Bethlehem
Locality: Bethlehem, Pennsylvania (USA)
City Population: 77,617 (2022)
Metro Population: 873,555 (2023)
Plan Title: Opening Doors: Strategies to Build Housing Stability in Bethlehem
Date of Plan: Fall 2023
Date of Case Study: April 2024
May 6, 2024
Substantive highlights
Bethlehem, Pennsylvania, is a city of over 77,000 in the Lehigh Valley region. As Bethlehem’s housing plan describes, the city was home to Bethlehem Steel, one of the country’s most prominent steel plants, until it closed in 2001. Before the 2000s, the Bethlehem population remained stable and housing was generally affordable, but the city began experiencing population growth starting in 2000. Growth accelerated during the COVID-19 pandemic as new, higher-income residents moved to Bethlehem, drawn to remote work or retirement in a city with a relatively low cost of living.
The influx of new residents at a time of rising construction costs drove up home prices and rents in Bethlehem. In May 2019, the median home price in the city was $120,000, but by May 2023 had jumped to $302,000. Rent prices also increased dramatically.
Low-wage workers were the Bethlehem residents deemed most at risk of being priced out of housing. About 22 percent of Bethlehem residents make less than $30,000 a year, but a household needs $50,000 to comfortably rent an apartment there, meaning many renters are cost-burdened.
To help address these issues, Bethlehem developed a plan to promote housing stability. In the summer of 2022, the city began studying existing housing conditions, analyzing data to identify housing needs, and engaging with the community to identify promising strategies. They ultimately produced a formal plan with the following guiding principles:
- Leverage available funding to maximize impact.
- Prioritize resources toward projects that address the greatest housing needs for the greatest number of residents.
- Create an environment that encourages a variety of new housing developments.
- Work with local and regional housing partners to combine resources and collectively plan future projects.
Process
In 2017, Bethlehem started taking steps to better understand its housing market, which helped shape its later strategy. For example, it conducted a blight study in 2017 to quantify the extent of housing in poor condition, which found that only 1 percent of properties —29 in total—were designated as blighted. The city also focused on the Southside Neighborhood, which is close to Lehigh University and home to a concentration of rental housing, making it a popular place for students to rent. To prevent students from driving up rental prices in that neighborhood, the city approved a plan in 2020 put forward by Bethlehem’s Department of Community and Economic Development that restricted where students could live in the Southside neighborhood. In 2021, a delegation from Bethlehem participated in the Housing Solutions Workshop and contracted consultants Reinvestment Fund, Collabo, and Atria Planning to help with research and planning. Two years later, the city released a comprehensive housing plan titled Opening Doors: Strategies to Build Housing Stability in Bethlehem (also called “the Plan”).
During the Plan’s development, the city adopted several public engagement methods to gather input from the community. From October to December 2022, it organized 11 pop-up events in different locations, where it distributed symbolic “money” to 308 residents. The attendees could “spend” this money on the housing strategies they considered the most important. The city also conducted a housing survey in both English and Spanish, administered online and at in-person events, that received 3,219 responses.
In December 2022 and January 2023, the city held four focus groups on housing challenges and potential solutions with housing providers, developers, housing advocates, lenders, community leaders, and other stakeholders. Phone interviews with local elected officials and major employers complemented the focus groups.
Bethlehem also established a Housing Strategy Committee with representatives from nonprofits; community development organizations; and university, hospital, and advocacy groups. In February and March 2023, the city presented 20 proposed housing policies, tools, and programs to the committee and received feedback. This work was done in collaboration with the consulting team, who made recommendations and ultimately authored the Plan.
Local data analysis and stakeholder feedback indicated that renters needed the most housing support in Bethlehem, with 74 percent of the city’s cost-burdened households being renters. Therefore, the Plan prioritizes renters and affordable rental housing, with a secondary focus on homeownership.
Metrics, targets, and implementation
Bethlehem’s Plan consists of 10 programs and policies, each of which it aims to implement at least partially within the next five years. The Plan’s first 1-2 years are reserved for “planning, securing contractors, designing programs, developing policies and procedures, and establishing monitoring requirements.” As of March 2024, more specific monitoring requirements have not yet been established.
The 10 programs and policies in the Plan include the following goals:
- Hire a planning consultant for city ordinance revisions for 1-2 years.
- Hire a technical advisor and potentially another organization to develop guidelines for zoning and technical assistance for ADUs.
- Build 15-30 ADU units.
- Leverage gap financing to build 50 rental units.
- Serve 20-30 households using Section 8 vouchers by incentivizing landlords to accept those vouchers.
- Construct 400-600 new housing units via the HUD Choice Neighborhoods Transformation Plan.
- Provide 50 households with eviction prevention and/or rental assistance services in partnership with local nonprofits.
- Designate one or more representatives from the city to collaborate with other jurisdictions in state-level advocacy.
- Designate one or more representatives from the city to participate in regional planning efforts.
Implementation status
As of March 2024, the Plan is in the very early stages of implementation, and no outcomes are yet available. View a timeline for implementing the strategies and key activities in the Plan.
Coverage of four policy pillars
| Not Covered | Moderate FocusA pillar is a Moderate Focus of a housing strategy when the strategy addresses it, but in a minor or secondary way, such as by including only one policy of modest projected impact from the pillar. | Substantial FocusA pillar is a Substantial Focus of a housing strategy when the strategy includes policies falling within multiple functional subcategories of that pillar or at least one policy projected to have a large impact. | |
| Create and preserve dedicated affordable housing units | ✓ | ||
| Align housing supply with market and neighborhood housing conditions | ✓ | ||
| Help households access and afford private-market homes | ✓ | ||
| Protect against displacement and poor housing conditions | ✓ |
Participating agencies
| No Role | Supporting Role | Leading Role | |
| Bethlehem’s Mayor’s Office | ✓ | ||
| Bethlehem Community & Economic Development Department | ✓ | ||
| Bethlehem City Council | ✓ | ||
| Bethlehem Housing Authority | ✓ | ||
| Nonprofit service providers | ✓ | ||
| Other Lehigh Valley housing departments | ✓ | ||
| Lehigh Valley Planning Commission | ✓ | ||
| Housing Strategy Committee | ✓ |
Policy tools
The Plan includes the following policy tools and approaches:
Update zoning and land use to encourage a variety of housing types and infill development
- Update city zoning.
- Identify locations for by-right affordable housing development.
- Increase development in higher-value neighborhoods.
- Pilot an accessory dwelling unit (ADU) program, including technical assistance for homeowners and ADU builders.
Offer incentives to create and preserve affordable housing
- Create an affordable rental housing construction program.
- Provide gap funding to help developers be competitive for other grants like Low Income Housing Tax Credits (LIHTCs).
- Coordinate new construction with zoning changes.
- Create a landlord incentive program that works with housing choice vouchers by providing gap funding.
Foster partnerships with local housing authorities and institutions to support new housing and community investment
- Create and implement a HUD Choice Neighborhoods Transformation Plan
- Invest in neighborhood improvement and other health, safety, and economic opportunity programs for residents.
- Work with the local housing authority to gain site control of vacant land and buildings to construct affordable housing.
Protect tenants at risk of displacement and increase the supply of deeply affordable rental units
- Work with nonprofits to provide eviction mediation and emergency rental assistance to households at risk of homelessness.
- Increase the supply of deeply affordable units via priority scoring and set-asides in all housing programs.
Advocate for state-enabling affordable housing policies, programs, and regional housing planning
- Advocate at the state level for enhanced affordable housing development resources.
- Coordinate advocacy with other area housing departments and providers.
- Advocate for reform of the State Municipal Code to allow for more affordable housing approaches.
- Advocate for more opportunities to acquire LIHTCs.
- Support and promote regional housing planning.
Income Groups Targeted
| Little/No Focus | Moderate Focus | Substantial Focus | |
| 0-30% AMI | ✓ | ||
| 30-60% AMI | ✓ | ||
| 60-80% AMI | ✓ | ||
| 80-120% AMI | ✓ | ||
| Market Rate | ✓ |
Key policy objectives or issues addressed
Which linkages are addressed
| Health | Education |
Which local funding sources are proposed?
Bethlehem does not have a dedicated revenue source for affordable housing. If funds affordable housing activities primarily through Community Development Block Grants (CDBG) and HOME Investment Partnerships Program (HOME) allocations. Aspects of the Plan will be supported by a $500,000 Choice Neighborhoods grant from HUD and $5 million of American Rescue Plan funding.