that require its long-awaited development in Oakland to include affordable housing.
But no matter what the board decides, the long fight about the city’s inclusionary zoning policy seems likely to continue.
Inclusionary zoning, or IZ, requires new developments in designated neighborhoods to set aside a percentage of housing units that are affordable for people at lower income levels. Established in 2019 for Lawrenceville’s skyrocketing real estate market, it expanded into Bloomfield, Polish Hill and parts of Oakland during former Mayor Ed Gainey’s administration.
Walnut’s project in Oakland, called The Caroline and located on McKee Place, got underway with the IZ rules in place. But on Thursday, Walnut attorney Jonathan Kamin said the developer still hopes to have them lifted.
“ Because this is a student-housing project and because of my client’s ability to get it done, we were able to make it work, and that’s why the project is under construction,” Kamin said. “But it is a very difficult challenge to [place] on people who are looking to develop housing in Pittsburgh.”
Not everyone in attendance was impressed by that argument.
Andrea Boykowycz, executive director of the Oakland Planning & Development Corporation, said she was struck by “ the chutzpah that it takes to demand a variance to a law merely because you don’t like it.”
“ Walnut Capital undertook this project with full knowledge that it would be governed by the inclusionary-zoning overlay,” said Boykowycz.
Kamin’s attempt to refight IZ’s application for the 11-story, 159-unit Caroline project is part of a broader legal strategy — one that may yet undermine the policy everywhere in the city.
The Builders Association of Metropolitan Pittsburgh challenged the policy by suing the city in federal court in 2022. In its suit, BAMP argued that the policy violated developers’ property rights by forcing them to absorb the costs of the city’s affordable-housing initiative.
That lawsuit was thrown out late last year. A judge ruled that a court couldn’t decide whether the policy was being applied unlawfully until developers had exhausted other efforts to get around it, such as seeking a waiver.
As Kamin acknowledged, Walnut is asking the board for such a waiver to “essentially tick off that box, and so the Builders Association can continue with its lawsuit and actually get to … the validity of the ordinance.”
And even if the board grants Walnut’s waiver, he added, another of BAMP’s “hundreds of members” would bring the challenge back to federal court.
Kamin said the IZ rules, which would require 10% of the project’s units to be affordable, would cost Walnut nearly $4.9 million. He said that even if developers abide by a rule they consider to be illegal to get a project started, they shouldn’t be held to it.
“Just because a city has adopted an ordinance doesn’t mean that it’s legal. This ordinance is illegal, unconstitutional, and yes, it will have its day in court,” he said.
Several community members urged the board to dismiss the waiver request, and Kamin’s criticisms of inclusionary zoning.
“ It’s inconceivable that Walnut Capital’s investors and lenders on a project of this scale would approve construction financing for a project that’s impossible to develop under the existing zoning requirements,” said Dave Breingan of Lawrenceville United. The neighborhood advocacy organization has long supported inclusionary zoning.
Boykowycz, of the Oakland group, also took issue with Kamin’s assertion that The Caroline should be exempt from requirements because it would provide housing for students.
“ The way the city’s IZ law is written, it does not in fact exclude students,” she said. “A sizable proportion of the target audience for this development actually meets the income criteria.”
The Zoning Board granted Walnut Capital and any objectors two weeks to submit additional information. The board’s decision is due 45 days later.