ALLENTOWN, Pa. — City officials unveiled a plan Thursday to combat skyrocketing housing prices that have made the Queen City increasingly unaffordable for most of its residents.
Thanks to the fallout of the COVID-19 pandemic and an existing shortage of housing stock in the Lehigh Valley, home prices in the city have jumped 63% in the last five years, according to a new study released by the city Thursday. Rents have ballooned 44% over the same period. The trends have led to an increased risk of homelessness, the report found.
While much of the nation is grappling with rising costs for essentials like food and shelter, the problem is particularly acute in places like Allentown. Most of its households earn low to moderate incomes that are less able to absorb the steeper expenses, the report found. And because the city is almost entirely developed, there are limited opportunities for developers to create new housing to address the shortage.
Mayor Matt Tuerk and Director of Community and Economic Development Vicky Kistler said the city must take a multipronged approach to encourage the construction of more residential units, keep existing residents in their homes and improve the existing stock of apartments. Considering that homelessness increased 18% nationwide in 2024, the stakes cannot be higher, Tuerk said.
Urgent work to be done
"We don't have time. This is urgent work that must be done," he said at a news conference at City Hall.
The 98-page report called on officials to embrace several initiatives to tackle the housing crisis. The plan recommended the creation of a first-time homebuyers' program, founding an eviction diversion program and establishing a municipal housing trust fund.
It also recommended that city officials explore legal options, such as whether cities have the authority to cap rent increases. The practice is legal in New Jersey, but it's unclear if Pennsylvania municipalities have the same power, the report found.
Other efforts — such as revamping the city's zoning codes, streamlining the city's building permit process and partnering with the Allentown Redevelopment Authority to acquire more properties — are already underway. Kistler said the city has about 1,000 vacant lots and 1,800 vacant homes that could present opportunities to add needed housing units to the market.
The report found that the typical rent for an apartment in Allentown is $1,687 a month. It also determined that households should not spend more than 30% of their income on housing to cover other expenses such as food, clothing and utility bills. At those rates, an Allentown household would need to earn more than $67,000 a year to afford to live in the city; however, the actual median income is just under $54,200 a year.
The situation is even more dire for lower-income families. Julio Guridy, executive director of Allentown Housing Authority, said his organization is working to construct more affordable housing units but has not been able to keep up with demand.
"We have 15,000 people on the waiting list for public housing and vouchers. It is very difficult to do this," Guridy said.
To make inroads, the city needs to leverage its funding to ensure aging housing units are rehabilitated and that vacant units wind up back on the market, Kistler said. While it will be a slow, perhaps block-by-block process, it's the only way for the city to make consistent inroads.
"It's going to be expensive. It's going to be difficult. It's going to be exciting, but it's going to be tedious," she said.
Tuerk said his administration will work with City Council to establish a housing trust fund that would allow the city to finance affordable housing projects. City residents passed a referendum question last November that allowed the city to raise its deed transfer tax, presenting a possible funding source for the effort.
"I think our primary responsibility — the priority at this point — is to build new housing and to preserve existing affordable housing," he said.
It's unclear how much help may be available from the federal government. The city is already receiving $7.7 million from HUD to remove household hazards such as lead and asbestos from low-income housing units. Acquiring further funding would likely entail going through a competitive grant process.
The housing crisis is being felt across the region; the Lehigh Valley as a whole needs about 9,000 more housing units in the market, Kistler said.
The shortage is contributing to steeper prices, leaving local families less able to cover expenses such as transportation, child care and medical care. A 2024 survey by the United Way found nearly half all households in Carbon, Lehigh and Northampton counties struggled to cover all their basics.
