Navigating Lancaster’s Housing and Transit Future

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The Small Cities Lab kicked-off our PA Small Cities Road Trip with a visit to Lancaster, Pennsylvania. After months of remote collaboration, we were excited to meet local partners in person and take a walking tour of the city.

A few weeks later, we reconnected with Senior Planner Lauren Finn to explore the city’s pressing housing and infrastructure challenges, and the creative strategies community and city staff are developing in response.

Lancaster serves as a regional hub in Central Pennsylvania, connecting commuters from major metropolitan areas like New York, Philadelphia, and Baltimore. However, Lancaster faces significant challenges with public transportation.

As Lauren explains, “It’s hard to work in the city and live in the suburbs or the opposite because we don’t have the infrastructure.”

This walkable city has limited regional connectivity as a result of gaps in transportation. While the walkability of Lancaster’s downtown core strengthens the city, the lack of transportation infrastructure limits their regional connectivity.

Housing: Maintenance and Affordability

We began our walking tour of Lancaster with city staff, moving through the city’s repeating alley-street grid in the sweltering 90-degree heat.

As we moved through the neighborhoods, we saw Lancaster’s denser downtown core with row houses, twins, and four-to-six-unit buildings - many of them are aging and in constant need of upkeep. One of the city’s top priorities involves preserving and modernizing this housing stock, but it comes with significant challenges. Aging infrastructure – especially outdated stormwater systems – complicates both renovations and new construction. In response, the city is implementing strategies to reduce soft costs, including materials and permitting fees, while promoting more flexible, incremental improvements. The goal is to slow displacement, reduce unnecessary housing turnover, and ultimately, ensure long-term stability for residents.

Lancaster’s aging housing stock plays a complicated role in the city’s affordability landscape.Its deterioration often drives up demand and prices for the supply of newer homes. In recent years, investor activity has rapidly inflated the market, with some properties jumping in value from $70,000 to over $300,000 in just three years. This surge places growing pressure on residents, as housing costs continue to outpace local incomes. During our conversation, Lauren highlighted an important distinction between “affordable housing” (government-subsidized units) and “housing that is affordable” (market-rate homes that everyday residents can realistically afford).

Interestingly, churches in Lancaster have stepped up as unexpected players in addressing housing needs, offering their properties for redevelopment and providing temporary or transitional housing. Still,these church-led projects and other multifamily developments outside the city core tend to progress slowly. Meanwhile, much of the new housing built focuses on high-cost one- and two-bedroom apartments, which don’t meet the broader demand for affordable, family-sized homes.

“We have had a number of developments recently so we have plenty of apartments but the apartments are not affordable and part of that is due to… lots of reasons: are they not building the right apartments, focusing on one-bedrooms?” says Lauren.

Exploring New Opportunities

Lancaster’s urban grid features an alley-street system – familiar in many small Pennsylvania cities. Because of this, city staff are looking into the possibility of adding new Alley Houses and accessory dwelling units (ADUs) within that grid. Lancaster alleys are also unique. Unlike places in the Lehigh Valley, it classifies its alleys as public, common (based on informal agreements), and private. These differences affect who owns the alleys, who can access them, and how flexible the city can be when it comes to building new homes.

Lauren told us that while there are already some informal ADUs around town — like garage conversions — many aren’t officially allowed under current zoning rules. In fact, the city’s zoning code doesn’t even mention ADUs by name, instead referring to them as “additional primary structures.”

The city has launched a comprehensive alley survey to better understand the development potential within the alley network. This effort aims to map and classify alleys citywide to reduce regulatory barriers and expand opportunities for ADU construction as part of Lancaster’s evolving housing strategy.

Community and Education

Beyond housing and infrastructure, Lauren emphasized Lancaster’s strong sense of community. “If you are in the downtown core and you’ve lived here a while, it’s hard to go somewhere and not see someone you know,” she said.

Lauren also highlighted the city’s intentional approach to combating the legacy of historic redlining, particularly in how school districts are drawn.

“Even in neighborhoods that are predominantly white, schools tend to be more diverse because they intentionally mix up the neighborhoods when drawing district lines, she said. “You can send your kid to the school down the street, but then everyone is going to look like them. Or, you can have more diverse classrooms, but that might mean longer commutes.”

Our visit to Lancaster and our conversation with Lauren offered a thoughtful glimpse into how Lancaster is navigating housing and transportation challenges, and how their strong community is creating new ways and opportunities of living together.