Lehigh Valley cities experiencing increases in rental housing
Allentown has more rental units than privately-owned homes.
The city has more than 25,000 known rental units, according to David Paulus, director of building standards and safety in Allentown.
That is 58 percent of the estimated 43,000 total housing units in Allentown, said Mike Moore, the city’s communications coordinator.
Paulus recently reported to City Council that the number of rental units increased by nearly 1,000 in the last year.
That is a higher-than-average annual increase, said Moore.
He said the increase in rentals is “a result of current economic conditions.”
"While we would rather see more owner-occupied properties, a certain portion of the population either cannot afford to own their home or would rather rent,” said the city spokesman.
Moore said the trend could change: “I would expect that, as economic conditions improve, the percentage of owner-occupied dwellings would also rise.”
Paulus told council that few apartments recently have been built in Allentown. He said many of the new units were single-family homes purchased by Realtors or landlords who turned them into rentals. “As far as turning a single-family home into a single-family rental, we have no control over that whatsoever,” said Paulus.
But Paulus explained the city does not allow homes to be converted into multiple apartment units. Anyone wanting to do that has to seek approval from the Allentown Zoning Hearing Board, “and they’re very tough on that.” He indicated property owners must go through the zoning board even to convert a single-family home into even two apartments.
Moore could not pin it down to a year, but said the number of rental units in Allentown surpassed privately-owned homes sometime between 2000 and 2010. Twelve years ago, the city had 19,668 rental units, he said.
City Council president Julio Guridy is concerned about the impact of the increasing number of rental properties on the city’s tax base. After hearing the statistics Paulus presented to council Dec. 4, Guridy said: “When you own your own home, you take better care of it, which increases the total value of the housing stock.”
Guridy said if a rented property is allowed to deteriorate, it loses value, so less tax can be collected on it.
He said home ownership also gives the city more stability.
“I hate to lump everybody into one category,” said Ray O’Connell, City Council’s vice president. “Many renters take very good care of their properties.”
Allentown has a population of more than 119,000, according to the U.S. Census Bureau. Twenty-four percent of those residents live at or below the poverty level, according to Mayor Ed Pawlowski.
On Dec. 5, City Council was told it is time for Allentown to do more to go after the blighted properties and slum landlords, including those who unfairly evict tenants and make them homeless. That recommendation came from Ken Heffentrager, vice president of the Tenants Association of Allentown.
“How many individuals this month alone are going to lose their homes because of slum lords?” asked Heffentrager. “It’s only Dec. 5 and five families are out this month. And we’ve got 20 more days before Christmas.”
Heffentrager distributed lists naming people his organization considers slum landlords in the city, as well as the addresses of properties they own.
On Dec. 4, Paulus told City Council: “We have been very successful at finding illegal units. We found over 300 illegal units this year.”
Paulus said more than 400 illegal apartment units were found in 2011. He hopes that number is going down because landlords are getting the word that they can’t put people in basements, attics, garages and other unsafe places.
Basements, attics and garages were not constructed for human habitation, explained Moore.
When the city finds an illegal apartment unit, the property owner is given time to remove that unit or face a monetary penalty, said Moore. The owner also may be able to bring the unit into compliance and pay for the appropriate license and a possible penalty. For first offenders, those penalties can be up to $1,000 and/or 90 days in prison.
Forty-six percent of Bethlehem’s housing units are rentals, said Irene Woodward, Bethlehem’s housing and community development planner.
Bethlehem has 13,638 rental units out of 31,221 total housing units, according to Woodward. The city has a population of more than 75,000.
Woodward said the number of rental unit has increased by 15 percent in the last 12 years.
“Due to the economy, many have decided to rent rather than own,” she said. She added that, because lending policies have changed, it’s harder to get a mortgage to buy a home. “Many lenders are requiring higher credit scores as well as a higher down payment,” said Woodward. “The uncertainty in the market also has made people more cautious. They have decided renting is a better option for the time being.”
Woodward said Bethlehem provides a variety of housing types for residents: “We have a strong home ownership base in the city, which is slightly higher than other urban communities in the Lehigh Valley.”
Easton, which has nearly 27,000 residents, experienced a nearly equal balance between rental units and privately-owned homes for many years, said Becky Bradley, that city’s planning director.
Bradley said 53.5 percent of Easton’s housing units are rentals—4,710 out of a total of 8,804 homes.
She said the number of rentals is not increasing dramatically, estimating there are between 10 and 50 additional rental units every year.
Bradley indicated rentals have increased since the Great Recession began in 2008.
She said some people who own homes decided to turn part of their house, such as the second floor, into an apartment to supplement their income, but continue to live in the house. Others moved out of their homes in the city because of job relocations, but rent them “because it’s not as easy to sell right now.”
Easton had about 4,400 rental properties in 2010 and 4,600 in 2011, said Cindy Cawley, the city’s chief codes administrator.
Bradley said it’s normal and healthy for a city to have a close balance between rentals and ownership. She said rental properties attract young adults who cannot yet afford to buy a home and older adults who no longer want the responsibilities of home ownership, such as yard maintenance. And she noted real estate taxes still indirectly are paid by apartment tenants in their rent.
Cawley said Easton also has its share of unscrupulous landlords who illegally are putting people in basements, garages or attics. “Some are putting in bathrooms and kitchens and everything.” But she said those units are illegal because there is only one way to get out of them in an emergency. She added that’s why bedrooms without windows also are illegal.
Cawley said some new apartments have been built in Easton and existing buildings have been converted into apartments.
Cawley and Bradley said one example is the Pomeroys building, which was mostly unoccupied for decades. It now has 22 apartment units, all occupied, with “a thriving French restaurant” on the first floor beneath them.
Bradley said turning upper levels of commercial buildings into apartment in center-city Easton creates a 24-hour downtown and keeps businesses open longer to serve the people who live there.
“To have a healthy downtown, you need a lot of people, which means you need to have apartments,” said Thomas Hylton, a preservation advocate who is president of the non-profit organization “Save Our Land, Save Our Towns.”
Hylton, who resides in Pottstown, said home ownership has been declining nationwide since it peaked just before the start of the Great Recession. “Huge numbers of people bought homes they couldn’t afford.”
He said not everybody can afford to own a home and not everybody needs to own a home. “There is a certain assumption that renters are less desirable than people who own homes, but that’s not necessarily true. They can be great neighbors.”
Hylton said the center-city areas of both Philadelphia and Pittsburgh have seen dramatic increases in residents and most of those people are renters. He said many are upwardly mobile young people and older people who are retiring. He added other renters could afford to own homes but choose not to.
Hylton said some older homes are too large for modern single-family residences, so it makes sense to convert them into “extremely attractive rental units.” And old factory buildings in many Pennsylvania cities often are perfect for conversion into apartments, because most have “almost no value for their original use: manufacturing.”
“To preserve a building, you need to have a viable use for it,” he explained. “Manufacturing no longer is a viable use for many of these buildings. So it’s either residential or commercial. There is much greater demand for residential than commercial.”
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