BETHLEHEM, Pa. — The City of Bethlehem will break ground on a large-scale affordable housing rental project late next year after receiving $16 million in highly competitive tax credits.
The project is one of two to receive the credits in the Lehigh Valley out of the six local projects that applied for the funding. A total of $66.5 million in low-income housing credits were awarded to the construction of 1,900 affordable housing units across the state.
Thursday's funds went toward 60 units in the first phase of the Gateway on Fourth. That includes a 44-unit mid-rise building at East Fourth and William Streets and a 16-unit townhome building along East Fifth Street.
Upon completion, the mixed-income development will have 120 units, with over two-thirds of the units charging an affordable rate, and the remaining units will be in line with market rates.
"Bethlehem's first tax credit award in more than a decade is something for our entire city to celebrate."Bethlehem Mayor J. William Reynolds
The total project is estimated to cost $29 million.
Bethlehem Mayor J. William Reynolds referenced the city's affordable housing strategy, Opening Doors, saying it's "about keeping the promise of America and creating opportunities."
"Recognizing we cannot solve our regional housing crisis alone, our administration has been laser focused on building innovative coalitions to bring more attainable and affordable homes into our community," Reynolds said. "Bethlehem's first tax credit award in more than a decade is something for our entire city to celebrate."
The development is made possible through a public-private partnership between the City of Bethlehem, Lehigh Valley Industrial Park (LVIP) and Pennrose, described as "one of the nation's leading affordable housing developers," in a release from the city.
"We are honored to partner with the City of Bethlehem and LVIP to bring the Gateway on Fourth to life," Pennrose Regional Vice President Jacob Fisher said. "This project exemplifies our commitment to creating high-quality, affordable homes that strengthen communities."
The affordable homes will be rented to residents earning between 20-60% of the median income. In the Lehigh Valley, a family of four would need to earn $60,120 annually or less to qualify for affordable units at the Gateway on Fourth, the release said.
Rents will range from $279 for the lowest cost one-bedroom unit to $1,442 for the highest cost three-bedroom unit, the release said.
Construction for phase one is expected to begin in late 2026 and wrap up in spring 2028. Leasing will then begin shortly after.
"We're not just building housing — we're investing in the long-term health and stability of South Bethlehem residents."Pennrose Regional Vice President Jacob Fisher
The Bethlehem project is also among three applicants in the state to receive additional matching dollars through the PHFA's Health for Housing Investment Program.
The housing agency will match the $400,000 investment from the Neighborhood Health Centers of the Lehigh Valley — which will operate the health clinic anchoring the 44-unit mid-rise building.
"By integrating healthcare services directly into the development through our partnership with the Neighborhood Health Centers of the Lehigh Valley, we're not just building housing — we're investing in the long-term health and stability of South Bethlehem residents," Fisher said.
Pennrose plans to apply for more tax credits to go toward the second phase of the affordable housing project.
The Gateway has received just under $2 million from funding secured by State Sen. Lisa Boscola and State Rep. Steve Samuelson. The City of Bethlehem is also putting $3.1 million toward the first phase of the project.
