ALLENTOWN, Pa. – During a special city council meeting Wednesday night, the Allentown Housing Authority shared an update on the Little Lehigh housing development project.
Daniel Farrell, AHA executive director, said the authority's plan is to demolish all of the existing 76 units in two phases and ultimately replace them with 96 units.
Located at Lehigh Street and Martin Luther King Jr. Drive, construction of the Little Lehigh housing development began in the early 1970s and was completed in 1975.
Its redevelopment is a tax-credit project in partnership with Pennrose Management. As a tax-credit project, Pennrose will own the buildings while AHA continues to own the land.
Originally, the redevelopment construction costs were designated at roughly $13.85 million in 2019 but "have gone up substantially" to around $18.4 million, according to Jacob Fisher, regional vice president with Pennrose.
A few main drivers of the change are increases in the Davis-Bacon wage rate for Lehigh County. In some cases, Fisher said, the hourly wage rate increased 300% for various trades including electricians, carpenters, plumbers and roofers.
Another issue, Fisher said, is supply chain challenges impacting supplies such as lumber, insulation and drywall, as well as the bids contractors are able to get to hire subcontractors.
Finally, an increase in the size of the community building to accommodate a Head Start classroom also added significant costs to the project, Fisher added.
Fisher said there is currently a funding gap of $4.1 million and Pennrose is seeking $3 million in local recovery funds from Allentown to invest in the project.