BETHLEHEM, Pa. — Bethlehem’s first large-scale affordable housing rental project in more than a decade is set to break ground next year after receiving highly competitive state tax credits.
The 60 units in the first phase of Gateway on Fourth are part of $66.5 million in low-income housing tax credits awarded Thursday by the Pennsylvania Housing Finance Agency (PHFA). The credits will help fund construction or rehabilitation of about 1,900 affordable units across the state.
The new development at 1400–1414 E. Fourth St. is a 120-unit mixed-income project planned for South Bethlehem. It’s being developed through a partnership among the city, Lehigh Valley Industrial Park (LVIP), and Pennrose, a national affordable housing developer. More than two-thirds of the apartments will be affordable to households earning at or below 60% of the area median income — $60,120 or less annually for a family of four in the Lehigh Valley.
“Opening Doors is about keeping the promise of America and creating opportunities,” Bethlehem Mayor J. William Reynolds said, referencing the city’s affordable housing strategy released earlier this year. “Bethlehem’s first tax credit award in more than a decade is something for our entire city to celebrate.”
The estimated $29 million development is one of two Lehigh Valley projects awarded tax credits this funding round. Six local projects applied for funding, officials said.
Phase one will include a 44-unit mid-rise building at East Fourth and William streets, anchored by a health clinic operated by Neighborhood Health Centers of the Lehigh Valley and a 16-unit townhome building along East Fifth Street.
The project was made possible through LVIP’s donation of the former Szilagyi Fuel and Dancho sites, which it purchased and remediated for more than $4.5 million. The land transfer revived a community-driven redevelopment plan more than 15 years in the making.
“LVIP is so proud to be partnering with Mayor Reynolds, his staff and Pennrose on this transformational housing initiative,” said Kerry A. Wrobel, LVIP president. “We’re thrilled PHFA shares our vision for Gateway on Fourth.”
The Gateway was among three projects statewide to receive matching funds through PHFA’s Health for Housing Investment Program, which supports developments linking affordable housing with on-site health services. The Neighborhood Health Centers’ $400,000 investment will be matched dollar-for-dollar by the state agency.
“We’re not just building housing — we’re investing in the long-term health and stability of South Bethlehem residents,” said Jacob Fisher, regional vice president for Pennrose. “This project exemplifies our commitment to creating high-quality, affordable homes that strengthen communities.”
The affordable apartments will be available to residents earning between 20% and 60% of area median income — about $14,040 to $42,120 for a one-person household or $20,040 to $60,120 for a family of four. Rents will range from $279 for the lowest-cost one-bedroom unit to $1,442 for the highest-cost three-bedroom unit.
Construction on phase one is expected to begin in late 2026 and finish by spring 2028, with leasing to follow soon after. Pennrose plans to apply for additional tax credits to fund the second phase, which would add another 60 units.
Bethlehem’s last low-income tax credit project was HDC Mid-Atlantic’s Southside Lofts, which opened in 2014.
Since its creation in 1987, the federal Low-Income Housing Tax Credit program has financed 3.7 million affordable homes nationwide. Credits are allocated to states based on population and awarded through a competitive process each year.
State Sen. Lisa Boscola and Rep. Steve Samuelson secured nearly $930,000 in state funding for the Gateway project, including $500,000 from the Redevelopment Assistance Capital Program and $428,000 from the Pennsylvania Local Share Account. The city is contributing $3.1 million toward the first phase.
A full list of PHFA’s 2025 tax credit recipients is available at phfa.org.
