Pittsburgh Today & Tomorrow 2014

P I TTS B U R G HTODAY TOMORROW&

T H E F A C T S A N D T H E F U T U R E O F O U R R E G I O N

TODAYPITTSBURGH

R E G I O N A L A N N U A L R E P O R T

p i t ts b u rg h to day a n d t h e b e n c h m a r k r eg i o n s : In order to zero in on opportunities for progress, the journalists and researchers ofPittsburgh Today compare our region with the 14 metro areas listed above. We chose the competitor regions because of a variety of sometimesoverlapping similarities: geography, demographics and industrial mix. We compare these 15 regions in 440 regional indicators, which can be viewedat pittsburghtoday.org. In most of these indicators, we define the Pittsburgh region as the Pittsburgh Metropolitan Statistical Area (MSA), whichincludes Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties. But in many of our reports, we take a broader viewof the region, including counties surrounding the MSA in Ohio, Pennsylvania and West Virginia.

Pittsburgh Today is part of the University of Pittsburgh’s University Center for Social & Urban Research. Pittsburgh Today believes that thebest decisions about Greater Pittsburgh’s future can only be made when we first understand the region’s current strengths and weaknesses. Weaugment this statistical portrait with explanatory journalism—including this Pittsburgh Today & Tomorrow report—which gets behind the numbersto help further an in-depth understanding of key topics for Pittsburgh’s future. n

DenverKansas CityMilwaukee

St. LouisMinneapolis/St. Paul

IndianapolisDetroit

CincinnatiCleveland

P I T T S B U RGH

CharlotteRichmond

Washington, D.C.Philadelphia

Boston

pittsburghtoday.orgk n o w y o u r r e g i o n

h o w d o e s

p i t t s b u r g h c o m p a r e w i t h

1 4 s i m i l a r c i t i e s

?

2 PITTSBURGH TODAY & TOMORROW

Economic vitality positions the region for 2014 and beyond.Students and research dollars from around the world comehere and stay here. Our financial institution headquarters are

strong. A new industrial manufacturing base has been created by theMarcellus Shale. Stable housing and commercial real estate valuesmake this region extremely attractive. Communities surrounding thecity that need to be revitalized are a major concern. These areas havelost main streets, population and tax base. Infrastructure needs repair.We must jump-start these communitiesbecause they are the core of our region.”

— Howard W. “Hoddy” Hanna III,Chairman and CEO Howard Hanna Real Estate Services

P I T T S B U R G H ’ S

TOMORROW

I D E A S F O R B U I L D I N G

“

You’ll find more “future thoughts”

throughout the report >>

PITTSBURGH TODAY & TOMORROW 3

TODAYPITTSBURGH

ECONOMY4

DEMOGRAPHICS

Immigrants wanted

68

HOUSING11

EDUCATION

Attendance matters

1213

HEALTH16

ENVIRONMENT

Shale gas & the environment

1718

PUBL IC SAFETY22

TRANSPORTAT ION

Transit’s new era

2324

ARTS27

SUSTAINABIL ITY

Value in visitors

2829

n INSIDE THIS REPORT: The 2014 Pittsburgh

Today & Tomorrow report, produced by Pittsburgh

Today, analyzes recent data to assess the

Pittsburgh region’s standing compared with 14

U.S. cities in 10 categories. n FEATURE STORIES: Also included are numerous

in-depth reports focusing on the most important issues facing Greater Pittsburgh.

n LOOKING TOWARD THE FUTURE: Pittsburgh Today asked 20 local leaders

across a variety of disciplines and industries to weigh in on Pittsburgh’s future by

briefly answering this question: What obstacles do we need to overcome and/or

opportunities do we need seize in order to ensure a strong future for the region?

Through the pages of this report, you’ll find their insights. n GET MORE: Explore

additional Pittsburgh regional data and journalistic reports at pittsburghtoday.org.

14P I TTS B U R G HTODAY TOMORROW&

Douglas Heuck, Program DirectorIsabel T. Orozco, Research SpecialistJeffery Fraser, Senior EditorEmily D. Craig, Director of Communicationsand Business DevelopmentJulia Fraser, Staff WriterJames Hilston, Charts and Graphs SpecialistJennifer McNulty, Graphic Designer

n 2013, the pittsburgh metro area’seconomy continued to march forward on severalbroad fronts. Employment growth of almost 15,000jobs (1.4 percent) lagged national gains of 1.5 percentonly slightly, and comfortably outpaced

Pennsylvania’s 0.5 percent job growth. The metro unem-ployment rate ended 2013 at 6.7 percent. Service industryjob creation drove labor market gains throughout last year.And aside from the market area’s stalwart education andhealthcare sector, professional and business services madethe strongest contribution to 2013 hiring.

PNC forecasts job gains of 15,000–20,000 this yearwith the Pittsburgh metro area’s unemployment rate end-ing this year at 6.3–6.5 percent—a rate not seen since late2008. Clearly lacking in Pittsburgh’s steady labor marketrecovery, though, is the more rapid consumer spendingthat one might expect from gains in the relatively high-paying positions the market area added over the past year.

I

ECONOMY

0% 2 4 6 8 10

14) philadelphiabenchmark avg.

6) pittsburgh

15) detroit

2) richmond

1) minneapolis

5.7%

4.5%

6.6%

7.7%

9.3%

6.8%

data source: Bureau of Labor Statistics; Figures are for U.S. Metropolitan Statistical Areas (MSA); Current month data are preliminary. All data are seasonally adjusted figures.

unemployment rate | NOV. 2013

0.9%

1.2%

-0.1%

-0.8%

-1.6%

-0.6%14) st. louis12) pittsburgh

2) denver1) detroit

benchmark avg.

15) philadelphia

-2.0 -1.5 -1.0 -0.5 0% 0.5 1.0 1.5


% change in labor force | NOV. 2012–NOV. 2013

Trending strongerfurther expansion on tap for pittsburgh’s economy

By Stuart Hoffman


Locally, retail and leisure/hospitality industries have trailedthe national pace of hiring consistently since 2012, with retailjobs finishing 2013 below 2012 year-end figures. High-paying,education-heavy job creation is a great story for Pittsburgh’slong-term health. But in order for the market area to push itsunemployment rate back towards its pre-recession levels in themid-4 percent range, income creation will have to translate intomore consumer spending; an optimistic take is that the faster2014 national economic growth that we forecast could well pro-vide the confidence boost that Pittsburgh’s spending habitsneed.

On the longer-term radar is regional income growth poten-tial from natural gas drilling. So far, low prices have delayedexpansion of Marcellus Shale natural gas extraction throughoutmost of the post-recession period. Once prices rebalance, newhiring should boost regional income growth substantially.Nationally, infrastructure to transport Marcellus natural gas toprocessing plants and utilities is becoming ever more apparent.Addressing the need for pipeline construction will likely rejuve-nate Pittsburgh’s manufacturing job base as well, which main-tains a heavy concentration in primary and fabricated metalsproduction. This industrial evolution in the Pittsburgh marketarea will support consistently strong income growth in the yearsto come.

Pittsburgh’s housing market enters 2014 riding a veryencouraging trend. Home values are rising at a 5-percent-plusrate in year-over-year terms, and accelerating. While such pricegrowth may not be eye-catching compared to other regions,Pittsburgh has not seen such a trend since the national eco-nomic boom of the late 1990s. The benefit of this trend inhome values is underscored by the fact that Pittsburgh’s hous-ing market equilibrium is already well in hand. The market areasaw very little damage to home values through the recession;housing market activity is in no way threatening an untenableexpansion. New residential permitting activity and existinghome sales remain down from their respective pre-bubblepaces. Continued job creation into 2014 and relatively conserva-

tive current spending trends mean that improving home valuesin the Pittsburgh market area will provide a robust foundationfor household wealth management over the next several years.

Pittsburgh’s long-time trend of population decline is in theearly stages of a turnaround. With continuing new industrialdevelopment, housing market strength, and broad urban devel-opment, Pittsburgh is well positioned to attract and retainyoung workers for years to come. Reliable education, healthcareand financial industry employers are firmly entrenched and willsupport workforce development for the foreseeable future.Pittsburgh is well positioned to benefit from gas drilling activityin the Marcellus Shale formation over the longer term. Skilledworkers already experienced in this industry will findPittsburgh’s low living costs attractive, and migration trends arelikely to see a boost as a result. n

Stuart Hoffman is chief economist with PNC Financial ServicesGroup and chairs the Pittsburgh Today economy committee.

2.3%

2.5%

1.5%

0.1%

0.8%

1.4%

-1.0 -0.5 0% 0.5 1.0 1.5 2.0 2.5

15) cleveland14) milwaukee

benchmark avg.8) pittsburgh

2) charlotte1) denver

job growth | NOV. 2012–NOV. 2013


1) detroit $52,341 94.8 $55,212

2) charlotte $50,960 95.0 $53,642

5) pittsburgh $48,701 93.7 $51,976 benchmark avg. $51,697 105.5 $49,002

11) philadelphia $55,833 121 .2 $46,067

12) baltimore $52,967 1 15 .6 $45,819

Average annual pay

Composite cost of living

Wages as a function of cost of living

wages/cost of living | 2013

data source: U.S. Bureau of Labor Statistics (2012 annual average pay); Council for Community and Economic Research (2nd quarter 2013 composite cost of living Index).


he total population of south-western Pennsylvania continues to creep upwardand, as has been the case for the past five years,more people are moving into the region thanleaving. Few, however, are immigrants.

At a time when diversity is of growing importance tobusinesses and regions, southwestern Pennsylvania hasbeen slow to change. Whites, for example, account for86.6 percent of the seven-county Pittsburgh MetropolitanStatistical Area (MSA) population. Only 3.3 percent areforeign born—the lowest rate among the 15 PittsburghToday benchmark regions.

TDEMOGRAPHICS

1,799

benchmark avg.pittsburgh

-12,000

-10,000

-8,000

-6,000

-4,000

-2,000

0

2,000

4,000

-560

’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 2012

data source: U.S. Census Bureau, Population Estimates Program

domestic migration | 2003–12

15) detroit

14) milwaukee

benchmark avg.

5) pittsburgh3) baltimore

1) boston 10.7%

12.1%13.7%

15.9%

17.4%

11.3%

10.7%2) minneapolis

0% 5 10 15 20

% of population in poverty | 2012

data source: U.S. Census Bureau; Figures are for U.S. Metropolitan Statistical Areas (MSA)


benchmark avg.pittsburgh

’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 20120

.5

1.0

1.5

2.0

2.5

3.0 2.7M

2.4m

million

data source: U.S. Census Bureau, Population Estimates Program

population estimates | 2003–12


TOMORROW


The dramatic transformationour region has made over the

past 25 years is remarkable. However,we still have some tough problems totackle, including: teen drug addiction;redundant administrative infrastruc-ture across government agencies; anempty airport; and overdependence onservice industries that effectively recy-cle dollars but rarely produce new ones.To drive real economic growth, we mustbecome an even more attractive loca-tion for companies with large customerbases from outside our region.

— Christopher Gessner, President Children’s Hospital ofPittsburgh of UPMC

“

Historically known for its powerful steel empire, thePittsburgh region struggled long and hard when that

industry declined. Applying lessons learned, we now are developinga vibrant, flexible and diverse economy that includes healthcare,education, manufacturing, technology, and of course, energy. Asa region, we must continue to drive business diversity for our

combined economic benefit, and not permithistory to repeat itself by relying upon

one industry to carry us through.

— Danny Roderick, CEOWestinghouse ElectricCompany

“

Pittsburgh has evolved into a dynamic and diverse city comprisingmultiple industries that have led to job creation. Considering how

the city performed during our most recent economic downturn, thoseattributes have served us well. The continued support of prominentcorporate leaders and government officials working together hascontributed to create our world-class city. Our ability to sustain the currentenvironment is enhanced by the expanding energy industry and the contin-ued growth of our larger financial institutions. A challenge to overcome isthe need for the creation of a comprehensive mass transportation system.

— Vincent J. Delie, Jr., President and CEO F.N.B. Corporation, and CEO of First National Bank

“

Our Pittsburgh regionhas many world-class

business, cultural and non-profit leaders who take activeroles in our community. Theirpassion and expertise providevitally important contribu-tions that enhance our eco-nomic resiliency. Moving for-ward, harnessing our region’sdiversity of thought, ideas andcultural backgrounds will notonly help us drive and leadfuture innovations and break-throughs, it will also help usto “see around corners,” pro-viding a sustainable economyand enhanced quality of life.

— Susan Baker Shipley,President, Pittsburgh & OhioValley RegionHuntington Bank

“

Southwestern Pennsylvania’s pop-ulation is also disproportionately graycompared to the 14 other benchmarkregions, despite evidence that moreyoung adults have recently arrivedthan departed. Nearly 18 percent of thepopulation is 65 or older, which is thehighest percentage of seniors amongthe benchmark regions. On the otherend of the age spectrum, thePittsburgh MSA has the smallest per-centage of residents aged 18 andyounger.

Part of the reason for those num-bers is the brief but significant exodusof mostly young adults from south-western Pennsylvania in the 1980s,triggered by the catastrophic collapseof the steel industry and massive jobloss. At its peak in 1984, some 50,000more people left the region thanmoved in.

That exodus is a distant memory.The most recent data suggest thatnearly 1,800 more people moved tothe region in 2012 than left, sustaininga trend that began five years earlier.And the majority of the new arrivalsare young adults, who are bringing ahigh level of education and theirfuture families with them.

Little progress has been made inreducing the poverty rate in the region.At 12.1 percent, it has barely budgedsince the 2010 decennial census,which reported 12.2 percent of thePittsburgh MSA population living inpoverty. And 18 percent of children areliving in poverty, a rate that suggestsmore children are growing up poorthan in 2010. n


hen kishorPradhan arrived inPittsburgh six years ago,he was alone. His wifewas some 7,500 miles

away in a Bhutanese refugee camp inNepal, where they had been married. Hisfamily was also in a refugee camp. So werehis in-laws.

Within a few years, they’d all callPittsburgh home, arriving with the earlywaves of Bhutanese refugees who’ve beenresettled in southwestern Pennsylvania,where they’ve become one of the region’sfastest growing immigrant populations.

“While applying for resettlement, theysaid that they’d like to go to Pittsburgh,”says Pradhan. “I brought all of my family,my wife, and all of her family. Every one ofthem is here in Pittsburgh because of me.”

How to develop that kind of criticalmass of foreign-born newcomers acrosssouthwestern Pennsylvania is part of the

puzzle that businesses, nonprofits andlocal governments are trying to piecetogether as they explore ways to attractand retain immigrants, whom studies sug-gest can stimulate population growth andsatisfy future workforce demand.

They have their work cut out forthem. Only 3.3 percent of the populationacross the Pittsburgh MetropolitanStatistical Area (MSA) is foreign born—the lowest rate among the 15 PittsburghToday benchmark regions and well belowthe 12.9 percent of foreign-born residentsacross the U.S.

immigration gap

Within Carnegie Steel’s mightyHomestead Works, danger was spelledveszely and pericolo and opasno and nebezpec-no. Still, warnings posted in Hungarian,Italian, Serbo-Croatian and Slovak didn’t

cover all of the languages spoken in themill at the dawn of the 20th century, whenmore than one in five residents of south-western Pennsylvania were foreign-born.

The image of Pittsburgh as a region ofimmigrants has long faded into history. Itspopulation of foreign-born residents,which peaked in 1910 at 448,000, standsat just under 78,000, even though it’s beenrising for longer than a decade.

Reestablishing the region as a destina-tion for immigrants is increasingly seen asa prerequisite for continued economic andpopulation growth. The U.S. CensusBureau reports that immigrants will bethe main driver of U.S. population growthby mid-century. Those newcomers holdthe potential to expand the workforce byfilling the need for both the low-skilledand highly skilled workers necessary tostart more businesses and expand existingones.

Although it varies from region toregion, the educational level of immi-grants to the U.S. is increasing overall. TheBrookings Institute reports, for example,that 30 percent of working-age immi-grants have a bachelor’s degree, which isgreater than the rate of those without ahigh school diploma.

Southwestern Pennsylvania’s immi-grant population is relatively well educat-ed. More than 53 percent of immigrants inthe Pittsburgh MSA have a bachelor’sdegree or higher, the highest such rateamong 50 metropolitan regions ranked bythe Census Bureau. And when Brookingsrated regions by the skill levels of working-age immigrants, Pittsburgh topped the listof places that were once major immigra-tion ports, such as Cleveland, Buffalo,Detroit and Milwaukee.

What the region hasn’t been fordecades is a place that attracts immigrantsin numbers large enough to have a signifi-cant impact on population trends, particu-larly the number of lower-skilled immi-grants necessary for such growth.

“When you take out the older folkswho have been here a long time and thehighly professional folks, the number leftis tiny compared to other places,” saysChris Briem, a regional economist at theUniversity of Pittsburgh University Centerfor Social and Urban Research.

Immigrants wantedcreating a welcoming region is an inexact science

by Jeffery Fraser and Julia Fraser

W

P I TTS B U R G H &TODAY TOMORROW


becoming a destination

Rebuilding the region’s immigrant pop-ulation has gotten considerably more atten-tion in recent years, but it remains a workin progress. One reason is that creating acommunity that immigrants find welcom-ing is an imprecise science outside of tradi-tional points of entry, such as New Yorkand San Francisco.

Immigrants represent a range of cul-tures, education levels and languages. Thekind of support they need to successfullyintegrate into their new communities varieswidely. Those factors and more test the willand resources of cities, counties andregions, particularly those not accustomedto hosting them in large numbers.

“It requires a level of cultural compe-tency and flexibility to interact with all ofthese different groups,” says MelanieHarrington, CEO of Vibrant Pittsburgh, anonprofit created to promote diversity inthe region with a focus on the workforce.“That kind of cultural competency andflexibility is what the region will need todevelop as we grow and more people comehere.”

For some, language is a considerablebarrier. For others, like Pradhan, it is not.He arrived with a command of English—but not a driver’s license or the ability todrive. And his first job and apartment werein Cranberry, Butler County, where publictransit is scarce. “So to do grocery shoppingit would cost me more for the taxicab thanwhat the groceries cost.”

Unlike well-educated professionalsrecruited to work in the region, refugeesoften need help with the most basic neces-sities. Jobs, housing, transportation, and

navigating cultural differences and languagebarriers are high on the list of the chal-lenges they face when they arrive. Finding aplace to live is particularly difficult formany refugees who don’t have the incomeor haven’t yet established the credit to per-suade landlords to accept them as tenants.

And the burdens of adapting are not allon the shoulders of immigrants. Local resi-dents, schools, agencies and others have towork at understanding their new neighborsas well. Missteps, for example, can be assubtle as using an English-speaking child inthe family as an interpreter.

“When a child starts interpreting forthe parents it changes the dynamic in thefamily. Then the kid is holding the power,and that’s not a good dynamic,” says LeslieAizenman, director of refugee services forthe Jewish Family and Children’s Service ofPittsburgh. “It’s not best practice for aprovider to do that. But it does happen.”

The opportunity to find jobs is one ofthe strongest reasons immigrants come to aregion. Being able to bond to others likethemselves is one of the chief reasons theydecide to stay. “Social support is an incredi-bly important element of making it in aplace,” says Adriana Dobrzycka, VibrantPittsburgh’s community outreach andinclusion manager.

attitudes & actions

One of the most important factors thatdetermine whether immigrants come to aregion or city and stay has less to do withthem than it does with the expressed orperceived desire of the community’s resi-dents and leaders to accept them as neigh-bors and make them feel at home.

“You have to have thatwill among enough of the gen-eral population to become awelcoming environment,” saysDavid Lubell, executive direc-tor of Welcoming America, anonprofit that helps cities andcounties become a placewhere immigrants choose tolive. “That tells immigrantsthat the people want themthere and then they starttelling relatives and friends to

come.”Allegheny County and City of

Pittsburgh leaders have gone public withtheir support of local efforts to attractimmigrants. The county, for example,recently became a Welcoming Americapartner, pledging to work with the groupsengaged in improving the environment forforeign-born newcomers. And officialsmade clear their belief that the region isbest served if it’s seen as open to all. “We’vetraded people, like my grandfather, whocame here to work with their arms andbacks, for those who’ve come to work withtheir minds,” says Pittsburgh Mayor BillPeduto. “But we still need the cross sectionof immigration in order to build up neigh-borhoods within the city.”

Local support for building the immi-grant population and smoothing the transi-tion of newcomers has grown to includescores of stakeholders ranging from thosewho’ve long been engaged, such as refugeeagencies, to human services, businesses,universities, law clinics and nonprofits suchas Vibrant Pittsburgh and GlobalPittsburgh, whose efforts include attractinginternational students. And an AlleghenyCounty Department of Human Servicesadvisory council created to identify andaddress issues affecting immigrants sug-gests coordination among stakeholders isimproving.

Both county and city officials say thatrather than taking the reins, local govern-ment’s role is likely to be one of supportingthe ongoing efforts of those stakeholders tomake the region a more attractive immi-grant destination. “I think there is a rolefor government to push and coax andencourage,” says Allegheny County ChiefExecutive Rich Fitzgerald. “If they have apartner in government, they move for-ward.”

Such an approach is one of several seenin regions hoping to become new immigra-tion gateways. None have emerged as thebest model, says Lubell. “This is still new,and nobody has been runaway successful. Ittakes time.” In Nashville, for example, thebusiness community and nonprofits tookthe lead. In Dayton, it was city governmentthat convened and led a coalition of non-profits, businesses and others in 2011 to

>>


8.0%

16.7%

12.2%

3.8%

3.3%15) pittsburgh14) cincinnati

benchmark avg.

2) denver

1) boston

0% 5 10 15 20


% of foreign-born residents | 2012

draft a strategy for making the city more immi-grant-friendly.

The Welcome Dayton blueprint includes ini-tiatives to expand language services for immi-grants and government employees, stimulateimmigrant hiring, and provide cross-cultural com-petency training. Dayton also is enacting immi-grant-sensitive law enforcement policies, such aslimiting immigration status checks to only thosewho are suspected of committing a serious crime.

Dayton officials found several reasons to act,not the least of which was the hope that a surgeof newcomers would reverse a steady drop in pop-ulation, revive an economy struggling to recoverfrom recession, and heal some of the damagecaused by both, including vacant housing andblight.

“Number one, it’s the right thing to do. We’rean immigrant country,” says Dayton City ManagerTim Riordan. “And we saw these immigrants com-ing in buying and taking care of houses in the city.We have lost a lot of population. So, when you’vegot a group coming in and buying the cheap,crummy houses and fixing them up, that’s a goodthing.”

Job growth and several other conditionsimportant to growing an immigrant populationhave improved in southwestern Pennsylvania, apoint made clear last June to those who traveledto Detroit for the first convening of Global GreatLakes, a network of cities looking to promoteimmigration that includes Dayton, Cleveland,Detroit, Indianapolis and Columbus. It was alsoclear that the Pittsburgh region has a long way togo to become a new gateway.

“Pittsburgh stacked up well among peerregions because of the participation of our univer-sities, unemployment rate, the resilience of theeconomy during and after the recession, thehealthcare network and tech sector. But we’re notas far along in developing a strategy to attract andretain immigrants,” says Thomas Buell, directorof Global Pittsburgh’s Study Pittsburgh initiative.

That would mean developing a strategy toattract more immigrants like Pradhan, who sixyears after arriving in Pittsburgh, lives in Oakdalewith his family and has an information technologyjob at Highmark, downtown. “I love being inPittsburgh,” he says. “I’ve never given a secondthought to moving out of this place, not even toCalifornia.” n

Jeffery Fraser is Pittsburgh Today’s senior editor. JuliaFraser is a Pittsburgh Today staff writer and researchspecialist.

>>P I T T S B U R G H ’ S

TOMORROW


Our region has a greatopportunity to be the

national example of bridging the gapfor chronically unemployed andunderemployed people who have fewtransferable skills by training themfor the emerging natural resourcesjob market. This is being done locallynow in an effort led by MentorsConsulting and Training, and it canand should be done on a larger scale.

— State Rep. Jake Wheatley, D-19th District Pittsburgh

“

Pittsburgh is an incredibly rich arts city filled with creativeand passionate artists ready to change the world. Let’s

harness this energy to reimagine our neighborhoods as creativecommunities where empowered citizens use their imagi-

nations to generate solutions to the city’s toughestchallenges—poverty, education and racism.

— Janera Solomon, Executive Director Kelly Strayhorn Theater

“

Pittsburgh’s most significant challengein the years ahead will be to find or train

the people needed for an economy based on ener-gy, finance, information technology and advancedmanufacturing. PNC sees the future our 4-year-olds willgraduate into, and success will require math and technicalskills, comfort with diversity, creativity and practicalinnovation. We must invest in preparing them for thatfuture or resign ourselves to falling behind.

— William Demchak, President and CEO The PNC Financial Services Group

“

All of the landlordsout there with empty

spaces that have been sittingthere for years should give outreduced rent leases to start-ups that scale upwards if thecompany succeeds. It’ll helpideas turn into realities,because entrepreneurs aremore inspired in an officeand can recruit talent better.Incubators and shared officespaces are cool, but thiswould be a step above that.

— Joey Rahimi, Co-Founder Branding Brand

“


low and steady is an accuratedescription of the housing market in southwest-ern Pennsylvania. And that has been a good thingfor housing values in recent years.The region didn’t see much of the housing

bubble that many other places experienced during the firstdecade of the 21st century. While some homeowners mayhave watched with envy as prices skyrocketed elsewhere,being a reluctant outlier spared them the pain of watchingthe value of their homes plummet when the bubble burst.

Housing price appreciation trends vividly illustrate thebenefits of market stability in the region. Over the past fiveyears, the Pittsburgh Metropolitan Statistical Area (MSA) hashad the second highest appreciation rate among the 15Pittsburgh Today benchmark regions. In fact, Denver is theonly other region where prices have risen over that period.

Looking back 10 years, housing prices in the PittsburghMSA are up 25 percent, well above both the 8.9 percentaverage appreciation rate among the Pittsburgh Today bench-mark regions and the 14.7 percent national average.

In the city, housing prices are climbing in several neigh-borhoods that have emerged as desirable places to live, par-ticularly among young adults. For example, the average priceof residential property has risen 104 percent since 1995 inLawrenceville, where the population of residents aged 65 andolder has declined from 25 percent to 16 percent over thepast two decades.

The relative stability of the southwestern Pennsylvaniamarket is also seen in new building permits issued. Theregion has historically been well below the Pittsburgh Todaybenchmark average in that category. New permits continue to

SHOUSING

be lackluster and the region still falls short of the benchmark aver-age. But the gap has narrowed considerably due to the fact thePittsburgh MSA hasn’t experienced the steep decline in permitsthat has stifled markets elsewhere.

Southwestern Pennsylvania’s housing market is not withoutits blemishes. Its housing stock is the oldest among PittsburghToday benchmark regions. And the rate of vacant houses andapartments remains higher than the benchmark average, despiteimproving slightly last year. n

14) baltimore

u.s. avg.

15) richmond

benchmark avg.

2) pittsburgh-6.2%

-6.4%

-12.8%

-14.3%

8.0%1) denver 10.3%

-15 -12 -9 -6 -3 0% 3 6 9 12

data source: Federal Housing Finance Agency (FHFA); Figures are for U.S. Metropolitan Statistical Areas (MSA)

5-year housing appreciation rates | 3rd Quarter, 2013

14) cleveland

15) detroit

benchmark avg.

9) pittsburgh

2) denver

1) minneapolis

0% 3 6 9 12 15

9.2%

12.0%

10.1%

12.6%

6.0%

5.1%

% housing vacancy | 2012



ducation is a barometer of a region’seconomic viability and the prospects of the peoplewho live there. Residents with a basic education arefound in impressive numbers among southwesternPennsylvanians. Where the region falls short is in

the number of those who’ve built on that foundation.Few regions have a higher rate of residents with at least a

basic education than the Pittsburgh Metropolitan Statistical Area(MSA). For years, it’s had one of the lowest rates of residentswho’ve failed to earn a high school diploma among thePittsburgh Today benchmark regions.

Trends in high school graduation rates suggest that is notlikely to change anytime soon. Those rates have generallyimproved across southwestern Pennsylvania in recent years.Nearly 8 in 10 school districts in the Pittsburgh MSA are gradu-ating at least 85 percent of their seniors on time, PennsylvaniaDepartment of Education data suggest.

The number of Greater Pittsburghers who earn a collegedegree following high school is less impressive. The overallPittsburgh MSA population fares poorly when compared withother benchmark regions in several related categories, includingpercent of residents with some college and percent of those witha bachelor’s or higher degree.

There is evidence suggesting the number of degree-holdingresidents will rise in coming years. In more than 73 percent ofpublic school districts in Allegheny County, for example, at leastseven in 10 high school graduates were heading to college lastyear, according to state Department of Education data. In 61percent of districts, at least 80 percent of graduates were college-bound. The highest rate was in the Upper St. Clair School

E

District, where 95 percent of graduates were college-bound.The lowest was in Wilkinsburg, one of the most impoverisheddistricts in the county, where only 3.2 percent of high schoolgraduates headed to a two- or four-year college.

Overall educational attainment data also mask the fact thatsouthwestern Pennsylvania has one of the highest rates of youngadults with a bachelor’s degree or higher. Some 48 percent ofthe 25-to-34-year-olds in the region have at least a bachelor’sdegree—a rate surpassed only by Boston and three other regionsin the country, 2010 Current Population Survey data suggest. n

0% 10 20 30 40 50

14) cleveland

12) pittsburgh

15) detroit

2) denver

1) boston

39.9%

43.0%

30.5%28.5%

28.3%

data source: U.S. Census Bureau, American Community Survey, 2013; (1-year estimates for 2012)

attained bachelor’s degree (or higher) | 2013

EDUCATION

0% 20 40 60 80 100

15) richmond

14) charlotte

2) pittsburgh1) minneapolis

92.2%93.2%

87.5%

87.3%

data source: U.S. Census Bureau, American Community Survey, 2013; (1-year estimates for 2012)

attained high school degree (or higher) | 2013



uvenile court JudgeDwayne Woodruff sees theworst of the problem. “By thetime kids get to me they’vemissed 50, 60, 80 days of

school,” he says. It’s a common threadrunning through the Allegheny Countycases over which he presides, regardlessof whether the student is delinquent orin need of protective custody due toabuse or neglect.

Unfortunately, it’s a problem affect-ing a population far larger than studentspassing through Juvenile Court. Chronicabsenteeism—missing at least 10 per-cent of the school year for any reason—is an issue in every school district insouthwestern Pennsylvania, the stateand the nation. And it often has seriousconsequences. Studies and local data

suggest that student performance dropssharply when students miss 18 or moredays of school, dimming their futureprospects, particularly their chances ofgoing to college.

“What we’re finding based on ourresearch is if kids want to pursue a yearor two of college they need to be attend-ing 95 percent of the time. They shouldbe missing no school at all,” says PeterLavorini, project manager of career andcollege readiness for the PittsburghPublic Schools.

The good news is chronic absen-teeism has become an issue of commu-nity concern in Allegheny County, whereschool attendance is being addressed inways ranging from long-standing truan-cy prevention programs to emergingstrategies involving school districts, the

courts, human services providers andphilanthropic organizations.

a hidden population

Schools in Pennsylvania and mostother states are not required to trackchronic absenteeism, and most don’t. Asa result, a comprehensive picture ofchronic absenteeism remains elusive.

Traditionally, attendance has beenmeasured in two ways: average dailyattendance and truancy; neither ade-quately identifies students who arechronically absent, which studies sug-gest is a better measure of risk.

Average daily attendance, whichPennsylvania schools must report, is thetotal days of attendance for all studentsin the school divided by the number ofdays in the school year. Such an averagemasks individual attendance and doesn’treveal how many students miss a signifi-cant number of days for any reason.

Truancy is based only on unexcusedabsences; a student with three is consid-ered a truant in Pennsylvania.

The scope of the absenteeism prob-lem in a large, urban school district isevident in an attendance analysis of thePittsburgh Public Schools performed bythe Allegheny County Department ofHuman Services, which maintains a datawarehouse that contains human servicesdata, court records and, most recently, agrowing body of school-related informa-tion. It found that 23 percent of stu-dents missed at least 10 percent of the2011-2012 school year—the same yearthe district was credited with 91 percentaverage daily attendance on itsPennsylvania Department of Educationreport card.

The data also show why attendanceis such a concern for the Department ofHuman Services: 58 percent of studentswho missed at least 20 percent of theschool year are in the human servicessystem. And those involved in publicwelfare, mental health services and childwelfare were the most likely to miss atleast 10 percent of school days.

Attendance mattersallegheny county targets chronic school absenteeism

By Julia Fraser

J


>>

School attendance and neighbor-hood patterns are uneven. Dense clus-ters of chronically absent students existin Crafton Heights, the Hill District,Homewood and Mount Oliver. Many ofthe absenteeism hot spots are neighbor-hoods with public housing.

But it’s not necessarily where stu-dents live or demographic factors suchas poverty that matter most, saysLavorini. “What seems to be more of afactor is the school itself. So, you’d lookat [Faison Elementary in Homewood]and you’d imagine their chronic absen-tee rate would be much higher than it is.But they have made a very concertedeffort to work with HomewoodChildren’s Village, they have strongteacher leadership teams, and the princi-pal there has really taken this on. Theyhave a much lower chronic absentee ratethan some of the schools that look verysimilar.”

Students miss many days of schoolfor a variety of reasons, including issuesoutside of school: illness, homelessness,being in the child welfare system,domestic violence exposure and caringfor a younger sibling. In school, bullyingand unmet needs for special educationor other support affect attendance. Butwith chronically absent kids, it’s usuallya combination of factors.

“We wish it was just one issue—thatthere’s a kid and he’s not going to schoolbecause of transportation and that’s it,”says Judge Woodruff. “But with themajority of these kids there’s three orfour different reasons.”

Students in the human servicessystem miss school for a variety of oftenoverlapping reasons, including poverty,being in the child welfare system, chang-ing schools, juvenile justice involvementand being too old for a grade, accordingto human services analysts. “We look ata number of factors, but we’re really try-ing to group them to identify studentsmost at-risk for chronic absenteeismand to inform interventions. Forinstance, is it students living in poverty

who’ve changed schools during the aca-demic year, that are most likely to bechronically absent?” says Emily Kulick,manager of external partnerships in theDepartment of Human ServicesDivision of Analysis, Research andEvaluation.

serious implications

In the Pittsburgh Public Schools,chronically absent students are muchless likely to have grade point averagesof 2.5 or higher than more regularlyattending students. And the moredays missed, the wider the achievementgap. Of students who missed at least 20percent of the school year, only 19 per-cent had a GPA of 2.5 or better.Conversely, of students who missed 5percent or less of the year, three quar-ters achieved a GPA of 2.5 or better.

Among the more troubling findingsis the link between absenteeism and vio-lence. High rates of absenteeism exist incity neighborhoods with some of thehighest numbers of homicides andshootings. From 2003-2011, about 15percent of homicide victims aged 25 andyounger had at some point attended citypublic schools. Their average absen-teeism rates were more than twice ashigh as those of other high school stu-dents.

Attendance is particularly importantto the futures of the youngest students.A University of Chicago Consortium onChicago School Research study reportsthat preschool students who attend reg-ularly are significantly better preparedfor kindergarten and ultimately havebetter attendance as they get older.

“From what we know, the strongestpredictor of chronic absence for the cur-rent year is chronic absence from theprior year. It makes sense that thosehabits tend to continue,” says KenSmythe-Leistico, assistant director ofthe University of Pittsburgh Office ofChild Development, which several yearsago introduced the Ready FreddyProgram to improve kindergarten

enrollment and attendance in city publicschools. “What we try to do is start offon the best habit possible at the verybeginning. We targeted the kindergartenyear because we know that kids that arechronically absent in kindergarten areon a path.”

In the city public schools, fewerthan half of kindergarten students whomiss at least 10 percent of the schoolyear earn scores of proficient or higheron their third-grade PennsylvaniaSystem of State Assessment reading test.By comparison, 74 percent of studentswho attend kindergarten more regularlyearn proficient or better scores, theDepartment of Human Services analysissuggests.

new strategies emerge

As awareness of such outcomes hasincreased, so too have strategies toreduce absenteeism, including severalAllegheny County partnerships. Thecollaborations include a workgroupwithin the Children’s RoundtableInitiative to address truancy and a newattendance campaign, Be There,launched last year by the United Way ofAllegheny County.

Another is Focus on Attendance, apilot program for reducing absenteeismin King PreK-8 and Manchester PreK-8,two city public schools where the ratesof students receiving human servicesand chronic absenteeism are among thedistrict’s highest. With Department ofHuman Services staff, the program mon-itors attendance, identifies issues, rein-forces the importance of attendancewith parents, and arranges support serv-ices for students and families, if needed,when a troubling attendance pattern isdetected.

In some cases, solutions can be assimple as helping families establish“morning and night accountabilityschedules,” including setting theiralarms or cell phones to wake up intime for school, and other steps, such as

>>

Attendance matters


laying out school clothes at nightand knowing how long it takes forthem to walk to school, saysCarlena Jenkins, the program’sschool outreach specialist.

With so many studentsinvolved with human services,improving communication betweenthe school and human services staffworking with students is importantin resolving absenteeism issues.

“Number one is to know if ourkids are missing as early as theabsences start happening,” saysSamantha Murphy, Department ofHuman Services educational liai-son. “Number two, to know exactlywho to talk to. One difficult thingfor school staff is that they don’tknow which services their kids andfamilies are involved with. Some ofthe confusion with child-servingworkers (probation, child welfare)is they don’t know who to connectwith within the school about achild. If it’s a discipline issue, is itthe principal? If it’s a bullying issue,is it a counselor?”

An evaluation of the Focus onAttendance program’s first yearfound that nearly half of the stu-dents improved attendance by anaverage of 10 percent. And studentswho improved their attendancesaw their GPAs rise by an averageof one-half point.

But finding a solution to anissue as broad in scope and complexas chronic absenteeism will requirethe commitment of more than theschools, says Judge Woodruff. “Weneed a village response. We needeveryone—business owners, more‘block watchers.’ They see a kidduring school time, they need topick up the phone and say, ‘Hey,your kid’s not in school today.How come?’” n

Julia Fraser is a Pittsburgh Todaystaff writer and research specialist.


TOMORROW


It’s been well documentedthat today’s economy empha-

sizes flexibility in the face of ever-changing conditions in the workplace.Education remains the best opportunityfor a more secure future for our region.Western Pennsylvania’s colleges anduniversities are a tremendous assetand a major driver of the new knowl-edge-based economy. A workforce thatis well educated will be the key toremaining flexible and being able toadapt rapidly to unforeseen changes

as they arise.

— SuzanneMellon,President CarlowUniversity

“

I believe Pittsburgh’s “Eds and Meds” will expand and be evenmore important in the future, continuing to create quality jobs

and lead the infusion of entrepreneurial energy. As one small exampleof the indirect benefit, many of our new faculty have chosen to livedowntown, adding to the vitality of the city as consumers and patronsof cultural offerings. In broader economic terms, the universities con-tinue to attract billions of dollars from outside the region, especiallyin research funding, which directly impacts the regional economy.

— Gerald D. Holder, Ph.D., US Steel Dean of Engineering Swanson School of Engineering of the University of Pittsburgh

“

Innovative enhancements to our educa-tional system must always be a regional

priority. Sixty years ago, Pittsburgh establisheditself as a leader in using media creatively—bylaunching a single, all-educational, public televi-sion channel. That spirit still lives in our region’steachers, students, parents and schools. Let’swork together to discover the full potential of aneducational system that includes free, universallyavailable educational content for children,families and teachers—not from a single broad-cast channel—but from television, radio, online,interactive, and mobile technologies. Educationalexcellence is just a click away!

— Deborah L. Acklin, President and CEO WQED Multimedia

Cultural assets representa tremendous opportunity

to build the stature and brand ofthe Pittsburgh region. As a culturaldestination, Pittsburgh outshinesmany other cities. From our muse-ums to our theaters to our ballet,opera and symphony, Pittsburghcan be more fully positioned as acultural destination city. Add to thisthe comparatively uncongestedairport; Pittsburgh is accessibleand affordable. We look forward toworking with our colleagues inbusiness and the arts to get astrong message out that Pittsburghis a place to come to be inspired.

— Harris N. Ferris,Executive Director Pittsburgh Ballet Theatre

“

“


outhwestern pennsylvania is home totwo major hospital networks, top specialists and clinics,a ranked medical school and more insured residentsthan most other regions—all of which make it a placerich in the resources necessary to treat disease. But

taking steps to prevent disease is something people in the regionneed to work on, new health data suggest.

The Centers for Disease Control recently revised its BehavioralRisk Factor Surveillance System in ways intended to get a morerepresentative picture of health across the country. The first set ofdata from the new survey offers a few surprises, not all of whichare encouraging.

Smoking, for example, is more widespread than previouslyreported. More than 23 percent of Pittsburgh MetropolitanStatistical Area (MSA) residents said they were current smokersin the latest survey, which was done in 2011. That’s up from 17.2percent reported in 2010, the year before the CDC revised itssurvey method. The recent Pittsburgh MSA rate of smokers ishigher than both the national average and the average amongPittsburgh Today benchmark regions.

And the rate of overweight adults in the region is also higherthan previously reported.

Not all of the news regarding the battle to control our waist-lines is bad. The rate of obese adults in the region is lower—27percent compared to the 35.7 percent rate the CDC found the yearbefore it revised its survey. And the rate of adults who maintain ahealthy weight is higher than the national and benchmark averages.

A slightly lower rate of adult diabetes in the region is alsoreported in the latest survey data.

But on measures of physical activity, residents of thePittsburgh MSA are found wanting. Fewer than 1 in 5 spend atleast 150 minutes a week on aerobic and strengthening exercise.

S

About half participate in more than 150 minutes of aerobicactivity per week, but that rate still falls below both the nationalaverage and average among benchmark regions. n

0% 5 10 15 20 25 30

14) detroit

benchmark avg.

15) indianapolis

u.s. avg.

2) denver

21.2%

21.9%

25.8%

26.4%

17.6%

1) boston 17.2%

10) pittsburgh 23.3%

data source: Centers for Disease Control and Prevention; Figures are for U.S. Metropolitan Statistical Areas (MSA)

% of population who smoke | 2011

15) boston

10) pittsburgh

16) cleveland

benchmark avg.

2) kansas city

35.4%

35.5%

37.4%

38.2%

33.8%

1) detroit 32.1%

0% 5 10 15 20 25 30 35 40

u.s. avg. 35.7%

data source: Centers for Disease Control and Prevention; Figures are for U.S. Metropolitan Statistical Areas (MSA)

% of overweight adults | 2011

14) indianapolis

u.s. avg

15) charlotte

benchmark avg.**

2) pittsburgh87.5%

82.1%

80.9%

80.3%

90.1%1) boston 93.1%

0% 20 40 60 80 100

% insured adults | 2011

data source: Centers for Disease Control and Prevention; Figures are for U.S. Metropolitan Statistical Areas (MSA); **2010 U.S. average

diabetes rates among adults | 2011

14) richmond

benchmark avg.

15) detroit

5) pittsburgh2) minneapolis

8.5%9.0%

10.8%

11.6%

7.1%

1) denver 6.5%

u.s. avg.** 9.2%*

0% 2 4 6 8 10 12

data source: Centers for Disease Control and Prevention; Figures are for U.S. Metropolitan Statistical Areas (MSA); **2010 U.S. average

HEALTH


outhwestern pennsylvania’s environmental profile is complex. The air is muchcleaner today than during the region’s smoky industrialpast—but not clean enough to meet federal standardsfor one of the most common pollutants. Our rivers

and streams offer an abundance of fresh water at a time when theworld is getting thirstier by the day. Yet, the precious resource isthreatened by a host of contaminants, including runoff from over-taxed municipal sewage systems.

How southwestern Pennsylvanians view such issues cameinto focus in 2013 with the findings of the Pittsburgh RegionalEnvironment Survey, which Pittsburgh Today conducted with ourcolleagues at the University of Pittsburgh Center for Social andUrban Research.

More than 800 southwestern Pennsylvania residents wereinterviewed for the survey. The results provide the most compre-hensive profile to date of the environment-related behaviors ofresidents and their perspectives on issues ranging from localwater quality to global climate change.

Some 65 percent of residents, for example, see air quality asa minor problem or not a problem at all. Such perceptions are insome cases at odds with local air quality data. While annual meas-ures of fine particulate pollution have fallen to within acceptablefederal levels, the region still fails to comply with standards forground-level ozone, a common pollutant better known as smog.

More residents are worried about water: 67 percent see pollu-tion in rivers and streams as a severe or moderate problem. Andthey have reason to be concerned. State Department ofEnvironmental Protection data suggest 6,561 miles of streams inthe region are impaired by acid from dormant mines, farm runoffand other contaminants. In Allegheny County, sewage runoff

S

results in high bacteria levels in rivers that on average claim morethan half of the recreational season each year—an issue that hasprompted $3.5 billion in proposed infrastructure improvements.

The survey also reveals a regional population that generallysees climate change as a problem, but is divided on whetherhuman activity or a natural warming cycle is to blame. Most takesteps to curb their energy use, unless that means driving less.More support natural gas drilling in the Marcellus Shale thanoppose it, as long as it’s not done in state parks. And most feelthey share responsibility for solving environmental problems, buthave little chance of making a difference. n

The Pittsburgh Regional Environment Survey report and datatables can be viewed at: pittsburghtoday.org/The_Pittsburgh_Regional_Environmental_Survey.html

ENVIRONMENT

0 3 6 9 12 15

liberty clairton**

st. louiscincinnati-hamilton

philadelphia-wilmingtoncleveland-akron-lorain

indianapolispittsburgh/beaver valley

detroit-ann arborbaltimore

washington, d.c.

12.6

10.5

11.1

11.5

12.7

13.0

13.4

13.4

13.5

14.7

data source: U.S. Environmental Protection Agency, Design Value Reports, Office of Air Quality Planning & Standards (2010-12); **Classified by the EPA in 2009 as a special “non-attainment area” within Allegheny County.

small particulate air pollution | 2010–12(Calculated as a 3-year average; annual PM2.5 concentration could not exceed 15 micrograms per cubic meter to comply with National Ambient Air Quality Standards)

0 .02 .04 .06 .08 .10

15) baltimore

14) philadelphia-wilmington-atlantic city & washington, d.c.

12) pittsburgh beaver valley

2) buffalo-niagara falls

1) boston-manchester-portsmouth

.082.075

.070

.087

.093

data source: Environmental Protection Agency, Design Value Reports, Office of Air Quality Planning & Standards (2010–12)

ozone | 2010–12(a 3-year average of the 4th highest daily maximum 8-hour ozone concentration.To comply with National Ambient Air Quality Standards for 2010-12, the ozone concentration could not exceed .08 parts per million)

parts per million

1) denver

2) boston

4) pittsburghbenchmark avg.

14) indianapolis

15) detroit

128

122

10961

30

12

0 30 60 90 120 150

data source: U.S. Green Building Council

green buildings | 2012


or years the wellpads, truck traffic and logosof energy companies large andsmall multiplied across coun-ties like Washington and

Greene as southwestern Pennsylvaniabecame a poster child for the rush toextract natural gas trapped in theMarcellus Shale.

It was in such a climate that theregion recently assumed a new identityas a place where efforts to stake a middleground in the polarized debate overdrilling and environmental protection areseen as so advanced that they’re drawinginterest from regulators and elected offi-cials from countries as far away asKazakhstan.

A group of energy companies, envi-ronmental nonprofits and foundationsknown as the Center for Sustainable

Shale Development (CSSD) emergedfrom two years of closed-door negotia-tions last March to announce they’dagreed on voluntary standards thatraise the bar on protecting the air andwater in communities where drillers oper-ate. And unlike industry best practices,they coupled the standards with a certifi-cation process that audits a driller’s com-pliance. The idea is to promote state-of-the-art environmental practices through-out the Appalachian Basin shale play withthe hope that drillers who earn certifica-tion will gain a competitive edge that willprovide an incentive for others to followsuit.

It’s been applauded and criticized.Much of the attention has focused onthe fact that a group of unlikely partnersbridged the partisan divide to reach aconsensus on environmental standards

for shale gas drilling, rather than on whatthose standards specifically require certi-fied drillers to do.

CSSD partners have implied thatthe first set of environmental standardsrequire certified drillers to raise theirpractices above the floor set by stateand federal regulations. A PittsburghToday review of those standards andPennsylvania law finds that to be general-ly true.

team of rivals

The idea of finding a group of compa-nies and environmental nonprofits willingto look for ways to reduce the environ-mental risks posed by shale drilling hadbeen explored three years ago inPittsburgh by the Heinz Endowments

Shale gas & the environmentpittsburgh emerges as an arbiter in the polarized debate

by Jeffery Fraser

F




with little success. John Hanger had bet-ter luck. The former state Department ofEnvironmental Protection secretary andone-time director of Pennsylvania’slargest environmental nonprofit drew onhis sense of who might be willing to takeon such a task and recruited four majorenergy companies with shale gas opera-tions and five local, state and nationalenvironmental nonprofits as partners inwhat is now CSSD.

The partners include energy produc-ers CONSOL Energy, EQT, Chevron andShell. Two national environmental non-profits, the Environmental Defense Fundand Clean Air Task Force, signed on withthe Pennsylvania Environmental Council,Citizens for Pennsylvania’s Future, andthe Group Against Smog and Pollution, aPittsburgh-based grassroots organization.The Heinz Endowments and WilliamPenn Foundation are involved as philan-thropic partners. And the advisory boardincludes former U.S. Secretary of theTreasury and Alcoa Chairman and CEOPaul O’Neill and former U.S.Environmental Protection AgencyAdministrator Christine Todd Whitman.

Assembling a team hand-picked fortheir willingness to tolerate divergentpoints of view and rely on science andfacts as guidance rather than dogma andrhetoric proved critical at a time whenpublic debate over fracking was dominat-ed by intransigent voices.

“You had two strong polarities andneither were helpful. In fact, they weredetrimental to finding the best outcomesfor the Commonwealth and region,” saysAndrew Place, director of energy and pol-icy at EQT, who is serving as CSSD inter-im director. “Some on the industry sidewere the proverbial, ‘drill baby drill; stayout of our way, we know what we aredoing.’ On the other side there was,‘these molecules should stay in theground, fossil fuel is not the way to go;’ ‘itcan’t be done, the risks are too great.’None of us felt that was the way thisdebate should go.”

Negotiations were fragile at times,particularly in the beginning. But withengineers and scientists at the table, thegroup was able to deal with drilling-relat-

ed environmental issues as technicalproblems that needed to be solved. “Theright people were in the room,” saysPlace. “Over time, what occurred wasrelationships were built and people putideas forward that they would not havebeen interested in doing or have beenwilling to do if it had been a very publicdebate.”

The result was a set of 15 standardsfor the industry that prescribed practicesintended to better protect air and waterquality. The partners agreed the standardswould be open to improvement and thatstandards addressing other environmen-tal concerns such as terrestrial issues andcommunity impact would be added incoming years.

They also agreed to a certificationprocess requiring drillers who embracethe standards to submit to third-partyaudits to verify their compliance, notunlike that which the Green BuildingCouncil requires developers to pass inorder to earn Leadership in Energy andEnvironmental Design (LEED) certifica-tion for their buildings.

For the companies involved, the stan-dards were seen as a way to lower the risk

of environmental mishaps, help secure a“social license” to develop the abundantshale gas play and assure an uncertainpublic, whose mixed views on drillingwere documented last year in thePittsburgh Regional Environment Surveyconducted by Pittsburgh Today. The sur-vey found that about 79 percent of resi-dents across the Pittsburgh MetropolitanStatistical Area (MSA) believe drillingoffers significant or moderate economicopportunities to the region. At the sametime, 59 percent see it as a significant ormoderate threat to public health and theenvironment.

Few, if any, environmental nonprofitsconsider current drilling regulations suffi-

cient to protect the environment. Andseveral that agreed to join CSSD reportedthat the decision was not without inter-nal debate over the pros and cons. Forsome, reasons for choosing to sit at thetable included the hope of avoiding thehard lessons of the past, such as thosefrom coal mining, which left a legacy oftainted streams and other problems.

“We want to make sure that this timewe have some control of what happensand ride herd on the industry to makesure this is done to the best of every-body’s ability,” says Davitt Woodwell,executive vice president of thePennsylvania Environment Council’ sWestern Region. “Anyone who can’t do itto the best of their ability, shouldn’t bedoing it.”

And the reality of what’s taking placein the hills and valleys of southwesternPennsylvania added urgency to the idea ofaddressing the risks while waiting forslow-moving regulations to catch up.“Whether you support drilling, areabsolutely opposed to drilling, or aresomewhere in the middle, you have toacknowledge the industry is here, rightnow,” says Joe Osborne, the Group

Against Smog and Pollution’s legal direc-tor. “You can’t ignore the impact it’s hav-ing, regardless of how you think thingsought to be in an ideal world.”

interest, praise & scorn

CSSD drew worldwide attentionalmost immediately. In Paris, announce-ment of its standards created a buzz atthe International Energy Agency meetingon unconventional natural gas last March.And throughout the year, CSSD officialshosted delegations of regulators, electedofficials, journalists and others from

>>

a pittsburgh today analysis found that several cssd standards

advance environmentally protective practices well beyond

what is called for in state and federal regulations.

Austria, Britain, China, Canada, France,Germany, Kazakhstan, Ukraine and theEuropean Union who traveled toPittsburgh to learn about the standardsand the process that led to them.

Editorial writers from Pittsburgh toDallas applauded the launch of CSSD. TheWashington Post, for instance, describedit as a “heartening breakthrough in thewar over fracking.” On the other hand,several environmental nonprofits notinvited to negotiate the standards criti-cized those who were, suggesting theirinvolvement amounted to capitulation toan untrustworthy industry.

The Sierra Club, the nation’s largestgrassroots environmental organization,took issue with the fact the standardsdon’t carry the weight of law. “Voluntarycertification is akin to slapping a Band-Aid on a gaping wound,” wrote DebNardone, director of its Beyond NaturalGas campaign.

The nonprofit Public AccountabilityInitiative was more personal, document-ing how several CSSD partners and boardmembers have industry ties ranging fromseats on corporate boards to investmentsin energy companies. In a report, the non-profit described CSSD as a “greenwash-ing” campaign, implying that its standardsare more of a marketing ploy than anattempt to advance environmental prac-tices in shale gas drilling. The report, how-ever, offered no evidence that the non-profit had actually evaluated the merit ofthe CSSD standards.

tougher, for the most part

Pittsburgh Today compared the 15CSSD air and water standards toPennsylvania and federal regulations thataddress environmental issues related tounconventional natural gas drilling. Bothare rife with complexities. It is notuncommon, for example, for a singleCSSD standard to have several parts thatprescribe multiple practices, timetablesand specifications.

Each of the 15 standards was found torequire CSSD-certified drillers to take

some degree of protective action not pre-scribed by state or federal law. How signif-icantly those practices rise above an oper-ator’s legal obligations varies across stan-dards.

Some CSSD standards are similar toexisting regulations, save for a measure ortwo that can have environmental impor-tance. One example is the standard forearthen impoundments that store waterdischarged during drilling that’s fouled bychemical additives, brine and other con-taminants. Like CSSD, Pennsylvania hasdesign requirements that include doublelining the impoundments. But unlike thestate, CSSD also requires operators toremove hydrocarbons from the waterbefore it is stored and to take steps to pre-vent wildlife from entering the impound-ment.

CSSD standards also prohibit dis-charging drilling wastewater into streamsand rivers, allowing no exceptions. Zerodischarge is generally promoted byPennsylvania regulations. But under statelaw, public water treatment plants can,under certain circumstances, acceptwastewater, which some have done, raisingcontroversy and concern over public watersupplies.

Some similarities are also seen inCSSD standards and state regulationsrelated to how drillers deal with the con-taminated water discharged when a well isbeing drilled and afterward. Both call fordrillers to identify strategies for reducingwastewater. But CSSD requires a recyclingplan, and CSSD requires drillers to recycleat least 90 percent of their wastewater.Such practice reduces the amount of freshwater consumed in the hydrofracturingprocess, which is measured in the millionsof gallons. State regulations don’t requiredrillers to recycle their wastewater.

Regulations tend to be moving tar-gets, and recent changes have blunted theimpact of one CSSD standard that waswritten earlier. That standard places limitson emissions from compressor enginesused to push gas through pipelines after awell has gone into production. Whilethose limits are more stringent than feder-al rules, Pennsylvania’s revised regulationsare, in some instances, more demanding.

But several CSSD standards advanceenvironmentally protective practices wellbeyond what is called for in state and fed-eral regulations.

One is the approach taken towardprotecting groundwater. Before drilling,the CSSD standards require companies toestablish an “area of review” that includesthe vertical and horizontal legs of a welland to perform an analysis to characterizethe geology below. That includes lookingat whether the subsurface confining layerscan prevent fracking fluids from migratingin unintended ways. It also includes iden-tifying orphaned wells, faults or other vul-nerabilities that might pose a problem.State regulations don’t require drillers toperform such geological risk analyses.

Operators who are CSSD-certifiedalso must monitor streams, aquifers andother water sources within a 2,500-footradius of the wellhead for at least one yearafter the well is drilled and show that thequality and chemistry of the water meas-ured before drilling hasn’t been adverselyaffected. State law doesn’t require opera-tors to take such steps to see if their wellsimpact local water sources.

CSSD emissions standards for thediesel engines used in drilling and in theheavy trucks hauling fresh water and con-taminated water are more restrictive thanthose which operators are legally requiredfollow. Diesel engines are prolific sourcesof fine particles that contribute to smog,which is of growing concern in areaswhere drilling is concentrated.

At least 95 percent of a CSSD-certi-fied driller’s truck fleet, for example, mustmeet the most stringent federal emissionsregulations within three years. The stan-dard applies to both new and existingtrucks, including those bought before2007, which could account for a largeshare of an operator’s fleet. Federal lawexempts those older trucks. And federallaw prohibits Pennsylvania and otherstates from regulating them on their own.

moving forward

Before leaving CSSD to begin hisPennsylvania gubernatorial campaign,

>>

Shale gas & the environment


Hanger expressed hope the standardswould encourage more effective envi-ronmental practices within the industry,derail the argument that such higherstandards cannot be met by the indus-try, and, through market pressures,require companies to earn certificationin order to drill in the AppalachianBasin states.

Whether that will come to passremains to be seen. It took the betterpart of last year for CSSD to piecetogether its certification process,including protocols for selecting andtraining the auditors who’ll monitorcompliance. Their audits are expectedto include both documentation reviewand field inspections.

Sometime in 2014, the first compa-nies to seek certification are expectedto undergo compliance audits. Thosepresumably will be the four CSSD cor-porate partners: CONSOL, EQT, Shelland Chevron Appalachia. How manymore will follow is unclear, as is theextent to which CSSD is supportedwithin the shale gas industry.

The region’s largest shale gas tradegroup, the Marcellus Shale Coalition,hasn’t endorsed CSSD, which is notmentioned on the group’s website or onits list of the positive industry develop-ments of 2013. And the group did notrespond to interview requests to clarifyits position on CSSD.

But the notion that CSSD stan-dards could create market demand fordrillers to adopt its standards got anearly and unexpected boost inSeptember when Allegheny Countyadded several of the standards to itsrequest for proposals to extract gasunder Deer Lakes Park. “I think it’sdoing the right thing,” says AlleghenyCounty Chief Executive RichFitzgerald. “Everything is on a case-by-case basis. But we’d like to set a baselinewhere, if we can get some of theseenhancements, it could be a templatefor doing it in other areas—not justpublic land, but private land as well.” n

Jeffery Fraser is Pittsburgh Today’ssenior editor.


TOMORROW


A newentrepreneurial spirit is rising in Pittsburgh,from local start-ups to innovative giantslike Google and Disney. As we continue todiversify our economy—which remains ourbiggest challenge—the region needs toborrow from the culture of these innovatorstheir willingness to take risks and fail. Atthe same time we need to continue tocultivate the managerial talent that isnecessary for start-ups to grow to becomethe next Google and Disney.

— Gregory G. Dell’Omo, PhD, PresidentRobert Morris University

We’ve heard a lot recentlyabout air pollution in the

Pittsburgh area. One weekend inJanuary, the air in the Mon Valleywas just as dirty as in Beijing,with impacts to the East End andbeyond. Pittsburgh is a world-class city being recognized for itslivability, high education levels,and innovative economy. Wenow have the opportunity to use our world-class resources to improveour air quality—and ensure a healthy and strong future for our region.

— Dr. Deborah Gentile, Director of Research, Division of Allergy, Asthma and ImmunologyAllegheny Health Network

“

We need to do a better jobof explaining to the public

the simple physics, chemistry, andeconomics in utilizing natural gas.For example, five million gallons ofwater are needed to frack a well,which ends up being 2½ inches ofrain. It turns out that, because of thechemical reactions involved, burningthe natural gas from one well willproduce 10 times the water used tofrack it. And those who heat with nat-ural gas are paying half of what theywould have otherwise!

— Ron Muhlenkamp,Founder and Portfolio ManagerMuhlenkamp & Company, Inc.

“

City government needs tobecome a catalyst for young

entrepreneurs. The city should becomea one-stop shop that guides entrepre-neurs toward financing and tax abate-ment programs, creates a searchableonline database of affordable City- andCounty-owned properties, and con-nects entrepreneurs with localresources. We should create a small-business incubator space that offerslow rents and technical assistance,fostering a collaborative business envi-ronment that will spawn even moregreat ideas and innovations, enhanceneighborhood quality, bring in new cityresidents, and broaden our tax base.

— Daniel Gilman, Councilman Pittsburgh City Council

“

“


0 100 200 300 400 500

13) detroit

12) kansas city

benchmark avg.

2) boston

1) pittsburgh132.3

76.4

259.8

387.6

450.4

data source: FBI Uniform Crime Reports

motor vehicle theft | 2012(rate per 100,000 MSA population)

Southwestern Pennsylvania is also a place where people setdown roots, which leads to stability, limits transients, and pro-motes stronger connections among neighbors and other formsof social control. Nearly 90 percent of residents have lived in theregion for longer than 10 years and 80 percent have lived herefor longer than 20 years, according to their responses in thePittsburgh Regional Quality of Life Survey done by theUniversity of Pittsburgh Center for Social and Urban Researchand Pittsburgh Today. n

’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 2012

0

200

400

600

800

506.3398.5


burglary rate trends | 2003–12benchmark avg.pittsburgh

’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 2012012345678

5.4

4.2


murder rate trends | 2003–12benchmark avg.pittsburgh

hen pittsburgh rises to the topof various “best places to live” lists—as it doesmost every year—one indicator usually men-tioned is the region’s relative safety as measuredby crime rates. The latest data suggest public

safety will continue to be described in glowing terms.Crime rates in the seven-county Pittsburgh Metropolitan

Statistical Area (MSA) fell across every major category excepthomicide, which was up slightly. Still, the Pittsburgh MSAhad the fifth lowest murder rate among the 15 PittsburghToday benchmark regions in 2012, the most recent year forwhich FBI Uniform Crime Index data is available.

Southwestern Pennsylvania ranks even better in othermajor crime categories. It has the lowest rates of theft andof motor vehicle theft among those benchmark regions, aswell as the second lowest rates of forcible rape, robbery andburglary.

As a rule, crime is higher in cities than in regions, andPittsburgh is no exception. The City of Pittsburgh, however,has seen a sharp drop in crime in recent years and its rates ofmajor crimes fall below the average among core cities in thePittsburgh Today benchmark regions.

Crime rates are influenced by many social and economicfactors. And several characteristics associated with safer neigh-borhoods and regions are found in southwestern Pennsylvania.Its diverse economy, for example, helped it weather the pastrecession and navigate the sluggish recovery better than mostregions. It hit record employment in 2013. It has the highestrate of residents with a high school diploma among bench-mark regions. And in recent years, greater numbers of mostlybetter-educated young adults have moved into the region.

WPUBL IC SAFETY


14) milwaukee

benchmark avg.

15) denver

5) pittsburgh2) charlotte

0 20 40 60 80 100

48%57%

78%

81%

44%

1) st. louis 40%

poor road quality | 2011(% of roads that are mediocre or poor)

data source: www.tripnet.org

aintaining bridges, roads andhighways is critical to economic vitality. However,Pittsburgh has struggled to do that maintenancein recent years. And the same can be said of theregion’s public transit system.

Pennsylvania adopted a long-awaited transportation spend-ing plan in 2013 that is expected to provide $2.3 billion toimprove infrastructure and keep public transportation systemsviable. Recent data and studies suggest the investment is sorelyneeded.

The Federal Highway Administration reports that 24.4percent of Pennsylvania’s bridges are structurally deficient—thehighest rate in the nation. And bridge conditions in southwest-ern Pennsylvania, a region of bridges, mirror those reportedstatewide.

Nearly a quarter of the bridges throughout the seven-countyPittsburgh Metropolitan Statistical Area (MSA) are structurallydeficient. Allegheny County has the greatest number in thatcondition, while Fayette County has the highest percentage ofstructurally deficient spans.

Roads and highways are another challenge. Almost half ofthe roads in the Pittsburgh MSA are in mediocre or poor condi-tion, according to Federal Highway Administration data. That’sa high rate by any measure. Yet it is lower than the nationalaverage and lower than the average rate of poor or mediocreroads found among Pittsburgh Today benchmark regions.

Poor road conditions cost motorists in the Pittsburgh MSAan estimated $432 a year in repairs and maintenance, accordingto the most recent data generated by the Highway Developmentand Management Model, the most common method of calculat-

M

ing the impact of road conditions on vehicle operating costs.Additional dollars from the new state transportation plan

are expected to ease another pressing regional problem—thesteady decline of public transit in the urban core in recentyears.

Chronic budget crises led the Port Authority of AlleghenyCounty—the region’s largest carrier—to pare the number ofbus routes from 219 to 102 over the past six years. Furtheradjustments led to 430 fewer stops. Lack of ridership hasn’tbeen the issue: The Pittsburgh MSA is one of the biggest con-sumers of public transportation among Pittsburgh Todaybenchmark regions. n

0 10 20 30 40 50 60

14) philadelphia

8) pittsburgh

15) boston

benchmark avg.

2) milwaukee

38

3948

53

28

1) kansas city 27

annual delay per traveler | 2011(average hours lost to road congestion)

data source: Texas Transportation Institute, Urban Mobility Report

0 20 40 60

91

66

91

3710

10

6

1) boston

2) washington, d.c.

3) philadelphia

8) pittsburgh17) kansas city

18) detroit

19) indianapolis

80 100

data source: U.S. Department of Transportation, American Public Transportation Association 2012 Fact Book (data from 2011)

unlinked passenger trips per capita | 2011(number of public transit trips people take per year in relation to a region's population)

9

TRANSPORTAT ION


he port authorityof Allegheny County’s chronicfiscal crisis was lifted with thestroke of the governor’s pen inNovember to the relief of

downtown businesses, seniors, regionaldevelopers, people with disabilities and—although they might not realize it—subur-ban commuters who prefer their cars overa Port Authority bus or light rail transit.

An estimated $2.3 billion a year inadditional state money for roads, bridgesand public transit was secured with thelong-awaited transportation-funding billsigned by Pennsylvania Gov. Tom Corbett.The Port Authority’s share had not beenprecisely determined by the end of the

year. But it is estimated to be enough toend the annual operating deficits that ledto deep service cuts in recent years, andallow the Port Authority to tackle mainte-nance and capital projects, serviceimprovements, and modernization strate-gies neglected during the rolling fiscal cri-sis.

For two years, a disparate group ofAllegheny County stakeholders rangingfrom corporate executives to advocates ofthe poor and disabled had campaigned torestore public transit. They painted a con-vincing picture of the vital role it plays inurban counties like Allegheny, where PortAuthority buses and trains carry nearly 65million passengers a year.

fueling the economic engine

One high-profile example of why pub-lic transit is important to Pittsburgh andAllegheny County is its impact on thelocal economy as a means of moving work-ers to and from their jobs and as an assetfor convincing companies to expand or torelocate there.

And it’s an issue of statewide impor-tance. Only Philadelphia tops Pittsburghas a center for jobs and a generator of taxrevenue in Pennsylvania. “We have thesecond and third largest economic centersin the state [Downtown and Oakland],both of which don’t survive without tran-sit,” says Chris Sandvig, regional policydirector of the Pittsburgh CommunityReinvestment Group.

An estimated 54 percent of theDowntown Pittsburgh workforce relies onpublic transit to get to work. An estimated120,000 people commute to Downtown

Transit’s new erastate plan improves outlook for urban counties and commuters

by Jeffery Fraser

T



daily, most from outside of the city.“What a lot of people don’t realize is

that, while the population in the city hasmigrated out over the last 50 years, thejobs have not. Pittsburgh has one of thehighest jobs-to-population numbers inthe country,” says Ken Zapinski,Allegheny Conference on CommunityDevelopment senior vice president forenergy and infrastructure.

“We can do this downtown becausewe have transit bringing people in. Thereisn’t enough space for vehicles to drivethem downtown and park during the day.There isn’t enough space to keep the jobsdowntown if you don’t have a robusttransit system.”

Vince Sands, chairman of BNYMellon of Pennsylvania, underscored thepoint, telling the state HouseAppropriations Committee last summerthat a viable transit system in Pittsburghis a key factor in the bank decidingwhether to keep more than 7,000 jobs inthe city, expand the number or move jobselsewhere. “Fifty percent of our peopledepend solely on public transportation. Iwant to make it clear: This is reallyimportant to us. We have to get our peo-ple to work.”

Public transit also has emerged as acritical issue in attracting young adults,who bring with them their talents andfuture families—a demographic trend insouthwestern Pennsylvania that’s been onthe rise in recent years.

When in 2011, for example, theAllegheny Conference polled some 200young adults identified by their employ-ers as emerging leaders about their priori-ties, viable public transportation was farand away the top issue mentioned. Andwhen Pittsburgh Today hosted a series offocus groups with young adults a yearlater, public transit was the top concernmentioned in every session.

beyond business

Just as job density is high in urbancenters such as Allegheny County, so toois the density of low-income families,

>>

The biggest obstacle that Isee for our region—and I’m

going to sound like a broken record—ispublic transportation. We face a crisisin moving people on every scale.Moving within the city is difficult dueto a broken bus and rail system, andtraveling around the country is difficultwith a severely underutilized airport.It’s holding back what is otherwise aregion well suited for remarkablegrowth.

— F. Dok Harris, Principal Harris | Wukich

“

Improving transportation, particularly by continuingour efforts to obtain more direct airline service and by

expanding public transportation, is critical. Making it easier totravel to and from the Pittsburgh region for visitors and residentsalike creates new business opportunities, fosters a more robusteconomy, stimulates a more diverse population and enhancesthe ability to attract and retain employees. Improved access totransportation also allows us to promoteour excellent quality of life and businessenvironment.

— Patricia L. Dodge, Managing PartnerMeyer, Unkovic & Scott LLP


TOMORROW


“

Read more “future thoughts” throughout the report >>

As Pittsburghers, we’re alwaystalking about our Downtown,

what’s good, or what could be better. ForJane Jacobs, the journalist who literally wrotethe book about what makes a city great, it’s

all about thriving neighborhoods, andDowntown is surely that. Can it be bet-

ter? Of course, and it is certainly on itsway! Jacobs said a strong neighbor-hood is one that attracts people to itat all times—not just nine to five. Soas a university that makes its homeDowntown, let’s do all we can to grow

and support what makes this hectic,exciting and sometimes messy destina-

tion a great neighborhood.

— Paul Hennigan, President Point Park University

“


people with disabilities, students andseniors—all of whom are among themost frequent users of public transit.

Last year, for example, the UnitedWay of Allegheny County polled peoplewho called its “211” regional helpline toget a better idea of their healthcareneeds. More than one-third identified

transportation as a barrier to getting tocare. Another United Way survey ofregional human service agencies rangingfrom Catholic Charities to the Women’sCenter and Shelter of GreaterPittsburgh suggests 60 percent of theirclients depend on public transit to getto services. “For many people, publictransit is a lifeline,” United Way ofAllegheny County President RobertNelkin told the state Senate Committeeon Transportation in August.

More than 6,000 seniors and peoplewith disabilities use ACCESS para-tran-sit vans each weekday, according to PortAuthority 2012 averages. For them, sta-ble funding for the Port Authority isgood news. ACCESS routes are based onPort Authority bus routes, which expos-es seniors and people with disabilitiesto service reductions when those busroutes are trimmed.

The impact of Port Authority busand rail services is also felt beyond theborders of Allegheny County. Park-and-ride lots offer one measure. Licenseplate numbers on the 5,500 cars parkedin those lots each weekday show that, onaverage, 26 percent belong to people inother counties, with the most living inWashington and Westmoreland. Some 58percent of cars parked in the 248-space

Alpine park-and-ride in Monroevillenear Murrysville, for example, are regis-tered to Westmoreland County resi-dents.

Public transit even makes life easierfor motorists who never take a bus or atrain to commute to jobs located inPittsburgh or Allegheny County. TheSouthwestern Pennsylvania Commission

showed why with a chilling analysis ofthe impact a proposed 35 percent cut inPort Authority service would have had ifthe state and county hadn’t come upwith an 11th-hour plan to avoid it.

The transit cuts would have added23,400 more car trips to Pittsburgh-arearoads and highways each day. That wouldhave meant an estimated 16-minuteincrease in peak period travel time inPittsburgh. But the biggest headachewould have been downtown, where 90percent of the 38,000 parking spacesare already taken. That would leave3,800 spaces for some 20,000 additionalvehicles.

improved outlook

Such a scenario is no longer in theforecast for the Port Authority. Thestate transportation bill, which is to befinanced with a hike in the oil companyfranchise tax, is expected to provide thePort Authority with enough new moneyto avoid the annual operating deficitsthat had dogged it in recent years. Andwithout such deficits, the threat of serv-ice cuts is greatly diminished.

Port Authority fares also are expect-ed to stabilize, which officials say should

help restore ridership damaged by serv-ice cuts. Those cuts began in 2007 afterproposed tolls on Interstate 80 tofinance transportation across the statefailed. Since then, the Port Authority hasreduced the number of bus routes from219 to 102 and raised fares several times.Its $2.50 base fare is the highest in thestate and among the highest in thenation.

The austere years also forced thePort Authority to get its fiscal house inorder. Its workforce was trimmed.Pensions and other legacy costs werebrought under control. Inefficientroutes were pared from the schedule.Data and performance measuresassumed a more prominent role in deci-sion-making. At the same time, however,maintenance of rail bridges, garages andother infrastructure was deferred andsteps to modernize the system slowed.

Adequate and more predictablefunding now allows the Port Authorityto address its maintenance backlog andconsider improvements, includingadding service to overcrowded routes,offering modern bus stations with real-time data on when buses will arrive, andcreating transit hubs where riders ofbuses from other counties can transferto Port Authority buses to completetheir commute into the city.

“It’s a new Port Authority,” saysEllen McLean, Port Authority CEO.“We’re leaner, more efficient and we’veaddressed our legacy costs. It’s nowabout finding smart ways to effectivelyoffer transit.” n


>>

Transit’s new era

“we have the second and third largest economic centers

in the state [downtown and oakland], both of which

don’t survive without transit.”

— chris sandvig, regional policy director,pittsburgh community reinvestment group


data source: County Business Patterns, U.S. Census Bureau; Figures are for U.S. Metropolitan Statistical Areas (MSA)

arts establishments | 2011(per 100,000 population)

d

20.5

14.1

13.010.8

9.1

19.2

15) detroit

14) cincinnati


2) denver

1) minneapolis

0 5 10 15 20 25

olstered by the steady support oftheir patrons and local philanthropies, the more than300 arts and cultural organizations that call south-western Pennsylvania home have emerged as amajor attraction and a significant contributor to the

region’s economy. Measured by the number of art and culture establishments

alone, the Pittsburgh Metropolitan Statistical Area (MSA) rankseighth among the 15 Pittsburgh Today benchmark regions with306. But a closer look at the data finds it among the top fiveregions in the number of theaters, dance companies, musiciansand artists, and museums and botanical gardens.

The data also suggest the region’s arts and culture organiza-tions have an economic impact that belies their numbers, pour-ing an estimated $686 million into the local economy each year,according to “Arts and Economic Prosperty,” the most recentstudy from Americans for the Arts.

Such estimates rank the economic impact of southwesternPennsylvania’s arts organizations at the top of the GreaterPittsburgh Arts Council’s set of benchmark regions, whichincludes the likes of San Diego, St. Louis and Baltimore. Theregion also ranks first in that competitive set in tax revenuegenerated by the arts, which the latest estimates suggest isaround $74 million a year.

Arts and culture organizations in the Pittsburgh MSAemploy nearly 4,000 people, which is less than the averageamong Pittsburgh Today benchmark regions. But in employ-ment per capita, the Pittsburgh MSA’s rate of 169 arts andculture workers per 100,000 residents ranks third highest.

Historically, foundation support for the arts has been

B

strong. Arts organizations in the Pittsburgh MSA rank third ingrants received among Pittsburgh Today benchmark regions.Another local financial lifeline is money from the Regional AssetDistrict’s half of the revenues generated by a 1 percentAllegheny County sales tax. The record $92.2 million RADbudget approved for 2014 represents a $1.5 million increase infunds allocated to community assets that include libraries,parks, and arts and culture organizations. n

9,365

4,247

3,9931,614

1,605

9,251

15) charlotte

14) richmond


2) philadelphia

1) boston

0 42 thousand6 8 10

total arts employment | 2011

data source: County Business Patterns, U.S. Census Bureau;Figures are for U.S. Metropolitan Statistical Areas (MSA)

ARTS & CULTURE


1.11

1.13

1 .241.27

1.28

1) richmond

2) kansas c ity

12) pittsburgh14) denver

15) boston

0.0 0.3 0.6 0.9 1 .2 1 .5

travel time | 2013(a traffic congestion measure index which shows the difference between the time it takes on a “normal” trip, and the average “commute” on the same highway)

data source: Texas Transportation Institute, Urban Mobility Report (released in Feb. 2013 using data from 2011)

nergy-saving light bulbs. Health care.Livable-wage jobs. Fresh water. Sustainability hasmany faces. At its core, it is about investing in aprosperous future by promoting behaviors andpractices that bolster the economy, protect the

environment and address social equity. In southwestern Pennsylvania, challenges ranging from

legacy environmental issues to local government fragmentationpromise to keep the architects of sustainability busy for decades.

At the same time, the region boasts a stable economy and awell-documented capacity for public-private collaboration thatover the years has helped resolve some the thorniest social andeconomic problems.

The region’s challenges are complicated and entwined. ThePittsburgh Metropolitan Statistical Area (MSA), for example, hasthe second-lowest cost of living and lower-than-average unem-ployment among the 15 Pittsburgh Today benchmark regions.But 12.1 percent of its population lives in poverty, a rate that isbelow the benchmark average but is still considered high. Andmore than 10 percent of housing in the region stands vacant.

More people are moving into the region than are leavingand the majority of them are young adults who bring theirfuture families with them. But southwestern Pennsylvaniaremains the least diverse of the benchmark regions with whitescomprising 86 percent of the population. It continues to strug-gle to attract and retain foreign-born immigrants.

The quality of the air has improved from the region’s smokyindustrial days. Annual levels for fine particulate pollution havedipped to within federal limits, for example. But levels of ozonepollution continue to exceed prescribed limits. The region’s

E

rivers and streams, fed by ample rainfall, offer an abun-dance of fresh water. The challenge, however, is findingways to reverse a century of poor stewardship of the region’swaterways and better protect the critical resource. n

1) boston 79

2) philadelphia 74

3) minneapolis-st . paul 69

4) pittsburgh & baltimore

5) st. louis & milwaukee

6) denver 60

9) cincinnati 59

10) cleveland 58

11) richmond 51

12) detroit 50

13) kansas c ity 38

14) indianapolis 37

15) charlotte 34

data source: The Walk Score, 2013

64

61

walkability | 2013(a scale between 1-100, based on walking routes to destinations such as grocery stores, parks, schools, restaurants and retail)

All errands require a car

0-19Most errands require a car

20-49Some errands can be accomplishedby foot

50-69Most errands can be accomplishedby foot

70-89Daily errands do not require a car

90-100

0 20 40 60 80 100

detroit

philadelphia

indianapolis

cincinnati

milwaukee

cleveland

denver

pittsburgh

baltimore

st. louis

charlotte

boston 82.176.4

81.776.781.0

76.280.8

75.980.6

75.380.5

75.179.9

74.879.6

74.279.0

74.878.5

73.278.4

71.478.0

72.2

male female

age

data source: University of Washington, Institute for Health Metrics and Evaluation, 2013; Estimates are based on 2010 data.

life expectancy | 2013

SUSTAINABIL ITY


ithin threeblocks on Pittsburgh’sNorth Shore standPNC Park, the Pirates’gem of a ballpark; The

Warhol, the largest museum dedicatedto artist and native son Andy Warhol;and the aluminum and glass corporateheadquarters of Alcoa, employer of61,000 people worldwide. A better snap-shot of the engines driving the region’ssurging tourism industry would be hardto find.

Southwestern Pennsylvania as atravel destination has never been morepopular. The evidence includes recordamounts spent by visitors on everythingfrom lodging to entertainment, a spikein new hotels on the books, and steadyfive-year growth in hospitality andleisure industry jobs.

The business traveler has long beenthe chief driver of the region’s tourismeconomy and still is. But recent yearshave seen Pittsburgh mature to some-thing more than a strong Monday-through-Thursday market.

“It has now become a regional desti-nation for a lot of social venues, whetherit’s sports, the arts, education, history,”says Kevin Kilkeary, president ofProspera Hospitality, a Pittsburgh-basedhospitality management company.

“If you look at the most dominanthotel markets—Manhattan, Boston,Miami, San Francisco—they have astrong combination of corporate andrelated business and they have strongsocial venues that attract people. That’swhat is happening here.”

What Pittsburgh isn’t, however, is adestination that consistently attractsbig-ticket conventions drawing upwardsof 10,000 visitors who pour tens of mil-lions of dollars into the local economyper event.

The city has the venue to do so inthe David L. Lawrence ConventionCenter, with its distinctive sweepingroof, environmentally conscious designand convenience to sports stadiums,riverfront parks and the Downtown cul-tural district. But it lacks the kind ofhotel-room density near the convention

center that those who stage largenational conventions seek.

That has proven to be a decided dis-advantage when bidding against a highlycompetitive field of cities built to hostsuch events. And finding ways to tap thelatent potential of the convention busi-ness is one of the region’s challenges asit looks to continue to grow its tourismeconomy.

booming business

Whether they are corporate clients,sports fans, consultants, convention-goers, casual vacationers or MarcellusShale land men, visitors mean money tothe region’s retailers, hotels, restaurants,bars, entertainment venues and others.And visitors have spent a lot of moneyrecently.

They added more than $8.5 billionto the economy of the seven-countyPittsburgh Metropolitan Statistical Area(MSA) in 2012, according to the mostrecent economic impact data reportedby Tourism Economics. That was thebest year to date, up 5.8 percent over theprevious record of $8.1 billion set theyear before. The region’s top travel des-tination is Allegheny County, where visi-tors spent $5.5 billion in 2012.

Whether the region can sustainsuch trends depends on a host of fac-tors, not the least of which will be thestrength of the local economy. Itsresilience during the recent recessionand sluggish recovery was widely noted,particularly within the hospitality indus-try, which appears confident it willremain healthy.

Two new hotels opened their doorsin 2013 and another nine are planning toopen in the city and nearby suburbs inthe next few years, solidifying theregion’s standing as one of the hottesthotel real estate markets in the country.

That’s an encouraging sign for thefuture prospects of regional tourism.Unless visitors plan to bunk with friendsor relatives, they need a place to stay.

Value in visitorspittsburgh’s growing tourism industry still misses the big ones

by Jeffery Fraser

W


>>


And the more available rooms and hoteloptions a region has to offer them, themore widely attractive it becomes as adestination.

Hotel development decisions tendto be based less on indicators such asdemographics than on primary industrymetrics, such as occupancy rates, aver-age daily room rates and revenue peravailable room. And southwesternPennsylvania’s numbers have impressedin recent years.

Key hospitality rates have risen inPittsburgh over the past five years whilethey’ve stagnated or fallen in severalmajor cities in the Northeast. The rev-enue per available room in the regionstood at more than $75.50 late in 2013,up nearly 15 percent since 2008. Theaverage daily room rate rose 11 percentto $112.40 during those five years. Andthe Pittsburgh MSA’s 67.2 percent occu-pancy rate is the highest among 15benchmark regions tracked byPittsburgh Today.

Those closely watched rates are pro-jected to continue to rise in the south-western Pennsylvania market through2017 —even with the arrival of newhotels and hundreds of additionalrooms. Revenue per available room, forexample, is expected to reach $89, andoccupancy rates could reach 69 percent,according to a recent forecast publishedby hospitality research firm PKF.

“Demand is very high right now.Rooms are at a premium,” says CraigDavis, president and CEO ofVisitPittsburgh. “As new inventorycomes into the marketplace, it’s alwaysbeen the case that it is absorbed.”

As the hotel market grows in num-ber, the options available to accommo-date the various lodging preferences ofvisitors and the prices they are willing topay are expanding, which strengthensthe region’s appeal. Even the boutiquemarket is being explored. The Klimptonchain, for instance, chose DowntownPittsburgh as the site of its latest HotelMonaco, with eclectic décor, wine hourand yoga mats in rooms. And the

YMCA in East Liberty is being remod-eled as a new Ace Hotel by the hip,Portland-based boutique chain thatdescribes its hotel offerings as a “col-lection of individuals—multiple andinclusive, held together by an affinity forthe soulful.”

Missing from the list of new arrivalssoon to open or proposed is the long-coveted, high-capacity convention cen-ter hotel that event planners believewould make the region a stronger candi-date when bidding for the large nationalconventions that too often elude it.

latent potential

When looking for sectors of thetourism trade with the potential to sus-tain or improve the growth trend ofrecent years, one that stands out is theconvention business, which has recentlybeen less than robust.

Whether it’s been dismal or simplylackluster is a matter of debate thatdepends on the metrics used to measureit. Attendance and the total number ofevents held each year at the David L.Lawrence Convention Center werelower in 2012 than in 2004, the first fullyear it was open, according to the latestdata available from SMG, which man-ages the center.

On the other hand, the most recentVisitPittsburgh data available suggestdirect spending from major eventstotaled $118.2 million in 2012. That’sabout 32 percent more than what event-goers contributed to the local economyeight years earlier. The number of hotel“room nights” filled by those attendingmajor events also rose in the same peri-od from 108,000 to 134,014.

It’s clear from the numbers, howev-er, that business generated by the con-vention center has ample room to grow.One of the reasons it hasn’t is that largeconventions staged in the city have beenfew and far between. A big reason why isthe lack of sufficient peak-night hotelrooms close enough to the conventioncenter to win those events for which thecompetition is fierce.

And that’s been costly.VisitPittsburgh, which tracks missedbusiness opportunities, estimates that610,227 hotel room nights have beenlost since 2004 primarily due to the lackof a mega-hotel or ample peak-nightroom density near the convention cen-ter.

The kind of large event the city canoptimally accommodate is one thatrequires up to 2,400 rooms on peaknights. Larger gatherings require morecreative plans, which can mean scatter-ing convention goers across the city andperhaps the suburbs, as well as having tonegotiate with more than a dozenhotels. “The convenience factor is big,”says Davis. “It may not be a deal-break-er, but that’s where you’re at a competi-tive disadvantage.”

Some organizations have been will-ing to work around such inconvenienc-es. Many have not. When the NationalAssociation of Black Engineers held itsconvention in Pittsburgh in 2012, itneeded to negotiate contracts with 18hotels to accommodate the 8,500 mem-bers who attended. They ended up con-tributing $15.2 million into the localeconomy and consuming 14,270 roomnights, according to VisitPittsburghdata.

The American Legion needs a mini-mum of 3,000 peak-night rooms for itsnational convention, which draws about10,000 members and their families. ThePittsburgh area, which has one of thelargest veteran populations in thenation, last hosted the convention in1993. “It was a good convention, butthey did have us spread all over theplace,” says Mike Walton, chairman ofthe American Legion NationalConvention Commission.

Pittsburgh has since failed to win abid to have the Legion return, and inad-equate peak-night hotel rooms near theconvention center has been an issuewhen bidding against cities likeIndianapolis, which hosted the conven-tion in 2012 and has four conventioncenter hotels. “A big plus for a city ishaving a major hotel attached to theconvention center,” Walton says. “It’s

Value in visitors


>>

more convenient. Our delegateswouldn’t have to go as far and itmakes our job easier.”

The David L. LawrenceConvention Center was designed toaccommodate such a hotel, whichwas to be built on plots straddling the10th Street Bypass. But the demandof developers for up to $50 million ingovernment subsidies is the chief rea-son those plots are used as parkinglots today.

New hotel development inDowntown has also given pause tothe notion of building a major con-vention center hotel. “We need to seewhat the effect of the new rooms willhave on the marketplace,” says Davis.“Measuring that, we’ll go from there.But we have to keep growing.”

For some, cities such as Austin,Texas, offer hope that a conventioncenter hotel in Pittsburgh is not aquestion of if, but when. Austin hastwo 1,000-room convention hotels indevelopment after years of havinglost bids for major events due to thelack of rooms near its conventioncenter. Those hotels are largely beingdeveloped with private dollars andtax incentives.

Among the key factors that con-vinced private money to back theprojects were the steep growth thatAustin’s tourism economy has experi-enced and upbeat projections thatrevenue per available hotel room anddemand for those rooms will contin-ue to rise. Although Pittsburgh’s indi-cators haven’t risen as sharply asAustin’s in recent years, Pittsburgh isalso seen as an up-and-coming traveldestination. Moreover, its revenueper available room is currentlygreater than Austin’s and is expectedto rise along with occupancy andaverage daily room rates. “It’s hap-pening for us,” says Prospera’sKilkeary. “Sooner or later that con-vention center hotel will happenhere.” n


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