Guest blog by Melissa Velez, IPP ’23
Since early 2020, the City of Allentown, in Eastern Pennsylvania, has been working on a complete zoning code rewrite. The plan has been to go from a typical Euclidian type of code to more of a form-based code. The project was stalled for a couple of years due to the pandemic and changes in staff. However, for the past two years, we’ve been working diligently on revisions and we’re finally about to release the final adoption draft!
Defining the Problem using PDIA
In 2024, I came to the Implementing Public Policy (IPP) program, at the suggestion of our Mayor, to gain implementation skills that would help us get this project over the finish line. Before starting the program, I had not been exposed to the Problem Driven Iterative Adaptation (PDIA) approach, so this was new territory. Getting started, the initial intention was to focus on the complex problem of getting the entire zoning code passed by City Council. When we were breaking down our problems and working on creating fishbone diagrams, I quickly realized that the topic was too broad and too complex with bones for job growth, better building design, affordable housing, walkability and dependence on cars. I needed to start with a smaller piece of the problem.
My original PDIA Fishbone diagram
That smaller but still complex piece of problem from my initial fishbone diagram was affordable housing. After a few iterations, my final problem statement was “low-income citizens being priced out of housing within the city. Not enough affordable housing being developed.” I chose affordable housing because it is one of the key initiatives within the proposed zoning code and the lack of affordable housing is a serious issue in the City of Allentown. The revised fishbone focused on the issues surrounding this problem including poverty, lack of affordable housing, jobs close to home, public transportation and loss of diversity and culture.
My revised fishbone diagram after a few iterations
Affordable Housing
The City of Allentown is the third largest city in Pennsylvania and part of the Lehigh Valley region. We have a diverse population of about 128,000 people and growing with nearly 60% of residents are renters. The City Median Income (CMI) is $54,193 compared to the Area Median Income (AMI) of $76,031 and the poverty rate is 23.3%.
Prior to the pandemic there were still affordable housing options within the city. Several areas of the city were naturally affordable for both homeownership and rent. We completed a housing study in 2024. Part of that research included calculating the median sales prices for housing. Within the 2018-2019 period, there were several areas in the city with median sales prices between $50,000 and $70,000. In the 2021-2022 period, the median sales prices increased to between $100,000 and $150,000. Currently, houses in the same areas are selling for $160,000 to $200,000.
To test some of these numbers, I used Zillow to look up houses that recently sold within areas that had been naturally affordable. One of those naturally affordable housing types are what we call Lane Rowhouses in the proposed zoning code. These houses front on alleys that are 20 ft or less in width. They usually do not have off-street parking, the houses are typically smaller in size, and the areas are densely populated.
Examples of the Shift in Prices in Naturally Affordable Areas (Google, 2025; Zillow, 2025)
Lane Rowhouse Examples (Google, 2025)
The housing study also found that from 2019 to 2022 we lost approximately 3,400 rental units that had been priced at or below $1,000/month. Most of those rental units shifted to the $1,500 and $1,999/month price range.
Change in Asking Rents in Allentown, 2019 – 2022
Addressing the Complex Problem
With housing prices increasing rapidly over the past five years, the City is working on several fronts to address the issue of housing affordability. The zoning code rewrite is the main initiative with links to the Housing Needs Assessment and Strategic Plan as well as the Recompete Plan. The purpose of the rewrite is to better align the code with the City’s development related ordinances and the policies and principles of Allentown’s comprehensive plan, Vision 2030. Updating the zoning codes is one of the key catalytic actions to put that plan in motion. The guiding principles, which provide an important foundation for the proposed zoning code, include:
- Support economic development and employment growth opportunities
- Create new mixed-use zoning
- Increase housing options and choice
- Address housing affordability
- Promote increased bikeability/walkability
- Promote sustainability, resiliency, and public health, and
- Address community character and context.
Support Economic Development and Employment Growth Opportunities
My coworker and fellow Senior Planner, Trevor Tormann, who also worked on the housing and Recompete plans, said to me, “stable housing requires stable employment, and stable employment requires stable housing.”
In that regard, the first of the proposed changes to the zoning code would help support Allentown’s history and identity as a manufacturing economy. We are mapping the city with the intent to preserve industrial districts and manufacturing uses. To promote job growth, we are expanding locations where artisan and low-impact manufacturing are permitted. The code will also bring jobs and housing closer together as commercial zones are proposed to be changed to mixed-use zones where housing will be permitted by right. We are also expanding opportunities for home-based businesses, including no-impact home-based businesses, home occupations, such as medical and professional offices and personal services, and live work units.
Recompete Plan
The City was awarded a U.S. EDA Recompete grant in 2024. The Recompete Plan is focused on facilitating local employment within the project area by breaking some key barriers to employment, such as childcare and transportation access. The Plan will support walk-to-work opportunities, and develop small footprint, urban manufacturing sites within the city’s core. Again, the zoning code rewrite is a related initiative with the proposed changes that are both housing supportive and employment friendly. The Recompete Plan focuses on the areas of the city that have historically been naturally affordable. The goal is to drop local prime-age unemployment from 12% to 5%, employing nearly 700 residents in these neighborhoods by 2030. The strategies of the plan also line up with the PDIA problem and proposed zoning code, including addressing two pieces of the fishbone, lack of jobs close to home and lack of public transportation.
- Increase Housing Options and Choice:
The first housing specific principle includes increasing housing options and choice. The goal is to accommodate a wider range of housing options by allowing additional housing types in various zones. The code proposes changes to adaptive reuse projects, with incentives for affordable housing, expanding areas where group homes are permitted, and permitting alternative housing models and accessory dwelling units (ADUs.)
Adaptive reuse projects include the conversion of 65% or more of the gross floor area of a principal building that was formerly occupied by nonresidential uses into dwelling units. A lot of times this includes former industrial and office buildings that are no longer suitable for those uses. These projects must be brought into compliance with building and site design standards. However, affordable housing projects that meet the definition of adaptive reuse receive parking reductions and are exempt from most of the applicable design regulations.
ADUs will be permitted on lots occupied by single family dwellings. These regulations will allow additional units to be added to the housing stock while preserving the form of existing neighborhoods and efficiently using existing infrastructure. ADUs will provide housing options and choices for households of varying income levels, ages, and sizes. The regulations will allow homeowners to age in place by providing extra income and security as well as opportunities for companionship and assistance. We expect that ADUs will provide more accessible and affordable housing options.
2. Addressing Housing Affordability:
The second housing specific principle is addressing housing affordability. The goal here is to maintain existing affordable housing and provide affordable housing options. The proposed changes include code adjustments and affordable housing incentives.
The code adjustments include making necessary adjustments to lot and building regulations. Density restrictions, such as lot area per dwelling unit, will be greatly reduced or removed. Lot requirements will be adjusted to better align with the existing built environment. This will help make lots, especially lane rowhouse lots, conforming. Parking requirements, which can be a barrier to adding housing units, will be reduced with additional reductions along high-capacity transit-served locations and credits for EV, car-share, bicycle, motorcycle, and scooter parking. New bicycle parking regulations will encourage alternative transportation methods.
For affordable housing incentives, the proposed code establishes the criteria for affordable housing incentive eligibility with 1-4 units being 100% affordable and projects with 5 or more units being at least 20% affordable. These units would be restricted to households earning no more than 80% of the area median income for a minimum of 20 years. The incentives include alternate minimum dwelling unit floor area requirements, additional building height, and a 25% parking reduction with an additional 25% reduction for projects along high-capacity transit routes.
Allentown Housing Needs Assessment & Housing Plan
The Allentown Housing Needs Assessment and Housing Plan identified challenges that relate back to the PDIA problem and the proposed initiatives in the zoning code rewrite. These include the depletion of naturally affordable housing, displacement of renters, especially households of color, and households being priced out of housing within the city. The assessment found there is a significant shortage of affordable and workforce housing units. The demand for low-priced rental units greatly outweighs the supply of rental units under $1,000 per month. The current vacancy rate within the city is 1.4%. This means we would need to add approximately 1335 units to the housing supply to meet a healthy vacancy rate of 5%. At least 721 of those units would need to be under $1,000 per month. Homeownership is also a challenge as home sales prices in Allentown are continuing to increase at a faster rate than the U.S. average.
Left image: Affordable Housing Height Bonus Locations. Right image: High-Capacity Transit Served Locations
The housing plan includes goals of improving internal process, preserving affordability, rehabilitating aging housing stock, increasing supply of housing for low- and moderate-income households, increasing homeownership opportunities, and preventing homelessness and displacement. The strategy for laying the groundwork to implement the plan starts with the update to the zoning code. The additional housing options and affordability incentives are key to the initiatives within the plan. Some of these initiatives include providing gap funding for large scale affordable housing projects, both for rental housing and homeownership, and assistance for first-time homebuyers with downpayment and closing costs.
Learning from the PDIA Process
The PDIA process helped me narrow down my complex problem to something more manageable, that matters, and that I can work towards solving. With the zoning code rewrite, we had to release the first public review draft to get feedback on the affordable housing initiatives, such as parking and additional building height. After receiving feedback, we had to revise the code to address comments as to not lose the authority we had built. Developers seemed interested in the incentives offered for including affordable housing in their projects. However, they wanted incentives for the entire project, not just the affordable portion (parking). We ended up splitting the difference and didn’t receive any additional feedback from developers during the review of the second public review draft. In other words, we adapted and reanalyzed the problem to come up with revisions that would work towards solving the problem while growing our authority and legitimacy.
Looking at the Triple A approach, our acceptance and ability are large as we already have the proposed code written and have received good feedback from the public, City Council and other stakeholders. Our authority is also large as we are the department responsible for writing the code and, based on the feedback we’ve received, the affordable housing regulations are important to members of City Council. Ultimately, the proposed zoning code will have to be adopted by City Council for the affordable housing regulations to be implemented.
Triple A: Large Change Space
PDIA Iteration Check-in Tool
What did we do?
Since the last check-in, we have released the second public review draft of the zoning code. We received comments and made additional revisions to the code. The revisions were provided to the consultants to prepare the adoption draft.
What did we learn?
There were substantially fewer public comments than the first public review draft. The revisions to the affordable housing regulations did not receive additional comments from developers.
What are we struggling with?
The biggest struggles are the sheer size of the project and the amount of time each set of revisions takes.
What’s next?
We anticipate receiving the adoption draft for review within the next few weeks. We will then submit the draft to City Council to be introduced, which will start the adoption process.