This old steel town was long affordable for hard-working immigrants — but no more

Published on
July 22, 2021

The rise of Bethlehem Steel in the early 1900s fueled a boom of affordable housing surrounding the 130-acre plant in south Bethlehem, Pennsylvania. Brick row homes that new immigrants could easily afford on their mill pay sprung up all over. Home ownership rates and neighborhood pride were high. 

Today, about 52% of Southside residents own their homes as the neighborhood faces increasing development pressures. Demand for market-rate apartments is booming amid an aggressive expansion of Lehigh University, which overlooks the neighborhood at the foot of South Mountain. Yet, the majority of local residents don’t make close to the $70,000 a year needed to afford these luxury apartments. Many already have trouble affording the rents charged by the landlords who own their aging homes. 

And plenty of residents work in jobs the coronavirus has put at risk. They’ve labored through the pandemic at great personal cost. And now the pandemic is exacerbating the Lehigh Valley’s existing housing crunch, leaving low-income people competing against high-income folks for the same housing due to a shortage of both affordable and high-end housing.

South Bethlehem’s gentrification at first was fueled by investors snatching up single-family homes and converting them into Lehigh student housing. Now, the neighborhood’s cultural renaissance has reached a crescendo that’s attracting high-end developers, who’ve proposed 300 luxury units in recent weeks, only 10 of them considered affordable.

Community organizers fear the Southside is about to be hit with a tsunami of evictions and mortgage foreclosures as pandemic-related moratoriums lift. And they worry the neighborhood’s quality of life is in danger. My project for the 2021 National Fellowship will explore the pandemic recovery in a community hard hit by the coronavirus. 

Has the pandemic hastened the possible transformation of a community rich in history and home ownership into one that looks eerily similar to the gentrified neighborhoods that have cropped up elsewhere in Rust Belt communities that have successfully shaken off their rust? And what impact does this have on the Lehigh Valley’s often-overlooked Latino population, which largely considers the Southside its regional cultural center?

It’s a story where health, race, real estate, urban development and gentrification all converge. That convergence is playing out amid the pandemic recovery and the uncertainty of whether $33 million in federal coronavirus relief will really help tackle systemic inequity in a place still reinventing itself after the bankruptcy of Bethlehem Steel. 

South Bethlehem has long been a community of immigrants. First, Irish, Italian and Slovaks from Europe dominated. Today, it is Latinos. 

Labor demands at the steel plant in the 1940s drove the initial influx of Puerto Rican migration into the city’s Southside. They were drawn by good paying jobs in the Lehigh Valley’s factories and garment mills, which allowed them to buy homes and build intergenerational wealth.

Today, the former steel plant is shuttered and those jobs are gone. The land is now home to a casino, arts and entertainment district, and a sprawling warehouse complex, where many Latinos labored through the COVID-19 pandemic fulfilling Walmart and QVC orders for Americans nationwide. Other residents were furloughed with pay for months when Wind Creek casino closed, only to be laid off when it reopened at a reduced capacity.

And Bethlehem’s Hispanic population has disproportionately felt the ill effects of the pandemic, mirroring nationwide trends. Hispanics make up 30% of residents in this city of almost 75,000 people and 32% of residents in South Bethlehem. Yet they’ve faced much higher infection rates than non-Hispanic residents. The reasons for this are several. They’re more likely to work in jobs that put them at high-risk of exposure and live in tight quarters that make social distancing tough. Environmental factors, poverty and the inequitable American health system mean they face more conditions that put them at higher risk for poor COVID-19 outcomes. 

They live in aging housing in a region that just ranked as the worst of 100 American cities for people with asthma, a problem that is a mix of geography and air pollution, exacerbated by the fact the Lehigh Valley is one of the East Coast’s warehousing capitals. 

In Bethlehem, investors have been snatching up single-family homes for years and rehabbing them into student housing. They can charge much higher rents to students than local families. Now high-end developers are getting in on the boom.

The Southside’s housing shortage has helped drive up the median rent to $1,000 a month.  This leaves 65% of neighborhood households cost-burdened, meaning they spend more than 30% of their income on housing, according to the U.S. Census. 

Nearly 1,000 new apartments have been approved in Bethlehem since 2014, but not one is considered affordable housing. The most recent projects target Lehigh University students and young professionals, not local residents. 

The city has created an affordable housing task force, limited the boundaries of Lehigh student housing to try to preserve neighborhoods and is considering limiting building heights in the historic district. 

Yet many Southsiders feel ignored and overlooked by their city government. 

Through my reporting I hope to give voice to residents and track how the coronavirus recovery plays out in this diverse neighborhood.