Pennsylvania’s Housing Crisis: Building Shortage Drives Affordability Down
Pennsylvania’s Housing Crisis: How Building Shortfalls Impact Affordability
Table of Contents
- Pennsylvania’s Housing Crisis: How Building Shortfalls Impact Affordability
- Pennsylvania’s Housing Shortage: Impact on Affordability
- Pennsylvania’s Housing Crunch: How Zoning Impacts Rent and Affordability
- Zoning Reform: A Key to Unlocking Affordable Housing?
- Pennsylvania’s Housing Crisis: A Q&A Guide to Affordability Challenges
The rising cost of housing is a pressing issue, particularly in regions where demand outstrips supply. In Pennsylvania, limited construction, partly due to restrictive zoning regulations, has considerably contributed to a housing shortage, ranking the state 44th in housing construction rate from 2017 to 2023.
Overview of pennsylvania’s Housing Market
From 2017 to 2023, the average rent in 23 Pennsylvania counties surged by 46%, climbing from $1,013 to $1,476. This increase, as tracked by Zillow’s rent estimate, far outpaced wage growth and the prices of other goods and services.
The most significant housing cost increases occurred in areas experiencing population growth without corresponding housing growth. While the combined population of these 23 counties grew by only 0.7%, northeastern Pennsylvania saw a 1.7% increase, and Philadelphia’s suburbs grew by 2.5%.
Notably, rent increases in northeastern Pennsylvania were as high as 81%, surpassing even the growth in New York City (+30%) and it’s suburbs (+44%) during the same period. This disparity highlights the critical impact of lagging housing production.
Significant rent increases were also observed in smaller metropolitan areas like Lancaster, Reading, Harrisburg, and York, as well as in Philadelphia suburbs and parts of western Pennsylvania.
The housing shortage has not only strained renters’ budgets but also pushed homeownership further out of reach. The number of homes on the market in Pennsylvania plummeted by 60%, from 48,199 in January 2017 to just 19,361 in December 2023.Consequently, the median home price statewide rose by 55%, from $165,000 to $255,000, with northeastern Pennsylvania experiencing an even steeper increase of 73%.
Local zoning regulations play a crucial role in Pennsylvania’s housing landscape. From 2017 to 2023, local governments issued building permits sufficient to increase the state’s housing stock by only 3.4%, significantly below the national average of 7.5%. This discrepancy underscores the impact of restrictive zoning on housing affordability.
Pennsylvania has also lagged in the construction of lower-cost housing options like apartments, duplexes, and townhouses, largely due to zoning restrictions. many localities restrict development to single-family homes on large lots, limiting efficient land use and precluding more affordable housing types such as accessory dwelling units.
To address similar housing shortages, states like Arizona, Colorado, Florida, Maryland, Montana, and Rhode Island have enacted legislation to increase housing supply and stabilize costs. Cities like Houston and Minneapolis have also demonstrated how increasing housing supply can effectively curb rent growth and improve affordability.
Pennsylvania’s Housing Construction Compared to Other States
Pennsylvania’s rate of new home construction is among the lowest in the nation. From 2017 to 2023, building permits issued would increase the number of housing units by just 3.4%. In contrast, Utah led the nation with permits equaling 19.1% of its 2017 housing supply, followed by idaho and Texas with 17.4% and 14.4%, respectively.
Pennsylvania has added only 10% more homes since 2000, compared to a 25% increase nationally.
Regional Disparities in Housing Costs
northeastern Pennsylvania has seen the most significant increase in housing costs due to limited building permits. From 2017 to 2023, permits approved in Monroe County, the Scranton-Wilkes-Barre area, and the Lehigh Valley totaled just 2.5% of the 2017 housing supply, resulting in an average rent increase of 63%.
The region experienced increased housing demand from 2017 to 2022, with approximately 97,000 people moving in from New York and New jersey, while only about 32,000 Pennsylvania residents moved in the opposite direction. This influx drove up rents and home sale prices, prompting some residents to relocate to less expensive areas.
In Monroe County, municipalities issued permits to increase the housing supply by only 2% from January 2017 to December 2023. Consequently, the average rent rose by 81%, from $1,032 to $1,870 per month. Similarly,in Luzerne County,renters paid 71% more in 2023 than in 2017,while Lackawanna County saw a 57% increase.
In contrast, Northampton and lehigh counties, which approved the most housing in northeastern Pennsylvania, experienced the slowest rent growth at 54% and 52%, respectively.
Homeownership prices also soared, rising 55% statewide. Counties containing Allentown (+65%), Lewistown (+67%), Reading (+69%), Pottsville (+78%), and East Stroudsburg (+105%) saw even faster growth, indicative of severe inventory shortages and a lack of starter homes.
Rent Burden in Northeastern Pennsylvania
The rent increases have significantly impacted residents of northeastern Pennsylvania. In Monroe County, 61% of renters were considered rent-burdened in 2023, spending more than 30% of their income on housing and utilities, compared to 55% nationally and 53% statewide.
The Scranton-Wilkes-Barre region has also become less affordable, with 58% of renters rent-burdened in 2023, up from 48% in 2017. Furthermore, 38% of renters in the region were severely burdened, spending more than half their income on housing in 2023, a significant increase from 30% in 2017.
Conclusion
Pennsylvania’s housing shortage, exacerbated by restrictive zoning and limited construction, has significantly impacted housing affordability, particularly in northeastern pennsylvania. Addressing these issues through policy changes and increased housing production is crucial to ensuring affordable housing options for all residents.
Pennsylvania’s Housing Shortage: Impact on Affordability
Pennsylvania faces a significant housing shortage,contributing to rising rents and affordability challenges across the state. While some areas saw increased housing construction, it often fell short of meeting the growing demand.
Rent Increases outpace Inflation
Despite additional housing units being built, the demand continued to outstrip supply.From 2017 to 2023, the average monthly rent in Philadelphia increased by $394, a 30% jump. This surge significantly exceeded the rate of inflation, placing a strain on renters.
Counties with More Permits Saw Slower Rent Growth
The undersupply of housing and large rent increases extended beyond Philadelphia. Metropolitan areas near Philadelphia, such as Reading (rents +62%) and Lancaster (+57%), experienced significant population growth and rent hikes from 2017 to 2023. Harrisburg (+50%), Carlisle (+49%), and York counties (+49%) also saw rent increases in line with the 23 Pennsylvania counties tracked by Zillow.
These smaller metropolitan areas remain relatively affordable. In december 2023, rents in these five cities averaged $1,364, lower than Philadelphia’s suburbs ($1,979) and the city itself ($1,672). However, these areas issued permits for about a 4.3% increase in housing units from 2017 to 2023—above the state average but below Philadelphia’s increase. Without more construction, their affordability may decline.
Cumberland County, including Carlisle and Mechanicsburg, saw a population surge of over 7% from 2017 to 2023. Communities there approved 7,700 building permits, 7.3% of the 2017 housing stock. This new housing kept rent increases to a near-average 49% from 2017 to 2023.
West of the Susquehanna river, rent increases were lower than the 46% average in the Pennsylvania counties tracked by Zillow, but higher than Philadelphia’s 30% average increase. Rents in the Pittsburgh region increased 36% from 2017 to 2023, while jurisdictions issued permits totaling only 2.9% of the housing stock. Erie County issued permits for just 1.3% more homes, and saw rents climb by 40%. Johnstown (Cambria County) had 43% rent growth and permits for only 0.7% more new units.
Butler County, north of Pittsburgh, issued permits to increase the housing stock by 8.4%. Rents grew 29% in seven years. Center County, home to Penn State’s flagship campus, allowed permits for 4.9% more units; rents increased 28% from 2017 to 2023.
Local Zoning Rules Restricting New Housing
Many Pennsylvania communities have zoning laws that limit new housing construction, impacting the housing supply. One common restriction is requiring large lots for single-family homes.
In Lower Gwynedd, a philadelphia suburb, a single-family home requires at least 35,000 square feet of land. Doylestown requires at least 80,000 square feet per home. These towns have water and sewer access, but zoning limits the number of homes that can be built. That one Doylestown lot could hold 40 town houses on 2,000-square-foot lots.
In northeastern Pennsylvania, East Stroudsburg requires at least 12,500 square feet of land for each house in some areas. Even in high-density areas, every new house must have at least a 7,500-square-foot lot.Erie County has a minimum lot size of 7,200 square feet, even in areas with sewer and water service. South Fayette,a Pittsburgh suburb,requires 20,000-square-foot lots for suburban residential homes,even with existing sewer service.
Philadelphia has more varied zoning than its suburbs. Minimum lot sizes can be as high as 10,000 square feet in some areas,but other areas allow single-family row houses on lots as small as 700 square feet. Flexible zoning has allowed for more housing development. Philadelphia issued permits for new housing at about twice the statewide rate from 2017 to 2023; its rent increases were much less than statewide (30% in Philadelphia, compared with 46% in the 23 Pennsylvania counties tracked by Zillow).
Most Pennsylvania communities either forbid or make it difficult to build accessory dwelling units (ADUs). Many jurisdictions do not allow ADUs or allow them only with a special use permit. Even where ADUs are allowed, minimum size regulations prevent them from being built or being financially viable. Lehigh County requires an ADU to have at least 1,000 square feet of living space. Cambria County has an 800-square-foot minimum. Such minimums significantly raise the costs of building an ADU.
Minneapolis and Houston: Increasing housing Supply
Pennsylvania’s experiance mirrors national trends: housing costs rise where population growth isn’t matched by housing supply. Rent growth in Pennsylvania’s counties tracked by Zillow (+46%) was similar to growth in the U.S. as a whole (+47%) from 2017 to 2023, Pennsylvania permitted many fewer housing units (3.4% of the state’s 2017 housing stock, compared with 7.5% for the entire U.S.). Areas with zoning laws preventing less expensive housing saw large increases in housing prices.
Houston and Minneapolis offer examples of how governments can increase lower-cost housing. Houston reduced its minimum lot size in the urban core in 1998, from 5,000 to 1,400 square feet, and expanded this programme citywide in 2013. This led to a boom in new town houses.Houston issued permits for 102,000 housing units from 2017 to 2023, about 11% of its 2017 housing stock; the city’s average rent increased 28% in that period, 19 percentage points below the national average (47%).
Since 2009,Minneapolis has instituted major zoning changes to increase housing supply. It allowed more apartment buildings along commercial corridors, reduced parking requirements, and in 2020, began allowing duplexes and triplexes citywide. From 2017 to 2023, the city issued enough building permits to increase the number of housing units by 12%. The vast majority of those new units were in apartment buildings—and less expensive than single-family homes.
Minneapolis experienced rent increases well below state and national averages from 2017 to 2023, despite a 12.7% increase in the number of households in the city. Had rents in Minneapolis grown as much as in the rest of Minnesota, the city’s renters would be spending an estimated $1,700 more annually in rent.In 2017, a Minneapolis resident had to earn 80% of the area median income to afford the median apartment rent. By 2023, that figure had fallen to 66%.
What Can Pennsylvania Do?
Many states have enacted legislation to increase housing supply.Montana passed laws to allow residential buildings in commercial areas, enabled ADUs without parking or owner-occupancy requirements, and streamlined permitting processes. Washington made condominium construction easier, allowed small multifamily units in larger cities where only single-family homes had been allowed, and standardized the design review process.
Pennsylvania policymakers have several options:
- Allow small multifamily buildings (duplexes and triplexes) on lots that now permit only single-family homes.
- Permit the construction of accessory dwelling units—including in attics, basements, and backyards—on lots that now permit only single-family homes.
- Reform permitting laws to simplify and speed up the process.
- Allow more apartments near commercial areas and public transportation.
- Reduce or remove minimum parking mandates that increase the cost of building multifamily dwellings.
- Convert commercial buildings to apartments.
- Enable the construction of housing on land owned by nonprofit organizations,educational institutions,and religious organizations,such as churches.
Data from cities such as Houston and Minneapolis suggests that these laws are likely to improve housing affordability, saving Pennsylvania residents money. Had Pennsylvania made some of these changes and added more housing earlier,rents would now be lower. Research from the United Kingdom and australia suggests that for every 10% that a region adds to its housing supply,housing costs are 11% to 22% lower than they would have been without the additional housing. the average rent in the 23 Pennsylvania counties tracked by Zillow was $1,476.
Pennsylvania’s Housing Crunch: How Zoning Impacts Rent and Affordability
Pennsylvania faces a growing challenge in housing affordability, influenced significantly by zoning regulations and rising rents. This article examines the interplay between these factors, drawing on data and insights to understand the current landscape.
Rising Rents Across the State
Rental costs in Pennsylvania have seen considerable increases.Data from Zillow’s Observed Rent Index (ZORI) reveals trends across various counties. ZORI rent estimates are available for 23 counties in Pennsylvania. Counties with data from January 2017 to December 2023 include: Allegheny, Berks, Bucks, Chester, Cumberland, dauphin, Delaware, Erie, Franklin, Lackawanna, Lancaster, Lehigh, Luzerne, Monroe, Montgomery, Northampton, Philadelphia, Washington, and York. Additionally, Butler, Cambria, Centre, and Westmoreland counties had Zillow ZORI data for some part of 2017 or early 2018 and were included in this analysis for completeness.
While wages in Pennsylvania increased by 26% from 2017 Q1 to 2023 Q2, the cost of consumer goods has also risen, impacting overall affordability.
Population Shifts and Housing Demand
Population data from the U.S. Census Bureau highlights shifts within Pennsylvania counties, influencing housing demand. Understanding these population dynamics is crucial for addressing housing needs.
Comparing Pennsylvania to the New York Metropolitan Area
To provide context, the article compares Pennsylvania’s rental market to that of New York city and its surrounding suburban areas. New York City rents are an average of zillow’s ZORI rents in the five New York City counties: Kings, Queens, New York, Bronx, and Richmond. Suburban New York and New Jersey counties include those in the New York-Newark-Jersey City metropolitan area available in Zillow ZORI from January 2017 to December 2023. These are Suffolk,Nassau,Westchester,and rockland counties in New York,and Bergen,Middlesex,Essex,Hudson,Monmouth,Ocean,Union,Passaic,Morris,Somerset,and Hunterdon counties in New Jersey.
Home Value Trends in Northeastern Pennsylvania
The average percentage change of the Zillow Home Values Index (ZHVI) for Monroe, Northampton, Luzerne, Lackawanna, and Lehigh counties in Pennsylvania provides insights into property value fluctuations in the northeastern part of the state.
The Role of Zoning Regulations
Zoning regulations play a significant role in shaping housing affordability. These regulations, often set at the local level, can restrict the type and density of housing that can be built.
Pennsylvania Department of Community and Economic Development, in “Reducing Land Use Barriers to affordable Housing, Planning Series #10,” highlights the impact of these barriers.
Building Permits and Housing Supply
Building permits are a key indicator of new housing supply. According to the U.S. Department of Housing and Urban Development, building permits are an estimate of expected demand for new housing units. Issuing a building permit does not necessarily mean that a building is built or a home is added. In Pennsylvania,for every one unit added to the housing stock from 2000 to 2023,1.14 units were permitted; nationally, for every one unit added to the housing stock from 2000 to 2023, 1.01 units were permitted. Not issuing building permits means no new units are added.
Examples of Zoning Restrictions
Specific examples of zoning regulations in pennsylvania illustrate the types of restrictions in place:
- Monroe County housing cost burdens are based on the figures for the East Stroudsburg MSA, which encompasses Monroe County.
- In Lower Gwynedd Township, PA, A-1 Residential District: Permitted Uses, 1258.03.a.3, Township of Lower Gwynedd, PA,
- Doylestown Township has specific Dimensional Requirements, 175-17:G2, Township of Doylestown,
- East Stroudsburg Borough outlines regulations in its Table of Bulk Regulations Governing the Size of Lots, Yards and Buildings for Permitted Uses Only, 157-36, Borough of East Stroudsburg, 2022,
- Erie County’s Subdivision and Land Development Ordinance specifies Lot and Yard Requirements, 502.9.a, Erie County, PA, 2019,
- South Fayette township’s R-2 Suburban Residential District details Area and Bulk Regulations, 240-23.a.2.b, Township of South Fayette, PA,
- Philadelphia’s zoning code includes Development Standards: Dimensional standards for Lower Density Residential Districts, 14-701-1, city of Philadelphia,
Accessory Dwelling Units (ADUs) and Flexible Zoning
Accessory Dwelling Units (ADUs) are increasingly seen as a solution to increase housing supply. The American planning Association defines ADUs as a way to add density within existing residential areas.
Lehigh County Zoning Code—Minimum Habitable Floor Area, 180-35, Lehigh County, PA, 2023, and Cambria County Zoning Code: Conversion Apartment, 27-901, Cambria County, PA, 2013, provide examples of regulations related to ADUs and conversions.
Flexible zoning policies are crucial for addressing rising rents. As noted by The Pew Charitable Trusts, ”More Flexible Zoning Helps Contain Rising Rents.”
Zoning Reform: A Key to Unlocking Affordable Housing?
Published: March 12, 2025
The United States faces a significant housing affordability crisis. A severe housing shortage means many people struggle to afford homes in their communities. Consequently, cities and states are exploring controversial steps, including changing zoning laws, to address this issue.
Understanding the Impact of zoning Regulations
Zoning regulations play a crucial role in shaping housing supply and affordability. These regulations dictate what type of housing can be built where, influencing land value dynamics and overall housing costs. A comprehensive understanding of these interactions is necessary to generate effective policy interventions.
One potential solution lies in zoning reform. This involves modifying or eliminating restrictive zoning laws that limit housing density and diversity. The goal is to increase the supply of housing and, consequently, make it more affordable.
The Push for Change
There’s a growing push to change zoning laws to create more affordable housing options. This push recognizes that current zoning regulations often contribute to the problem by restricting the type and density of housing that can be built in certain areas.
Zoning reform represents a crucial avenue for mitigating housing cost pressures.However, it’s essential to acknowledge the complexities involved and consider various strategies to advance affordable housing supply.
Key areas of focus in Zoning Reform
Efforts to eliminate zoning barriers to affordable housing often focus on several key areas:
- Impact of Zoning regulations on Housing Supply and Affordability
- Index of Housing Challenges and Solutions
- Stakeholders and Their Impacts on Advancing Zoning Reform
- Emerging Regulatory Solutions
- Additional Strategies and Solutions to Advance Affordable Housing supply
- Case Studies
examples of Zoning Reform in Action
Several cities and states have already begun implementing zoning reforms to address the housing crisis.These reforms often involve allowing for greater density, reducing minimum lot sizes, and streamlining the permitting process for new construction.
For example, changes in Minneapolis aimed to increase housing affordability. According to a report dated January 4, 2024, “Minneapolis Land Use Reforms Offer a Blueprint for Housing Affordability.” These reforms included Zoning Code Text Amendments, subdivision Ordinance Amendments, and Heritage Preservation ordinance Amendments implemented in 2018.
Houston also saw positive results from lot-size reform. As noted in a 2023 report, “Lot-Size Reform Unlocks Affordable Homeownership in Houston.”
Furthermore, there’s a connection between zoning reform and homelessness. A February 19, 2024, report stated, “Zoning Reform Can Reduce Homelessness.”
The Importance of Addressing the Housing Cost Crisis
Addressing the housing cost crisis is crucial for the economic and social well-being of communities. When housing costs are too high, it can lead to increased poverty, homelessness, and economic inequality.
By implementing effective zoning reforms,cities and states can create more affordable housing options and improve the lives of their residents.
Support for Pro-housing Policies
There is broad support for policies that promote more housing across geographic lines. A January 31, 2024, report indicated, “Support for policies That Promote More Housing Crosses Geographic Lines.” Furthermore, a May 29, 2024, report highlighted, “Strong Support Across Partisan Lines for Policies that Boost Housing.”
Conclusion
Zoning reform is a critical tool for addressing the housing affordability crisis. By understanding the impact of zoning regulations and implementing effective reforms, communities can create more affordable housing options and improve the lives of their residents. while challenges remain,the growing momentum for zoning reform offers hope for a more affordable future.
Pennsylvania’s Housing Crisis: A Q&A Guide to Affordability Challenges
Pennsylvania is grappling with a significant housing crisis. Rising costs, limited construction, and restrictive zoning regulations are all contributing factors. This Q&A guide dives into the details, exploring the root causes of the problem and potential solutions.
Q: What’s the state of Pennsylvania’s housing market?
A: Pennsylvania faces a growing housing shortage, ranking 44th in housing construction rate from 2017 to 2023. From 2017 to 2023, rent increased an average of 46% in 23 Pennsylvania counties, climbing from $1,013 to $1,476. This surge outpaced wage growth, putting a strain on renters.
Q: What are the main drivers behind rising housing costs in pennsylvania?
A: Several factors contribute:
Limited Housing Supply: A significant undersupply of housing relative to demand.
Population Growth disparities: Areas experiencing population growth without corresponding housing growth. northeastern Pennsylvania saw a 1.7% increase, while Philadelphia’s suburbs grew by 2.5%. cumberland County, including Carlisle and Mechanicsburg, saw a population surge of over 7% from 2017 to 2023.
Restrictive Zoning Regulations: Local zoning often limits the type and density of housing.
Decreased Housing Inventory: the number of homes on the market in Pennsylvania plummeted by 60% between January 2017 and December 2023.
Q: How have rising housing costs impacted renters and homeowners in Pennsylvania?
A: Rising housing costs have impacted both renters and homeowners:
Renters: Renters find their budgets strained, with a rising percentage spending over 30% of their income on rent and utilities (rent burdened). Some face even greater challenges, spending over half their income on housing (severely rent burdened).
Homeowners: Homeownership is becoming increasingly out of reach as the median home price statewide rose by 55%, from $165,000 to $255,000, between 2017 and 2023.
Q: What role do zoning regulations play in Pennsylvania’s housing crisis?
A: Zoning regulations substantially impact housing affordability. Many localities restrict development to single-family homes on large lots, limiting efficient land use and precluding more affordable housing types such as apartments, duplexes, and townhouses. From 2017 to 2023,municipalities issued building permits sufficient to increase the state’s housing stock by only 3.4%, significantly below the national average of 7.5%.
Q: Can you give specific examples of restrictive zoning in Pennsylvania?