BETHLEHEM, Pa. — Bethlehem city officials have shared a set of possible affordable housing policies from which they eventually will draw to combat the city’s ongoing housing crisis.
Members of the city’s affordable housing committee will narrow down the large toolbox debuted Tuesday as they determine what strategies are worth city resources.
- Bethlehem officials and their consultants shared a list of policies the city could pursue to make affordable housing more accessible
- The affordable housing strategy committee will decide which policies make sense to implement in the city in coming months
- A final strategy is set for release in late spring
A previous presentation laid out the scope of the city’s housing woes: rental vacancy rates are critically low, nearly a third of residents face housing challenges, and apartments priced at $1,000 or less are effectively gone, studies commissioned by the city found.
Over the past few months, city officials and their consultants have collected input on possible housing policies from residents and stakeholders.
“This helps us put together a package of strategies that we are now beginning to analyze and consider,” said Sara Satullo, the city’s deputy director of community development.
“At this point, we haven't reached the point where we're prioritizing any strategies or gotten into the nitty gritty of what is going to work best in Bethlehem.”
'A package of strategies'
Officials and consultants hired to develop a housing strategy shared a comprehensive set of options the city could take to improve the city’s housing market.
Consultant Rebecca Rothenberg of Atria Planning described a possible partnership with Housing Authority as especially promising.
Housing authorities "are the most natural partner for affordable housing development, because they have a lot of resources through [U.S. Department of Housing and Urban Development] and through their voucher program that can be combined with city and state resources,” Rothenberg said.
Many of those vouchers go unused because landlords won’t accept them.
The authority could, for example, establish a nonprofit development organization to buy and sell land, pursue tax credits and ultimately build new housing. The authority then could accept vouchers in those residences.
Bethlehem also could partner with private companies with strong ties to the city, such as Lehigh University or the valley’s hospital systems, to help house their employees.
Programs in Philly, other areas
In Philadelphia, Temple University partnered with the city housing authority to redevelop sections of the city near campus.
Using money from the university, the authority, tax credits, private developers and federal programs, 500 aging public housing units were replaced with a 1,200-unit mixed use development, including a grocery store, retail space and a health center.
"It just goes to show like how $40 million in [U.S. Department of Housing and Urban Development] funding can then go up to $500, $600 million in investment."Consultant Rebecca Rothenberg of Atria Planning
“It just goes to show like how $40 million in [U.S. Department of Housing and Urban Development] funding can then go up to $500, $600 million in investment,” Rothenberg said.
Across town, the University of Pennsylvania worked with the city and local nonprofits to rehabilitate homes near campus, which then are sold to faculty and staff. The new homeowners take out a traditional mortgage on the property, with the university acting as a guarantor.
A hospital near Cape Cod, Rothenberg said, saw its workforce struggling to find housing they could afford. So hospital leaders used the organization’s nonprofit arm to build apartments on its property.
Other past projects see a sponsor taking a less direct approach — for example, by leasing or donating land on which a nonprofit developer could build. In return, the company might get the right of first refusal for their employees to live there.
Building more
In many cities short on housing, officials are encouraging construction of accessory dwelling units: small, self-contained homes built on the property of an existing (usually single-family) home.
In Bethlehem, that likely would take the form of “alley houses” built in someone’s backyard facing a back alley.
That would produce more housing, greater density, but little impact on the neighborhood’s character, and would be particularly viable in areas with little available land on which to build.
Most are built by homeowners adding onto their property, but some nonprofits collaborate with homeowners to build on their land.
“It's a growing tool for building affordable housing because construction methods have been refined to a point where it's very cost effective."Consultant Rebecca Rothenberg of Atria Planning
“It's a growing tool for building affordable housing because construction methods have been refined to a point where it's very cost effective,” Rothenberg said.
“Manufacturers are able to pre-fabricate so they have economies of scale, and then they ship them out in kits.”
However, that cost efficiency doesn’t necessarily translate to affordable housing, officials said.
“Oftentimes, they're so cute, and they have their own private outdoor space, and they're just a really nice option for people who don't want to live in an apartment,” pushing up rents, she said.
Ways to promote development
The city can promote ADU construction by establishing clear guidelines for the units, partnering with manufacturers to make kits ready for use in the city with minimal approval process, or waiving certain fees.
In Portland, Oregon, city officials collaborated directly with manufacturers to pre-approve a set of designs for the city, reducing the amount of time and money required to get one built.
Low-cost loans are available to finance construction, and homeowners can partner with nonprofit developers to carry out construction.
ADUs aren’t the only option for new development. The city also can encourage “missing middle” housing developments, made up of smaller multi-family homes, rather than a single, massive apartment complex.
Such developments are well-suited to areas where there isn’t much available land on which to build, but are typically less attractive for large developers looking to maximize profit.
Similarly, other cities have pursued tiny home developments, in which very small standalone homes are clustered together.
Subsidies and incentives
Another option would be to provide rent subsidies and incentives to draw developers to the area.
Subsidy money could go directly to landlords, to fill the gap between what vouchers from the Housing Authority pay and what landlords can get on the open market, making accepting vouchers more attractive for landlords.
The city also could provide incentives for developers to build, overhaul or preserve affordable housing.
While incentives have long been part of the housing toolkit, Rothenberg said a red-hot market across the United States has created competition among cities to attract developers.
Incentives can be monetary — such as providing access to grant funds or putting city money toward a project — or process changes that result in savings for the developer, such as reduced permitting changes or a streamlined approval process.
In exchange, the city could attach conditions such as making some units affordable, or a required public input process.
Officials also could establish a revolving loan fund, in which city funds go toward financing new construction. The money ultimately is paid back and lent again.
Next steps
Over the coming months, the city’s housing strategy committee will narrow down things that actually would work in Bethlehem.
Once its work is complete, the committee and city officials will draft a document laying out a cohesive plan to make affordable housing more accessible.
The plan is expected to be released to the public in late spring.
The city first embarked on plans to develop a comprehensive housing strategy last winter, in partnership with a trio of consulting firms: Atria Planning, Reinvestment Fund and Collabo.
