Recommendation for Zoning Changes to South Bethlehem Neighborhoods

With the rise in housing prices and the increase in properties sold adjacent to Lehigh University, there is a looming threat that South Bethlehem neighborhoods will be taken over by developers looking to expand student housing. In an effort to preserve the mixed-income neighborhoods that many residents call home, the Southside Vision Housing Committee, a collaborative coalition organized by Community Action Development Corporation of Bethlehem (CADCB), spent the last two years studying new housing trends on the Southside.The committee found that the rise in student housing developments is impacting the makeup of South Bethlehem neighborhoods as the number of owner-occupied homes declines. Therefore, the Southside Vision Housing Committee suggests that city administrators rezone the area in an effort to alleviate the pressure on the housing market of South Bethlehem.

The changes in housing prices along with the current state of renting in South Bethlehem foreshadow an increased difficulty for renters to become homeowners. According to residential property sale data provided by a local realtor in South Bethlehem, there was a 17.7 percent increase in the average price of a South Bethlehem home between CADCB’s two fiscal years from July 2016 to June 2018. Because nearly half of renters use more than 35 percent of their income towards rent, many struggle to save enough money to become homeowners. This drastic jump in property value indicates an upward spiral of costs that can keep Southside Bethlehem renters, who make up 67 percent of the South Bethlehem community, from becoming homeowners. Historically, South Bethlehem has been a place where families could work towards purchasing a home; today, it is much more difficult and expensive to become a homeowner on the Southside.

 The study highlights an increasing trend in purchasing houses to rent them out rather than buying homes for the owner to occupy.  In 2018, only 18.5 percent of the new owners of Southside homes adjacent to Lehigh’s campus were single families; in 2019, only 14.5 percent of new owners planned to live in neighborhood homes. The numbers don’t lie. The properties that are going up for sale are being bought to be rented out. These recent numbers predict a drop in the long term rate of owner occupancy, which will result in a shift in neighborhood culture.

Rows of student housing on Webster St. Photo Credit: Kendall Prime

Currently, Student Housing is regulated by the City of Bethlehem under the Regulated Rental Licensing Program. This program monitors over 484 properties, the majority of which are student housing. Even though student housing is regulated, there is no limit on the amount of rentals owned by a single holder or the locations to the properties. So, this means a developer can buy out an entire block and rent to students, which can lead to plans to demolish these homes to build apartments or townhouses that can hold more students.

  To combat the situation, the Southside Vision Housing Committee brought a number of stakeholders together to discuss a way forward, including residents, city officials, and representatives of Lehigh University.  The partnership of the City, Southside Vision leaders, CADCB staff, and Lehigh University conduct research in order to propose potential policy solutions. The Southside Vision Housing Committee and partners recently suggested rezoning neighborhoods as a means to control the overwhelming rate of development. Rezoning the area has a lot of potential benefits, including protecting the existing neighborhoods from new apartment buildings that disrupt the character of the Southside. Zoning changes also can help define areas of development to divert demands on established communities, and institute minimum distance standards to keep student rental housings from taking over residential neighborhoods. The prospective zoning regulations have the potential to preserve the neighborhoods of South Side and maintain the equilibrium between Bethlehem and Lehigh.

*Feature photo credit: Kendall Prime*

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