With populations that have already boomed and that are expected to grow more in the next 25 years, Lehigh Valley communities such as Bethlehem are seeking ways to create more affordable housing opportunities.
City officials discussed some of those strategies at the Lehigh Valley Planning Commission’s Comprehensive Planning Committee monthly meeting Tuesday. With Bethlehem’s industrial heritage, Mayor J. William Reynolds told the committee, the city has been a haven for people of all economic backgrounds, but the housing market in recent years has changed drastically.
“Affordable housing is not only a moral imperative, but also is an economic necessity for creating stable and thriving communities in the city of Bethlehem,” Reynolds said. “We have added approximately 30% more jobs in the past two decades, but we’ve only added about 5% more housing, which means that the demand to live in the city is increasing. Economic opportunities are increasing, but there’s not necessarily a place to live, and you see that not just in our affordable housing communities.”
Reynolds said people who want and can afford to live in the Valley still can’t find a place to live and this is especially the case in Bethlehem.
“When you talk to our biggest employers in the Lehigh Valley, the biggest institutions, they say we need housing at every level,” he said. “I know the Lehigh Valley Planning Commission talks about this a lot. People are moving to the Lehigh Valley, and people with resources are going to move to the Lehigh Valley, even if they don’t have their dream home. What they’re doing though is when they’re moving here is they’re finding a place to live and that is depressing the market because there is a lack of supply. Obviously there is a lot of housing that’s in the pipeline, but it is not enough to meet the demand of the people that are moving to Lehigh Valley.”
The latest numbers from the Greater Lehigh Valley Realtors, released Tuesday, found that housing inventory slipped 30.9% over the month with 643 units in October for Lehigh and Northampton counties. With inventory still not at sufficient, comfortable levels, the report said, the median sales price increased 4.9% to $310,000.
Reynolds said that he is working with other mayors, including Allentown’s Matthew Tuerk and Easton’s Sal Panto Jr., to mobilize on a more regional level.
“It’s going to take all our partners,” he said.
Sara Satullo, Bethlehem’s deputy director of community development, who made the main presentation to the committee, said a surprising finding was the number of young professionals who can’t find their own place to live.
“These are individuals that can’t afford to move out of their parents homes and they have jobs that I think historically would be considered to be paying the strong starting salaries,” she said. “Which I think is why we’re starting to see more and more people talk about housing affordability.”
Room for more? 첥Ƶ examines the Lehigh Valley’s affordable housing crisis
What Bethlehem is doing
A person spending more than 30% of their income on housing is considered cost burdened, while extreme cost burdened is when that level reaches 50%. About 1 in 5 households in Bethlehem are at the latter point, Satullo said.
While the city’s median household income is $62,146, a renter would need to earn at least $50,000 annually to afford a one-bedroom apartment, or $100,000 to afford a home. About 26% of households in the city earn less than $35,000 a year.
“Obviously there is a large gap between what our residents are earning and what they can afford,” Satullo said.
That is why tackling rental housing will be a priority, officials said. Vacancy rates in Bethlehem are at 2%, while a healthy inventory is normally 7%-8%. Satullo said the city would need more than 1,000 new units to get to that range, most of them for low-income households.
Those looking to rent will not only have to be patient, but also have a superior credit score and a flawless background check, along with a hefty deposit.
“If we don’t have more growth in our housing that is going to constrain our growth,” Satullo said. “We want to leverage our available funding to maximize our impact, prioritize projects that target the greatest need and help the most people and create an environment that really encourages innovation in the case of housing. We really need to be thinking and planning regionally as a Lehigh Valley. What we do in the city of Bethlehem is going to affect other communities and vice versa.”
One strategy is encouraging variety in housing types for developers by tweaking zoning ordinances.
“We think probably the most impactful strategy is going to be updating our zoning and land use,” Satullo said. “This is not going to be a full overhaul, but we’re going to be updating it to encourage a variety of housing types and infill development of affordable housing.”
For instance, the northern part of Bethlehem has many single-family homes and a handful of apartment buildings, but no townhome developments which are prohibited by zoning.
“We want to find the communities that can support it, and then find ways to incentivize it,” Satullo said. “By-right (affordable housing) development will improve housing affordability by creating a faster and more predictable approval process for developers where they know if they’re proposing a project that it’s going to be able to get through in a short period of time as long as they meet the requirements. That gives them more reliability and lower costs.”
The city could also partner with organizations such as Lehigh University, which is developing alley housing designed by architecture students and constructed by workforce development training programs through Community Action Lehigh Valley. Landlords would be required to keep the units affordable for at least 20 years.
Another program is to offer incentives to preserve affordable housing. Satullo noted that Bethlehem has not built an affordable housing project since 2014.
“So we are using some of the money that the City Council has allocated for affordable housing as American Rescue Plan Act funding to design a revolving loan and grant funds that would target medium- and large-scale affordable housing projects,” Satullo said, adding that it could be complicated as developers are dealing with higher interest rates.
The design of the fund won’t be complicated by the interest rates, rather the higher interest rates means there is a higher need for gap financing to make affordable housing projects feasible.
Landlord incentives are another option to help renters bridge the gap between things such as Section 8 vouchers and market rates.
“We’re looking at designing a program that could help tenants bridge the gap between the voucher and the market rate,” Satullo said, adding the cost would make it a temporary solution.
Other programs include working with major industries such as health networks and other industries to partner in providing affordable units for workers that are closer to their place of work; investments in housing rehab and a first-time homebuyers program; and eviction protection and rental assistance programs.
The city has heard from citizens, who like the ideas, but implementing them may be hard without a regional approach.
“They want us to be able to mandate affordable housing development or stop landlords from raising rents,” Satullo said. “These are things that we don’t have authority under state law to do. So we’re going to be working and pushing for state level changes and some of the laws governing tenant rights. We are going to be sitting at a table making regional housing planning a priority and we’re willing to go to any community and share this presentation and get them started talking about affordable housing.”
Morning 첥Ƶ reporter Evan Jones can be reached at ejones@mcall.com.
