Pittsburgh looks to place cap on zoning fees for large development projects

Pittsburgh City Council is expected to vote Tuesday on a proposal that would cap zoning fees at $40,000 for large developments.

City Council already approved a new zoning fee schedule that includes a fee of 0.1% of a project’s cost for residential developments and a 0.3% fee for commercial developments.

The new schedule is designed to help the city recoup the costs of operating its Zoning and Development Review Division and to equitably divide those costs among projects of varying scopes, said Jake Pawlak, director of the Office of Management and Budget. Because it takes longer for the team to review larger commercial projects, he said, those developers are charged more.

The proposed $40,000 cap is meant to keep the costs reasonable for larger developments, he said.

“This has no negative impact on the budget or on our revenue,” Pawlak said, explaining that the updated fee schedule is still anticipated to cover the costs of the Zoning and Development Review Division even with the cap in place.

City officials said it cost more than $3 million last year to run the division, which brought in only $1.6 million in revenue.

Pawlak said that was because “for many years, the city’s been essentially undercharging” by assessing a series of flat fees.

Based on past developments, the city said only about 4% of development projects would be impacted by the $40,000 cap should it gain approval from City Council, Pawlak said.

The fee schedule has been in effect since the beginning of the year, Pawlak said. No projects so far this year have had fees that would have exceeded the $40,000 cap.

Councilwoman Erika Strassburger, D-Squirrel Hill, said the $40,000 cap is “signaling we are rolling out the red carpet for people to invest in our city.”

“I’m in support of anything that signals we’re open for business, that we want to welcome responsible development here,” she said.

Councilman Anthony Coghill, D-Beechview, who owns a contracting company, said he felt the cap “was a great idea.”

Still, he said, many colleagues in the business have told him they’re more concerned with finding ways to expedite the permitting processes in the city, which many have complained are slow and cumbersome compared to neighboring municipalities.

“I’d like to see that streamlined where it’s easier for people,” he said.

Council President Theresa Kail-Smith, D-West End, said she’d like to look for additional ways to incentivize development throughout the city.

Related:

• Pittsburgh updates fees for residential, commercial development projects