The Lehigh Valley's Data Source

A Growing Region

The Lehigh Valley has been adding more than 4,000 new residents a year for seven decades. All those people need more places to live, work, shop and recreate. Here’s a look at how investors and developers have been building to handle all that new demand.

Residential Trends – More Apartments and
More Housing Diversity

With the fewest new homes built over the past decade since the 1930s, apartment development has surged in the Lehigh Valley, surpassing single-family detached housing as the largest category of approved residential development. During the same period, the amount of approved single-family detached, semi-detached and rowhome units has remained well below pre-recession levels. These development trends reflect a shift from homeownership to renting for more than a decade. Since 2005, the proportion of renters has increase from 27% of the overall housing market to 32% in 2018, as more people show a preference for more urban lifestyles, while others have difficulty buying.

As developers and investors work to catch up with steady population growth, the LVPC projects that apartment development will remain strong, particularly as residential development in the region’s downtowns and suburbs gain steam. While development of suburban single-family detached housing is gradually rising again, the challenge will be to offer housing that is affordable to mid-market buyers. The need for attainable housing, coupled with the lifestyle preferences of empty-nesters and a younger generation of buyers have already spurred new types of residential development that combine the amenities of traditional suburbs with conveniences and connectivity of more urban living. This trend has been particularly evident in Allentown’s resurgent downtown.

Types of Non-Residential Development

COMMERCIAL

PUBLIC/
QUASI-PUBLIC

RETAIL

INDUSTRIAL/
WAREHOUSE

Industrial Development Continues Its Impact

The growth in warehousing and logistics facilities continues to present opportunities for job and economic growth, while presenting challenges to infrastructure, public safety, farmland preservation, and air and stormwater impacts. The region’s large amounts of available industrially zoned land and its centralized location, combined with increased globalization, prompts the LVPC to project continued warehouse development.  The LVPC reviewed more than 5.3 million square feet of approved industrial plans in 2019, of which 80% consisted of warehouse projects. That’s a decline of 1.8 million square feet compared to 2018,  however,  approximately 3.5 million square feet was added to the pipeline of development that has been proposed but was not finalized. That brings to 15.5 million square feet the amount of industrial development – including 14 million warehousing – that’s been proposed since 2017, but is still in review.

That alone suggests that aggressive warehouse development will continue in the near future. Of particular concern is warehouse development proposed in areas where infrastructure, including rural roads and bridges, is not sufficient to accommodate such intensive development or the impacts of freight truck traffic. To address this challenge, municipalities will need to coordinate their zoning among themselves to direct these uses to the most appropriate locations. Additionally, the region should continue to develop a diversified economic development strategy that balances opportunities for growth with the quality of life that distinguishes the Lehigh Valley.

Medical and Quasi-Public Development Driving the New Market

The amount of public/quasi-public square footage approved in 2019 was close to that of 2018, and among the highest rates the Lehigh Valley has seen since 2013. This was largely due to big investments in healthcare facilities, including expansions by St. Luke’s University Health Network in Bethlehem Township and the Lehigh Valley Health Network (LVHN) in Salisbury Township, as well as the new Lehigh University Health Science and Technology Building in the City of Bethlehem. Combined, these projects total over 500,000 square feet, nearly double the amount of similar projects reviewed for final approval in the previous year. The Lehigh Valley has also seen a growing interest in the development of new office space over the last five years, indicating a shifting workforce and market opportunities for newer, more modern work spaces. Office development nearly doubled between 2018 and 2019. However, the new Air Products & Chemicals, Inc. headquarters facility accounted for 53% of all reviewed office square footage in 2019. Aside from this unique project in Upper Macungie Township, the areas of the region with the largest shares of office interest include Lower Macungie Township, the City of Allentown and Lower Nazareth Township.

The challenge will be ensuring that, through design and location, the region’s employment centers are accessible to residents regardless of the place of residence or mode of travel.

Continued Transformation of the
Shopping Landscape

Suburban Lehigh County continued to dominate the regional retail market in 2019, largely due to project proposals along MacArthur Road in Whitehall Township. These projects developing the area around the Lehigh Valley Mall alone made up more than 67% of all approved retail square footage.

With the ongoing expansion of online shopping, retailers continue to adapt to the changing landscape by creating more experiential shopping experiences and adding more restaurants, entertainment venues and services to their tenant mix. Others may turn their shops into flexible spaces that can be used by online retailers as temporary pop-up shops. Overall, as the region continues to grow in population, many of its older strip retail properties and shopping centers offer prime opportunities for redevelopment that incorporates new retail space into a mix of residential, commercial, office and even light industrial/manufacturing uses.