Lancaster City Housing Shortage: Solutions for Affordable Housing

This article ran in the Fall 2021 issue of Hourglass Quarterly. View the full publication here. 

The City of Lancaster recently commissioned the Center for Regional Analysis to examine housing availability and its implications for affordable housing. The results may not surprise you: Lancaster City has a housing shortage.

The City has approximately 24,300 housing units and the City’s population is 22,100 households. This suggests that 9% of the City’s housing units are vacant. However, this vacancy rate overstates the availability because it does not reflect how the housing stock is divided between rental and homeownership markets, how housing quality limits supply, or how well housing supply matches the needs of City residents. The analysis suggests that Lancaster City needs an additional 1,165-2,455 housing units. Without expanding the housing stock, price pressure will continue to rise and will cause displacement or create incentives for housing stock to be run down (particularly in the rental market).

Other findings from the analysis include:

• The City’s housing stock does not align with the household composition of its residents. Over half of the City’s housing stock (56%) is comprised of single-family dwellings, with 83% of these units having three or more bedrooms. In contrast, only 30% of the City’s households have children under the age of 18. 22% of the City’s housing units are estimated to have one bedroom, but 30% of the City’s households live alone.
• The opportunities to increase housing supply are limited. An estimated 88% of the City’s parcels have some form of housing on it. The City needs intentionality in developing housing stock with a focus on large scale projects. However, both the rehabilitation of existing low to moderate density housing units and building more medium and high density housing units where feasible are important.
• Housing cost burden is widespread. The median household income of City residents in 2019 was $45,570. This level of income suggests monthly housing costs of $1,140 (rent or mortgage) imposes a housing cost burden for half of the City’s households. However, nearly 67% of the City’s households are comprised of one individual or family with one head of household, suggesting they have a single income earner. Over half of these households (7,850 households) had annual incomes of less than $35,000. For these households, the City’s median rent of $870 exceeds the 30% threshold of housing affordability. The net effect is that one-third of the City’s households are housing cost burdened and almost half of all renting households are estimated to pay at least 30% of their gross income to rent.

Next Steps

This fall the City of Lancaster presented its interim housing strategy, which aims to facilitate the creation of 2,000 new housing units, with the goal of at least 15 percent being affordable, by 2026. The plan also calls for the City to protect and improve 1,000 existing low- to moderate-income homes through programs like lead remediation and critical repair grants, and evaluate and address every rental housing unit in the City with the goal that at least 85 percent being rated fair or in good condition.

Lancaster City Council also authorized $5 million of the city’s American Rescue Plan Act funds for affordable housing projects. The first allocation of these funds was $1 million for the purchase of a parking lot at 838 Marietta Ave. to develop the property into multiple affordable housing units. The city intends to enter into an agreement with HDC MidAtlantic, a local nonprofit, to take title to the property and develop it. The nonprofit would eventually become the owner and manager of the property.