Lehigh Valley Housing Supply and Attainability Strategy

Projections show a need for more than 54,000 additional units by 2050 -- an annual addition of about 2,000 units -- to accommodate population growth.

The housing shortage is measured by looking at natural vacancy. This refers to the number of empty, available homes that naturally exist in a healthy housing market due to people moving and routine turnover. Generally, a healthy market typically has about 3% to 5% of homes available at any given time. If the number of available homes falls below this range, it means there aren’t enough houses to meet demand, signaling a housing shortage.

On average over the last five years, the LVPC reviewed 5,700 units per year, with local governments approving 2,100 of those units for construction annually.

Developers are rising to the challenge, but not all approved units move forward to construction immediately. The region is slowly working to catch up to a backlog of units while faced with continually growing demand in the market.

Constructing units at a rate of 2,100 per year would achieve those 54,000 additional units by 2050, however at that pace it will also take that long to catch up to the shortage and achieve a balanced market. External forces such as policy changes and more targeted development patterns could expedite our timeline towards alleviating the housing shortage sooner rather than later.

These projections are based on recent trends and are not adjusted for market forces or other factors such as land limitations. They form a baseline of comparison based on the upward trajectory in unit proposals and population growth the region is already on.

External forces such as policy changes and intentional, targeted development patterns could expedite the region's timeline towards alleviating the housing shortage sooner than 2050.

Municipalities are collectively responsible for addressing these challenges to ensure current and future needs are met.

Suburban townships are experiencing a significant housing shortage today, and are expected to experience the most significant increase in demand by 2050. Growing housing demand puts pressure on townships' finite open land, and if allowed to develop in a sprawling pattern, would result in loss of highly valued natural resources and farmlands, increased traffic congestion and higher costs of infrastructure and community services. To accommodate growth, suburban communities have an opportunity to target higher-intensity development in key sustainable areas.

The region's three cities currently have the highest housing shortages as a result of recent growth they have experienced. Urban centers attract diverse populations due to job opportunities and amenities, however cities encounter barriers like high construction costs, limited available land, and aging housing stock, which compound the housing shortage problem. These challenges necessitate a variety of solutions such as high-density housing and adaptive reuse of existing structures. Development must also be sustainable long-term, with adequate investments in utility and transportation infrastructure that are essential for supporting higher densities.

The region's boroughs are also anticipated to experience substantial growth demands, and face similar challenges to the cities in accommodating new development due to limited land availability as well as aging infrastructure. Infill development opportunities and upgrading infrastructure will be key to accommodate growth without adverse impacts.

Rural townships have the smallest housing shortage today, but that need for units is anticipated to grow five times larger by the year 2050 based on current growth and population trends. These areas prioritize land preservation and agricultural character, and limited infrastructure constrains housing development. The challenge lies in balancing growth using key locations, such as rural villages. While maintaining rural character, preserving active farming and avoiding overburdening existing services remain primary objectives, without planning to accommodate additional housing units, families living in rural areas are likely to find the costs of housing unattainable for their children, grandchildren and future generations.

The diversity of housing types varies significantly between community types in the Lehigh Valley.

Rural townships primarily consist of single-family detached homes, with minimal representation of any other housing type, due to a focus on land preservation and infrastructure limitations.

Boroughs exhibit greater diversity, offering a mix of single-family detached homes, twins, townhouses, and some multi-family units, aligning with their walkable, small-town character.

Suburban townships overwhelmingly feature single-family detached homes, with limited representation of other housing types, driven by their appeal to families seeking spacious living.

In contrast, Cities have the most diverse housing mix, with significant proportions of multi-family units and attached housing, catering to a range of household sizes and income levels.

Multi-generational households have grown nationwide, reaching a record 18% of the U.S. population in 2021. In the Lehigh Valley, multi-generational households have increased by over 19% since 2010.

Shifting household trends are driven by rising housing costs, caregiving needs, and cultural preferences ⁺ , and emphasize the importance of a variety of housing options to fit a range of lifestyle choices and basic needs. Communities with little housing variety are less likely to be attainable because they do not accommodate households of different sizes and living preferences. 

 ^{+Pew Research Center. (2022, March 24). Financial issues top the list of reasons U.S. adults live in multigenerational homes. Retrieved from  https://www.pewresearch.org/social-trends/2022/03/24/financial-issues-top-the-list-of-reasons-u-s-adults-live-in-multigenerational-homes/}  

Today's economy and housing market are substantially different than they were 4-5 decades ago, limiting the ability of households across age and income demographics to afford homes.

In the 1980s, the ratio between household incomes and housing prices was much smaller. A home was a little more than double a household's income, making it easier to save up for a house then today where housing costs four times the median salary.