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

Since the Great Recession that ended shortly after 2010, the Lehigh Valley housing market has become more diverse. No longer dominated by the single-family detached home, housing over the past decade has included a growing number of townhouses and apartments.

2022 showed a 14% increase in residential units proposed — continuing a trend in which apartments are becoming a larger part of the Lehigh Valley’s development landscape.

The 3,733 apartment units reviewed last year was nearly double the amount reviewed in 2019.

This trend is likely to continue as the amount of developable land becomes more limited and demand for homes to purchase outpaces unit construction. The density of apartments rose from about 12 units per acre in 2020 to about 22 units per acre in 2021, while the density of single-family detached units remained relatively the same.

Single-family detached homes remain a staple in the Lehigh Valley market, but they no longer dominate housing proposals. Other housing types, including twins, townhouses and condos saw a dip since 2020, resulting in a decrease in the variety of purchase options.

Since the Pandemic began in 2020, the demand for housing has grown significantly in the Lehigh Valley, as well as many communities across the country. The number of housing units approved is not likely to slow because the number reviewed in 2022, at 6,469, was the most since 2007, with many of them expected to be approved and built in the coming months and years.

Non-Residential Trends – Industrial Development Continues Its Impact

The Lehigh Valley’s place in the evolving global economy continued to grow in 2022 as nearly 22 million square feet of non-residential development was approved – more than 81% of which was for new industrial facilities.  It included approved square footage of 1,713,564 of commercial; 333,698 of office; 1,533,054 of quasi-public; 15,479 of recreation; 459,643 of retail and 68,900 of agricultural space, but the year was again dominated by a steady stream of industrial development.

The nearly decade-long warehouse boom continued with 4.1 million square feet approved, making up the majority of the 4.5 million of industrial development for the year.

It shows that as online shopping grows, the region’s place within a single trucker’s shift of 100 million consumers maintains the Lehigh Valley as one of the nation’s hottest markets for warehouse and logistics center building.

There’s no indication that will slow anytime soon. Even as available land close to major arteries dwindles, developers compete for land in outlying areas, often straining local roads and infrastructure not built for such intense use.

That makes it important for municipal leaders to update zoning and official maps and consider coordinating with neighboring communities to use every tool available to control development.

Warehouse Growth Continues

Industrial development continues to grow within the Lehigh Valley, as industrial reviews have steadily increased from roughly 6 million square feet in 2015 to over 18 million in 2022. As the region has become a hub for the global e-commerce economy, warehouse development continues to make up a growing share of the industrial activity. The 4.2 million square feet of warehouse space approved in 2022 continues a five-year growth spurt in which approvals ranged from 3.5 million to 6 million square feet annually. In addition, new proposals in 2022, that are currently moving through regulatory review, added another 13.5 million square feet to the pipeline.

These numbers dwarf other industrial activity, with 360,000 square feet approved in 2022, and just over 1 million proposed but not yet approved in recent years. The other industrial activity represents a decline from recent years, and it is the least approved since 2017. Unlike the large size of many of these warehouse projects, many of the other industrial proposals have been smaller in scale, most of them in the manufacturing sector.

The expansion of industrial, and most notably, warehouse square footage has led many municipalities to explore how they can best pursue the economic advantages of industrialization while managing the impacts of this development on infrastructure, land use and our communities.

This level of warehouse development has prompted both counties to take action, by working with the LVPC on freight-based land use analysis. It has also encouraged several municipalities to enact zoning changes to better site and regulate this growth. Municipalities who have not already taken this approach should review their planning and zoning regulations to get a clear picture of where these facilities should, and more importantly, should not be located, and what mitigation techniques may be applicable within their communities.