Could Lehigh County’s Affordable Housing Efforts Work Better?

Tom Creighton’s wrong about the Lehigh County Affordable Housing Trust, but everybody should be open to the idea that the County could be spending the public’s tax dollars in a higher impact way, in trying to achieve a goal such as affordable housing.

One thing we know is that spending on foreclosure prevention really saves local governments a lot of money. Each foreclosed property costs the community about $20,000. Pennsylvania’s HEMAP program is one of the best, most effective foreclosure mediation programs in the US. It’s false economy to cut spending on this, especially when the $11.50 fee recording fee is so low.

That is the opposite of what Percy Dougherty is proposing. He deserves credit for being one of few Republicans on the Commission willing to seriously engage on this issue, but I have to disagree with part of his proposal here:

Dougherty also said the fund should concentrate on brick and mortar rehabilitation projects rather than operating programs, such as downpayment assistance and foreclosure mitigation, which require more administrative overhead.

“I don’t think it’s really working the way we want to see it working right now,” Dougherty said. “I don’t think the money is going through to the people who need it. When it goes toward paying people’s salaries, I don’t think that’s a good use.”

County law caps administrative costs at 15 percent of money collected, Feinberg said, and typically are below that. She said the fund supports a mix of brick and mortar projects and support programs, which do carry higher administrative costs.

“But they do help a lot of people,” she said. “The counseling programs are very important.”

Foreclosure prevention is a very high-impact way to spend money, even though it costs money to administer. But is this really the best way to pay for that? What about charging a $20,000 foreclosure mitigation fee to banks who initiate foreclosures? Lots of these banks turn out to be terrible neighbors who don’t keep up their properties, dragging down neighbors’ property values. If they have to pay a $20,000 mortgage mitigation fee in order to foreclose, they’ll be more likely to modify mortgages instead of foreclosing. The fee should be used to pay for the County’s foreclosure prevention program.

I am more skeptical about downpayment assistance. It makes sense if the goal is promoting homeownership, but I don’t really see that as an affordable housing strategy. I think the County needs a more robust affordable housing strategy than that, one that focuses on developing the market for multi-family rental housing in Allentown, western Bethlehem and the older boroughs. Allentown is facing what looks like a rental housing shortage right now. In my view, bringing market rents down to an affordable share of income is a more pressing affordable housing goal than helping a relatively small number of people become homeowners. One thing Tom Creighton is right about is that the current programs don’t help enough people, but his solution is to stop trying to help anybody, rather than proposing a more productive alternative strategy.

One way Lehigh County might bring down rents is through a Transferable Development Rights bank. Right now, the County spends money buying up development rights to farmland and then not using them, in order to protect at least some farm land from getting eaten up by subdivisions and Big Box stores. But with a TDR Bank, the development rights would then be sold to developers who want to build beyond the zoning envelope in some other area.

So for instance, even in the “high density residential” zones in Allentown, the maximum building height is 38 feet. That’s not very tall at all for high density.If someone wants to build taller than that, they need to get a variance from Allentown zoners. But Allentown could identify some high growth zones of the city in addition to the NIZ and the waterfront where a developer interested in building taller than 38 feet can buy the right to do that directly from the County, rather than having to apply for a variance with the city. The square footage of farmland protected would be matched 1:1 in new developable air rights.

This would promote affordable housing since it would make sure that there is no loss of developable land in Lehigh County. Any land that the County makes unavailable for housing construction would be offset by an equivalent upzoning in the developed areas. This would help ensure that the County’s efforts to preserve open space do not inadvertently drive up housing costs on the remaining developable land.

Politically, the TDR bank is an idea that could appeal to people who like markets and don’t like taxes, which the Lehigh County Republicans would probably cop to. Instead of the traditional farmland preservation program that just pays people not to develop their land, the TDR bank uses a market for development rights to manage the competing priorities of growth and open space. Best of all, there doesn’t need to be any public money involved, other than administration. Developers buy the development rights, and that money is used to purchase development rights to farmland. At no point is the County taxing residents to buy development rights.

This is a very Republican way to the achieve the liberal end of farmland preservation – an issue that is popular with many suburban Republicans. It could be a way for Republicans to steal one of the Democrats’ more popular issues in the local issue space. Remember that Ron Beitler is running for Lower Macungie Commissioner as a Republican and as a smart growther.

Before this rambles on even further, I’ll just restate the point once again that there are a lot of policy ideas out there to address affordable housing that don’t involve taxes and transfers, if that isn’t your thing, and some of the best ones are very pro-market. Unfortunately Lehigh County Republicans are overtaken by an anti-government faction that’s not really interested in governing or improving quality of life on metrics besides low taxes.


  1. Let me ask a different question – does the Lehigh Valley have an affordable housing problem at all?

    I’m asking this coming from the angle that it is not our responsibility to provide affordable housing for people who want to relocate from NYC. That’s your problem, not ours.

    So with that, do we have a problem that even needs addressing?

    • Jon Geeting says:

      Housing and transportation costs could always be lower, for everybody. The average combined housing and transportation costs for a middle class family in the top 100 largest US metros takes up over 60% of income. Unless you think there is some reason why the Lehigh Valley would have much lower costs than that, I would guess it’s about the same. That’s much too high. I think the focus of public policy on those issues should be to take rent and transportation costs down to around 40% of income for middle class families.

  2. The only way you get the number that low is if you ban private home ownership, ban private car ownership, ban anyone from living anywhere except within walking distance of a train station and everything else they’ll need to survive, and have the government subsidize apartment construction.

    Of course you’ll have to take everyone’s homes by force, and then force them into the Soviet style tenement housing that the few remaining taxpayers would have subsidized, but it’s for their own good – 0r so says the enlightened liberals.

    Yep, sure is a great plan.

    • Jon Geeting says:

      Wow that is a terrible plan! My preferred strategy would be to pay for a fare-less Bus Rapid Transit system with land taxes on land around bus stations. I would relax anti-density zoning regulations in the CBD and high-density residential zones, and fully replace the tax on structures with a land tax. In CBD and high-density res zones there would be no parking minimums, no minimum lot sizes, no set-backs, no height limits. The only potential ban I’d consider is a ban on surface parking lots as a legal use in the CBDs, phased in over a three-year period, no grandfathering. I don’t think it would be necessary to get paternalistic like that though.

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