Low-Cost but High Quality: Implementing an Affordable Rental Rehabilitation Program in Bethlehem

City: Bethlehem, Pennsylvania

Reporting to: Director of Community and Economic Development

The Challenge

Bethlehem’s historic housing stock is aging. The median age of owner-occupied homes in the city is 68 years, compared to the state average of 59 and the region’s 54. Against this backdrop, the city has invested significantly in rehabilitation programs to safeguard housing availability. However, these programs have historically focused on owner-occupied properties, despite a documented need for safe and affordable rental units. Opportunities to develop new public housing units are limited. Furthermore, the city’s 2% vacancy rate indicates high market demand and minimal unit turnover.1 A shortage of affordable housing stock can lead to tenants making significant tradeoffs when looking for housing or advocating for quality. These include paying hefty relocation costs or accepting substandard conditions. With the upper hand in a strained market, city landlords have little incentive to invest in repairs or rent to low-income tenants. This signals a dire housing crisis for the 45% of renters facing affordability challenges, and particularly the city’s low-income households.2 The city’s leadership (Mayor Reynolds and Council) believe that all residents, regardless of income, deserve access to safe and affordable housing. The mayor’s first budget allocated $5 million in ARPA funds toward affordable housing strategies, and he’s added staff capacity to support this critical work.

The city aims to launch a new rental rehabilitation program to improve living conditions for low-income tenants. A focus on building a rental rehabilitation program complements the city’s first comprehensive housing strategy plan: “Opening Doors: Strategies to Build Housing Stability in Bethlehem” (“Opening Doors”). Furthermore, the Mayor and City Council have supported the direction of federal funding to expand housing programs, including rehabilitation initiatives under the city’s Community Development and Health Bureau. The Bureau leverages funding from the US Department of Housing and Urban Development’s (HUD) Community Development Block Grant (CDBG) and HOME investment Partnership Program (HOME) to support rehabilitation for owner-occupied units. In 2022, The Bureau’s Lead and Healthy Homes program (which offers free assistance to remediate owner-occupied homes with lead poisoning) allocated a portion of funding to serve a limited number of income-qualified tenants. While today, the city can refer owner-occupied properties to its existing rehabilitation program and a handful of rentals to the Health Bureau’s Lead and Healthy Homes program, a large segment of renters are without options. Although the city has lacked a program to help fund rental rehabilitation, city leadership did launch a proactive inspection and rental licensing program in 2020 to better identify unsafe living conditions and pursue corrective actions against landlords through housing code enforcement. The program, which has provided a trove of—largely untapped—data on housing conditions, requires inspections of the city’s 15,000 rental units at least once every three years. The city can better utilize these regular property inspections as a tool to both uncover housing code violations and identify potential clients who may benefit from a rental housing rehabilitation program.

The fellow, working together with the Department of Community and Economic Development and its CDBG/HOME consultant, will connect program strategy, data analysis, and stakeholder engagement to help the city answer the following key questions:

  • How should the city and its partners administer a program that rehabilitates rental units to improve living conditions for low-income renters?

  • How can the city incentivize landlords to participate in the program?

  • How can the city ensure rehabilitated units remain affordable for low-income households?

  • How can the city utilize its Opening Doors plan and Housing Inspections data to prioritize areas for rental housing rehabilitation?

A successful summer fellow will help create a rental rehabilitation program that satisfies HUD standards and furthers the city’s affordable housing goals, prevents displacements, and is actionable. Moreover, the fellow will help establish a plan for implementing the program that will help the city reach diverse communities most in need of the resource while also incorporating existing housing and neighborhood condition data to make the greatest impact on the overall rental housing situation in the city.

 

What You’ll Do

To address the questions above, the fellow will engage with key internal and external stakeholders to prepare the program for successful and equitable implementation. These stakeholders include city staff in the Community Development Bureau, Housing Inspections Bureau, Health Bureau, and the Mayor’s Office, as well as external private, nonprofit, and public partners represented on the Opening Doors Housing Strategy Committee, including Community Action Lehigh Valley, New Bethany Ministries, North Penn Legal Services, and the Bethlehem Housing Authority.

Key Deliverables Include:

  1. Support and input into an implementation plan for a rental rehabilitation program that includes:
    • Guidelines for a rental rehabilitation program.
    • Strategies for incentivizing landlords to participate in the program.
    • Mechanisms for ensuring rental affordability for rehabilitated properties.
    • Processes for funneling potential clients from the Housing Inspections Bureau to Community Development and Health Bureaus.
  2. Data analysis
    • Map rental housing inspection violation data according to Housing Inspections Bureau code.
    • Identify neighborhoods or blocks well suited for investment in rental rehabilitation.
  3. White paper that highlights the equity implications of this work, focusing on specifically disadvantaged communities and persons with disabilities.
  4. Presentation of recommendations and work product to key stakeholders, Mayor’s Office, and leadership team of the Department of Community and Economic Development.

The fellow’s work also has the potential to connect to the city’s ongoing work on improving service delivery in the Bloomberg Harvard City Leadership Initiative’s Data Track, through which the city aims to expand the strategic use of data.3

 

What You’ll Bring

The fellow will be expected to possess the following skills:

  • Data analysis
  • Qualitative interviewing and analysis
  • Mapping (GIS)
  • Marketing
  • Policy analysis
  • Writing and editing

 

 

Endnotes

1 Bethlehem needs 1,042 new rental housing units to return to a healthier 6% to 8% vacancy rate. A sharp acceleration in housing costs over the course of the pandemic means home ownership is out-of-reach for a large swath of city residents. A household needs to make $100,000 a year to afford the average $302,000 home; Bethlehem’s median household income is about $62,000. A household needs to make about $50,000 a year to afford the average rental. Roughly 22% of the city’s population earn less than $30,000 per year and typically cannot afford to pay more than $800 per month for an apartment. Research suggests that less than 1% of apartments listed in 2023 were priced below $1000 per month.

2 Out of approximately 8,300 low-income households which are cost-burdened (paying more than 30% of their income for rent and utilities), 69% are renters. And of the 12% of households that are severely cost-burdened (paying more than 50% of their income for rent and utilities), 78% are renters. In addition, according to the city’s data, Black and Hispanic families experience greater housing challenges than White, non-Hispanic households. The disparity in rental affordability is strongest among renters earning less than 30% AMI, with 84% of Black households experiencing housing challenges compared to 65% of White and Hispanic households. Source: Department of Housing and Urban Development, CHAS data.

3 For example, service center calls related to overall property conditions, such as high grass and weeds complaints, could be analyzed and filtered for known rental properties. These data could then be explored for additional insight into the development of the rental rehabilitation program.
 
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