Politics

The Progress and Promise of Pittsburgh's Turnaround

After years of decline, the city is making gains, and Mayor Bill Peduto’s administration represents a new brand of politics that’s moving into big cities across America.
by | November 2014

Dan Gilman has a good story to tell. The district he represents on the Pittsburgh City Council is thriving, with half a billion dollars’ worth of new construction in the works and tech companies from Apple and Google on down expanding their operations. Over the past decade, the district’s population has grown by 10 percent, with newcomers under 35 not only helping to end the city’s long population decline, but also bringing its median age down lower than the nation’s as a whole for the first time in decades. Property values are climbing so fast that Gilman can’t afford to buy a home in his own district. “I love my landlords,” he joked recently to a crowd at a fundraiser.

But what allowed Gilman to pack a big basement room with developers, bankers and lawyers a full three years ahead of his next election was not simply that his district is prospering. He is known to have a close and valuable friendship with Pittsburgh’s man of the hour, Bill Peduto, who was elected mayor last year after serving on the city council for more than a decade. The city has changed markedly over that time -- growing younger and more prosperous, and more liberal as well. Pittsburgh has been a Democratic city as long as anyone can remember, but it was a union town full of Democrats with a conservative streak, especially on social issues. Now Peduto is helping to reshape Pittsburgh into an assertively liberal city, one whose leaders talk about green energy, inequality and economic justice.

At first, Peduto was a lonely liberal reformer on the city council -- representing the East End district that Gilman now serves (Gilman was Peduto’s top aide). Pittsburgh still operated largely on machine principles, with jobs in public works and city contracts disproportionately offered to cronies of the mayor and his circle. Most of the important decisions seemed to be made by the same group of about 40 powerful individuals and institutions. Over the past dozen years or so, though, Peduto has helped to form new coalitions among unions, religious leaders, and environmental and community groups. They became the foot soldiers that helped elect a majority of his allies to the council and laid the groundwork for Peduto himself to get elected mayor on his third attempt. “While it’s been a Democratic city for generations, it’s now a new kind of Democratic,” says Rich Fitzgerald, the Allegheny County executive and a Peduto ally. “Bill certainly is a mayor who represents that new Pittsburgh, that city that’s emerging of millennials, that’s different than the Pittsburgh of 20 or 30 years ago.”

In fact, Peduto represents something that’s happening on a national scale. He was part of a large class of liberal activists elected mayor in big cities last year -- Bill de Blasio in New York most famously, but also Ed Murray in Seattle, Marty Walsh in Boston and Betsy Hodges in Minneapolis, among others. They all ran successfully on similar platforms, promising to address issues such as income disparities, environmental sustainability and early childhood education.

It wasn’t coordinated, but it wasn’t an accident either. Nearly all big-city mayors are Democrats these days. The new group is not only liberal but also eager to test out ideas that have no chance to play out in Washington. They reflect the changing population of big cities and the interests of those new city dwellers. They’re helping to make urban America not just reliably Democratic but also a hotbed of liberal experiment.

Next month, Peduto hopes to win a grant from the White House in order to make pre-kindergarten education more readily available throughout the city. President Obama himself concluded that attempting to get Congress to pass an ambitious pre-K initiative would prove futile, and that it would be more worthwhile finding a dozen mayors ready to expand early childhood education in their cities. That’s a perfect fit with the goals of Peduto and the rest of the cohort of new progressive mayors.

“The Progressive Era didn’t start in Washington,” Peduto says, referring to the great burst of political reform and government activism around the dawn of the 20th century. “It started in city halls in the 1880s and 1890s, and it’s coming back through city halls again. I’m proud to be a part of that movement.”

In some ways, Peduto’s selling job is harder than that of his colleagues in places like Boston or Seattle, simply because Pittsburgh remains bound to its past in ways that don’t hold in cities that have been growing for a longer period. It’s still not uncommon in Pittsburgh for multiple generations of families to live within a block or so of one another. Residents have a habit of referring to places by what they used to be. “If you go to Macy’s, which used to be Kaufmann’s, then you’re right in the center of the city,” says a woman offering directions downtown.

Peduto is the first mayor of Pittsburgh in more than 100 years who wasn’t born within the city limits, but he’s no outsider. After crossing the Monongahela River on a recent evening, and driving a few miles to his hometown of Scott Township to accept a proclamation in his honor, he reminded town commissioners that his great-uncle had designed the building they meet in and that his uncle had served as Scott’s police chief. He bragged about hitting his first home run on the ball field next door to the town hall. “I remember where I was when Roberto Clemente died,” Peduto said, recalling the Pirates legend who was killed in a plane crash in 1972. “I was at David Goldberg’s house and Mrs. Goldberg came down the stairs crying.”

A lot of Pittsburghers of his generation -- Peduto turned 50 the day before Halloween -- decided they had to get out. There just weren’t enough jobs. At its trough during the 1980s, Pittsburgh had a higher unemployment rate than Detroit has today and more debt than New York when it went bust. Its population, which was nearly 700,000 in the 1950s, slipped to barely 300,000 a half-century later. And as its native sons and daughters left in search of greater opportunity elsewhere, Allegheny County found itself with the second-highest proportion of elderly residents of any large county in the nation. “We started out as an older place, but really it was the out-migration of the younger folks who took their families and their future families away with them,” says Chris Briem, a regional economist at the University of Pittsburgh.

But for all its problems, Pittsburgh retained real strengths. The city was quick to turn to an “eds and meds” economic strategy. The steel mills and coke works were closed, but their central role in the economy was taken up by hospitals employing thousands. Universities such as Pitt and Carnegie Mellon not only thrived but helped incubate tech businesses. Pittsburgh has as much foundation money per capita as any city that isn’t home to Bill Gates. The city and its private and nonprofit partners cleaned up the riverfronts, built new parks and helped attract big companies like American Eagle Outfitters back into the city.

Pittsburgh is truly bearing the fruits of those investments at the start of the Peduto era. Huge commercial and residential developments are under way in parts of town where there had been little economic action for decades. The former industrial area of Lawrenceville is a good example. It’s loaded with boutiques, fusion restaurants and coffee shops, and boasts the first single-screen movie theater built in an urban environment anywhere in the country in the past generation. The number of people ages 18 to 24 in Pittsburgh grew by 17 percent between 2000 and 2010. The young people who used to move away after high school or after college are now staying. They’re being joined by out-of-state transplants attracted by the rivers and the hills, by the city’s old-school charm and neighborhood feel, and, mainly, by the increasingly healthy job market. One of his opponents in the mayoral election last year was shocked by the results of a baseline poll that showed 25 percent of the likely voters in the Democratic primary held advanced degrees. One recent Cleveland State University study showed that Pittsburgh ranked third in the nation in its percentage of 25- to 34-year-old residents with advanced or professional degrees, higher than Austin, Chicago or Seattle. This is no longer the city of the stereotypical blue-haired lady living in a row house. “Cities like Pittsburgh and Cincinnati were just struggling to survive,” says Tom Murphy, who served as Pittsburgh’s mayor for a dozen years until 2006. “Now we can lift our heads up and say, ‘How do we spread the wealth?’”

Indeed, that may be Peduto’s biggest challenge. While parts of the city have become magnets for people priced out of more expensive places along the Eastern Seaboard, a quarter of its residents are still living in poverty. Some neighborhoods are growing fast, but others are well into their sixth or seventh straight decade of decline. Even as the city becomes a jolly playground for Ph.D.s, it has to worry like other cities about how to find jobs for those who never made it past high school. Peduto’s installation of bike lanes downtown was in keeping with his eco- and transit-friendly vision for the city, but the project has become a target for people who say he is spending money on luxuries at a time when many areas need serious help. “We concentrate on the fact that this city has all of a sudden become attractive to outsiders,” says state Rep. Jake Wheatley, one of Peduto’s challengers in the mayor’s race last year. “All throughout this city, you have people -- black and white and other -- who are struggling.”

The city government itself still isn’t out of the woods. A decade ago, Pittsburgh was so strapped for cash that it was forced to cut essential services such as parks and police, and had its finances taken over by the state. A sizable chunk of its annual budget goes to paying down old debt, and it’s considered officially a “financially distressed” city, with the state government having to sign off on its budgets. In September, Peduto proposed a budget that would impose a two-year salary freeze on city employees and make them pay more for their health care. He also wants to raise property taxes, and is negotiating voluntary contributions in lieu of a tax from the city’s major charitable and nonprofit organizations.

Despite very real limits on municipal finances, Peduto is doing what he can to make sure the city as a whole benefits from its booming real estate market. He recently helped broker a deal with the Pittsburgh Penguins hockey team that ended years of squabbling over what to do with a 28-acre parcel where the team used to play. Peduto approved the largest tax increment financing district in the city’s history, set to raise at least $22 million over 20 years for redevelopment projects on the parcel, which is located near the Uptown and Hill districts. The Penguins’ development alone will create 220 units of affordable housing (out of 1,100 that are planned), while setting aside 30 percent of the development business for minority-owned firms and 15 percent for women. These set-aside numbers weren’t as high as some residents of the Hill District wanted, but they represented records for the city. The entire approach was a far cry from the original construction of the arena, which destroyed hundreds of homes and cut out the economic heart of the area. “Bill’s challenge is not whether there’s going to be enough jobs and wealth, but whether that wealth is going to benefit working-class neighborhoods of Pittsburgh,” says Gabe Morgan, a vice president and state director of the Service Employees International Union. “Unlike a lot of mayors, he views that as a central challenge.”

Peduto has a long list of other mega-developments about to come online. In addition, he has constructed a wish list of ambitious projects that include countywide light rail, a completely revamped sewer system, and higher wages for the thousands of Pittsburghers working for large health and insurance nonprofits. In order to accomplish all this, however, Peduto has fewer tools at his disposal than some mayors. He doesn’t control his city’s schools, and transit is largely under the jurisdiction of Allegheny County. In order to address the systemic problems of the city, Peduto knows he has to turn to a wide assortment of partners. But with all the help he needs -- from developers, the county, the state, the federal government, corporations and the major nonprofits -- he knows he can only ask for so much. “It’s sort of like the old cookie jar -- you can only get one cookie from the cookie jar,” Peduto says. “You’re not going to get everything you want, but if you can prioritize what it is that you need, you can probably have some success.”

In certain ways, Peduto can’t help but look good as Pittsburgh’s mayor. Not only is the city thriving, but Peduto’s openness -- his monthly town halls and his constant presence on social media -- stands in stark contrast to the image of his predecessor. Luke Ravenstahl unexpectedly became mayor at age 26 with the death of Bob O’Connor eight years ago. By the time Ravenstahl left office in 2013, he was essentially missing in action, under federal investigation and rarely spotted in the city-county building. “It changes a community when you have an administration under investigation and the police chief arrested,” says Grant Oliphant, the president of Heinz Endowments. (Former Police Chief Nathan Harper was sentenced in February for theft and fraud.)

Oliphant has worked in and around politics long enough to have developed a healthy amount of cynicism, but he says Peduto won him over by talking about the need to uproot what he saw as endemic corruption and patronage in the mayor’s office. A lot of the existing mayoral appointments didn’t have job descriptions, or had been tailored to fit the last person hired. As a result, Peduto let anyone who wanted to work on his administration serve on transition committees and then essentially outsourced the vetting of agency directors and assistant directors to foundations and search firms. “He said, ‘If I can trade power for talent, that’s good,’” Oliphant recalls.

While he is attempting to lay out an ambitious agenda for change, Peduto knows that when he appears before the public he’s a lot more likely to hear questions about trash pickup, snowplowing and potholes. That’s why he’s been at pains to streamline city functions and get the government into better working shape. When Peduto took office, the Bureau of Building Inspection didn’t even have email. The agency has taken what seem like incredibly simple steps, such as putting computers on everyone’s desk and supplying inspectors with cellphones. An agency that simply hadn’t kept up with the times is now trying to implement bigger changes, creating a database that would allow its vast stores of records and property information to be available to all the other city departments that could use such access. It’s a relatively small fix, but it’s a good example of the way Peduto’s administration is trying to modernize creaky functions. “Right now, the Pittsburgh market is really hot and the developments will come,” says Natalia Rudiak, a member of the city council. “But what our residents are really focused on is better response times to 311 and seeing our roads and bridges fixed.”

Peduto made his reputation on the city council by pushing for more openness in government, working on bills concerned with no-bid contracts, lobbyist disclosure and campaign finance rules. Over time, he took on broader policy fights, helping to pass Pittsburgh’s first clean air and water laws in generations, as well as legislation setting a prevailing wage floor for certain classes of workers. Those initiatives helped build the army of political newcomers that eventually gave Peduto majority support on the council, as well as ensuring his own election as mayor by expanding his base beyond the affluent East End.

All of this wind at his back gives Peduto the chance to put a pretty strong stamp on a city that is already rethinking its own image and ambitions. The government itself may finally be getting closer to escaping from state financial control, and construction cranes are going up in neighborhoods that hadn’t seen them for decades. People from outside the city who still imagine it as some kind of smoky wasteland would be shocked by the extent of its recovery from its long years as the buckle of the Rust Belt.

But the most important change may be that Pittsburgh -- a city that hasn’t had to deal with growth issues for decades -- is now awash with newcomers and eager investors. Longtime residents had lost the habit of looking toward the future with hope. That’s something they’re just starting to regain. “I never thought, growing up here, being born and raised here, choosing to live and die here -- I never thought that I would live in a city that would be a boomtown,” Peduto says. “I always thought it would be how well do we manage decline.”

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