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Herbein Blog

26 Jun

Shale Money Helps Meet Housing Needs

Shale Money Helps Meet Housing Needs

Effect of Shale Drilling on Affordable Housing

Gregory Farrell, CPA/ABV, CVA – Herbein + Company, Inc.

While many Pennsylvania Counties have seen a positive economic impact due to Marcellus Shale drilling, one negative side effect has been the downturn in availability of affordable housing. For the first time, some housing authorities are experiencing waitlists, landlords are withdrawing from the Section 8 program and not renewing leases in order to make units available to higher paying gas workers. With average rentals doubling and tripling in some counties in the Northern Tier, homelessness has increased by up to 20%.

Pennsylvania Housing Affordability and Rehabilitation Enhancement Fund
To help turn the tide, the Commonwealth of Pennsylvania decided to designate funds from the Act 13 Impact Fee to support affordable housing in counties that have drilled unconventional wells. The Pennsylvania Housing Affordability and Rehabilitation Enhancement Fund (PHARE) was signed in November 2010 and the first monies were distributed in early 2013. The PHARE Fund is allocated $5 million each year plus excess/spillover funds from local municipalities – making the total distributed for 2013 $7.9 million.

Counties can decide the best way to use their share of the funds as long as they adhere to certain guidelines; at least 30% of the funds must be used for households below 50% of median area income and not less than 50% of funds are to be used in fifth, sixth, seventh and eighth class counties.

Ideally, allocated monies will be used as leverage for other public and private resources – maximizing partnerships committed to addressing housing needs in these communities over a period of years.

Current Projects
Results are already being seen. 25 PHARE applicants in 19 counties were awarded money resulting in plans for 317 new rental units, 166 households with rental assistance, 36 new single family homes, 231 households receiving rental rehab/repair and $120 million in other funds being leveraged.

Regional PHARE funding recipients this year include Washington County – $625,000 for the Washington Trust Building in the City of Washington; Westmoreland County – $125,000 for an owner occupied housing rehabilitation pilot program in Derry, Hempfield, Sewickley, South Huntingdon and Washington Townships; Fayette County – $300,000 for Glen at Three Oaks in Republic; Greene County – $600,000 for Gateway Senior Housing in the Borough of Waynesburg; Beaver County – $300,000 for New Brighton Gateway Revitalization in the Borough of New Brighton; and Butler County – $200,000 for a housing improvement Impact Program for Lancaster, Connoquenesing, Jackson and Forward Townships and another $150,000 for the Landmarks Building improvement program in the City of Butler.

Applications will be accepted annually through the Pennsylvania Housing Finance Agency (PHFA). While there is no limit to the number of applications that an eligible applicant can submit, PHFA will work with applicants to prioritize proposed projects.

Herbein’s experience
At Herbein, our experience crosses both areas – Marcellus Shale and Affordable Housing. We are, therefore, excited to see this new synergy between the two areas creating positive results. For more details on our specific services, visit our affordable housing website page or our energy services website page.

You may also contact the author, Gregory Farrell CPA/ABV, CVA at

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