The results of Harrisburg’s first citywide housing study are in, and they predict a shortfall of more than 200 rental units at all price points over the next three years.
Representatives from the consulting firm that prepared the study presented their main findings to City Council tonight. The authors said demand for rental housing in Harrisburg will outpace supply through 2020, even as development projects put new units on the market.
As a result, Harrisburg will face a shortage of approximately 244 rental units across the city – a figure that accounts for the city’s existing housing stock, new units coming onto the market and old units becoming uninhabitable. The study also considers population projections, which anticipate that Harrisburg will gain 300 households in the next three years, mostly in Allison Hill and Uptown Harrisburg.
The study didn’t offer any policy recommendations, but city hall officials intend to use its findings to develop long-term development strategies and housing policy proposals. Here are five of the main takeaways from the 100-page study:
Affordable housing and subsidized housing aren’t the same thing.
Developers and policymakers use three standard terms to describe different types of rental housing. Market rate properties are those where tenants pay rent in full, without any public subsidies or rental assistance. Rent is set by a landlord based on location, amenities and demand in the local market.
If a property has restricted rents, or is only open to renters making a certain income, it’s an affordable property. Some affordable housing properties are owned by local governments or nonprofits, but cities can also put zoning restrictions on private projects to make them affordable.
The final category, subsidized properties, offer rental assistance programs based on a renter’s income. This category includes public housing projects, such as Harrisburg’s Hall Manor.
Harrisburg is a low-rent city, but it’s also a low-income city.
The average apartment rents for $831 in Harrisburg. That’s low compared to other parts of Dauphin County, but it’s high for most Harrisburg residents. Nearly half of renter households in Harrisburg have incomes under $25,000. The median renter income is just $22,000 a year.
Housing affordability isn’t defined by the market value of rent, but by how much housing costs consume a person’s overall income. Affordability guidelines, which are set by the federal Department of Housing and Urban Development, say no household should spend more than 30 percent of its income on rent. By that standard, 40 percent of renter households in Harrisburg are cost-burdened. Data show a need for more rental units in the “very low” and “extremely low” income bands.
Demand for rental units will be highest in the Allison Hill and Uptown neighborhoods.
Population growth in Allison Hill and Uptown is expected to exceed other neighborhoods in the city over the next three years. But there’s only one apartment project planned in Allison Hill, which will add 48 units, and there are no upcoming projects slated for Uptown.
Without new housing supply, the scarcity of affordable units in those neighborhoods is expected to worsen. Only one-third of families in Allison Hill who qualify for affordable housing assistance currently receive it, the study says. Demand is even higher in Uptown Harrisburg, where 22 percent of income-qualified rental households get assistance.
“There’s great opportunity for development in both neighborhoods, not just for affordable housing but all rental housing,” said Robert Lenfeld of Real Property Research Group, the Columbia, Md.-based firm that authored the study.
The rental market is tight across Harrisburg, but particularly in Allison Hill.
Harrisburg has more than 4,000 vacant houses and commercial buildings. Abandoned, blighted buildings create eyesores and pose public safety risks, but when it comes to rental units – those that are part of the active housing market – some vacancy is a good thing, said Lenfeld. Fewer than 3 percent of Harrisburg’s rental units are currently vacant. Any figure below 5 percent indicates a tight housing market where renters have limited housing choice and landlords hold a large share of power.
“You want to have some vacancy in a market to ensure elasticity so people can move around and landlords don’t increase rents,” Lenfeld said.
Vacancy rates across the city range from .5 percent in Allison Hill to 4.3 percent in Midtown. South Harrisburg had no vacant units, but it also has the city’s largest share of subsidized rentals. Those rentals aren’t included in vacancy figures, Lenfeld said, since “you never run out of demand for subsidized units.”
Harrisburg’s rental population is aging.
The city’s population of senior citizens is expected to increase 2.4 percent each year through 2020. Seniors can choose to live in any rental unit on the market, but many elect to live in age-restricted properties that offer elevators, common spaces and other amenities that meet their needs. Not all age-restricted properties are affordable—in Harrisburg, only 165 units meet both classifications.
In Harrisburg, the distribution of age-restricted properties limits the housing choice of senior citizens. There are no age-restricted properties in South Harrisburg, whereas downtown has two high-rise towers that contain all of the city’s affordable, age-restricted housing stock. The Paxton Place development will add 37 new, affordable apartments for senior citizens when it’s completed next year. That’s good news for seniors in Allison Hill, but those who wish to find affordable housing in Midtown, Uptown or South Harrisburg will have to keep waiting.