Harrisburg, Pennsylvania — An Economic Profile

RESIDENTIAL REAL ESTATE

HARRISBURG’S RESIDENTIAL NEIGHBORHOODS AND APARTMENT HOUSES ARE CHARMING, WELL BUILT AND SOPHISTICATED IN DESIGN AND STYLE.

Ranging from occasional 18th century structures to ambient 19th century historic districts to wooded, secluded settings; and from contemporary Center City high-rises to upgraded garden complexes and elegant apartment suites, the city has something for everyone. In recent years, Harrisburg has seen substantial rehabilitation of older homes and a significant amount of new town house construction. Development of large, new residential projects shows that the value of city real estate has significantly increased.

This new development, most of which has occurred over the past 17 years under the Mayor’s Residential Development Programs, includes neighborhoods in most areas of the city. Between 1982 and 2000, approximately 5,300 new and rehabilitated housing units were created in Harrisburg. The City has aggressively adopted financial incentives to increase residential sales, including:

The broad lawns of Harrisburg’s Riverside neighborhood showcase comfort and style.
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Real Estate Tax Abatement. The City, Dauphin County and the Harrisburg School District, as the local taxing jurisdictions, have approved real estate tax abatement on buildings and improvements for new residential construction and existing structure rehabilitation. No taxes are paid on the assessed value of a new house, excluding the land value, for a period of three years. With respect to rehabilitation, the difference between the old assessment, prior to rehabilitation, and any higher new assessment, after rehabilitation, is abated on a sliding scale. For residential improvements in excess of $50,000, the tax abatement is phased over a period of 10 years. For improvements under that amount, it is phased over five years, in equal annual percentages in both instances. The same is true for business and commercial improvements below or above $50,000. The property owner does not begin paying the normal tax rate until tax abatement has fully expired.

Mortgage Tax Credit Certificate Program. Harrisburg was the first in the U.S. to issue this certificate. It enables qualified, first-time home buyers to apply up to 50 percent of the interest paid on their mortgages as a federal income tax credit for each year of the mortgage term. Because obtaining this credit is usually done through purchasers adjusting their withholdings through their workplace, take-home pay is increased. The result is an effective and substantial reduction in the monthly mortgage payments, particularly in the first years when interest payments are the largest part of the mortgage payments.

Special Financing. Several Harrisburg banks offer special financing terms to qualified buyers of new and existing homes located exclusively in the city. These include zero financing fee (points) options, low down-payment requirements, and lower than market interest rates.

Investment Tax Credits. The city has successfully achieved national historic district designation for seven areas of the city and numerous individual sites have been additionally placed on the National Register of Historic Places. Income-producing buildings in these districts, and sites involving residential, as well as commercial uses, can receive significant investment tax credits, of up to 20 percent, for every dollar spent on certified rehabilitation work, a major incentive for restoration activity. Other properties can receive a ten percent investment tax credit outside historic districts.

Rental Rehabilitation Program. While the city emphasizes home ownership, it has also established a variety of programs that induce new and restored rental units. One activity is the Rental Rehabilitation Program by which the city provides an owner with a portion of the financing for building rehabilitation. Other programs include below market interest rate financing and donating part or all of the value of publicly-owned real estate to induce private investment, thereby keeping rental rates competitively lower.

Site Improvements. Residential projects, involving new and restored homes and apartments for home buyers and renters, have also used city programs that provide site improvements, infrastructure upgrading and line extensions, donation of publicly-owned property and special incentives specifically tailored to an individual project’s economic needs.

Moderate And Middle Income Homeowner Programs. Since 1982, a highly successful effort has been conducted by Harrisburg to prevent property abandonment by elderly and moderate-income homeowners who, faced with major home repair needs they could not afford, would either have had to live with increasingly deteriorated conditions, or lose their home thus, in many instances, creating a vacant eyesore on the block. The effort is known as the Home Improvement Program (HIP). Neighborhood stability, a sharp reduction in the property abandonment rate, which had been spiraling prior to 1982, and preventing homelessness are but some of the goals achieved through city programs, including weatherization and home rehabilitation.

“Harrisburg was the first city in the U.S. to establish the Mortgage Tax Credit Certificate Program.”

Vacant Property Reinvestment Program. In every American city, some absentee owners blight and abandon residential real estate. Vacant eyesores devalue nearby investment, make mortgage financing more expensive or impossible to obtain, drive up insurance costs and encourage further deterioration. Harrisburg was the first in the state, as part of the Mayor’s residential initiatives, to undertake a specially devised program that, with the use of eminent-domain power, seizes title to structurally sound but blighted property for the purpose of restoration and sale to responsible owners or immediate sale for developer- or homeowner-conducted rehabilitation. Since 1990, over 1,650 parcels have been acquired for takeover and reuse.

Programs Providing Opportunities For Homeownership. By acquiring title to numerous sturdy but blighted properties, the city has succeeded in providing a means of improving neighborhoods while giving families of various income levels a chance to become homeowners. Under the Homeownership Opportunities Program (HOP), these homes are resold to responsible owners and rehabilitated. Many have been sold by the City through real estate agents. Local banks participate in the program by supplying buyers with a construction loan that is then converted to a conventional mortgage loan.

City And Developer Built Homes. The city has directly assisted many small and large-scale development projects, through the provision of financing, site control, infrastructure improvements and other incentives, producing newly rehabilitated or newly built homes. At times, the city has served as a developer, building or restoring homes for homeownership sale and returning sale proceeds into revolving accounts which continue the process of buying still more sites and building or restoring anew.

“Harrisburg has seen substantial rehablitation of older homes plus much new townhouse construction.”

Capital Corridors. Over $12 million have been earmarked beginning in 2000 to upgrade structures and install lighting and streetscape improvements for primarily mixed residential and commercial use along Harrisburg’s principal arteries including Third, Sixth, State, Market and Derry Streets. Further expansion of these efforts are slated.

The Neighborhoods

The Midtown, Fox Ridge, Old Uptown, Shipoke, Mount Pleasant and Shipoke neighborhoods, as well as neighborhoods in the Historic Harrisburg District adjacent to the Capitol Complex, are historic districts of the older city. Many of these neighborhoods have substantially appreciated over the past 15 years due to the substantial public and private investment made there. Many “buys” are still available, especially in the Old Uptown and Mount Pleasant districts.

Of note is a new townhouse project, the first new construction in Mount Pleasant in many decades. Known as Allison Hill South in the 1400 Block of Vernon Street, new homes are leased to qualified tenants helping to fill the demand for the limited supply of rental single-family homes. In addition to the new homes, additional units have been created as part of the same initiative through the substantial rehabilitation of deteriorated buildings in the same neighborhood. Major rehabilitation work has occured nearby. The entire effort represents $18 million in new investment. Also of note is the Summit Terrace townhouse development on Allison Hill with 25 finished townhomes with a total of 60 planned.

Adjacent to the Midtown and Fox Ridge districts are two newer market rate townhouse neighborhoods. The New Fox Ridge townhouse development was built along N. Third Street on several city blocks that had been vacant for years. The neighborhood features interior-of-the-block common green space and off-street parking.

“The City has aggressively adopted a host of financial incentives to increase residential sales.”

The Marketplace townhouse neighborhood is located just north of New Fox Ridge, between Calder and Reily Streets, on land that had been vacant or occupied by substantially deteriorated properties. These contemporary brick townhouses, with an historic Georgian-styled flavor, may be purchased outright or through a unique lease-to-own program created by the city. Both New Fox Ridge and Marketplace represent a major turn around in the value of city real estate.

As a continuation of the spin-off activity from New Fox Ridge and Marketplace is the development of the Capitol Heights townhome community situated between Hamilton and Kelker Streets and between Third and Fourth Streets uptown. Designed to appropriately fit as infill development with the late 19th Century character of the surrounding neighborhood, this initiative represents a bold inner city transformation of a formerly blighted neighborhood of vacant homes and scattered lots to quality market-rate residences offering a full amenity package.

The Shipoke neighborhood, located south of Center City along the river, has also attracted new town house construction. The historic neighborhood is in-filled with luxurious brick homes amidst some of the oldest townhomes surviving in Harrisburg.

Bellevue Park, located in the eastern portion of Harrisburg, is Pennsylvania’s first comprehensively planned residential community and contains beautiful detached homes of distinct architectural styles. Begun in 1910, the Park was designed to conform to the contours of the pre-existing topography. The Park features all under ground utilities, permanent open space and antique-style streetlights.

Uptown Harrisburg, situated north of the Pennsylvania Governor’s Residence, grew in the 1920s from the older city to the south. The area features generously sized duplexes and detached homes. Uptown is anchored by the sprawling Polyclinic Hospital and is bordered by Riverfront Park. A significant part of uptown will undergo substantial additional renovation and upgrade under the new Uptown Renewal Plan unveiled in 2001, a plan aimed at the eastern half of the Uptown area.

Riverside, developed in the 1930s and 1940s, is the city’s northernmost neighborhood. In addition to having Susquehanna River and Riverfront Park frontage, the area contains the splendid Italian Lake and its surrounding parkland, the historic William Penn school campus, as well as the Dixon University Center.

Schreinertown, a well-maintained and attractive neighborhood, is situated on the north end of Harrisburg’s Allison Hill and just east of Harrisburg Cemetery. The neighborhood is convenient to Center City, the State Farm Show Complex and I-81.

Melrose Gardens; Wilson and Taylor Parks are eastern Harrisburg neighborhoods. Developed to meet the booming post-World War II housing needs, Melrose Gardens, the largest of the neighborhoods, is configured as attached townhouses. At Melrose Gardens’ far-eastern end is Emerald Point; a stylish community representing the first new residential construction in this area in decades. Just west of Melrose Gardens’ are two newer townhouse developments known as Allison Heights (1900 Block of Rudy Rd.) and Allison Court (200 Block of S. 20th St.) which, like most of the other recent residential new construction projects in the city, are the first new housing starts in their respective neighborhoods in decades. The homes in both projects sold quickly in spite of local lenders’ attempts to discourage the developers from undertaking the projects. This was another victory over traditional preconceived notions. Wilson and Taylor Parks, which neighbor Melrose Gardens, consist of brick duplexes built in the early 1950s. The neighborhoods are very convenient to shopping and schools.

Engletown, located in the Old Uptown Harrisburg historic district, between Harris and Kelker Streets and between N. Second and N. Third Streets, is a turn-of-the-century neighborhood and features ornate buildings primarily of Queen Anne and Italianate design.

“The City has succeeded in giving families of all income levels a chance to become homeowners.”

Midtown, located between N. Front and N. Third Streets and from Forster to Calder Streets, is an historic district and remains largely intact through its original construction; a popular place for those who work downtown and want the convenience of walking to work.

Multi-Family Residences

In addition to its residential neighborhoods, Harrisburg offers many apartment living opportunities. Some of the city’s market-rate apartment projects include:

Apartment buildings with subsidized rents include: Morrison Towers and the B’Nai B’Rith Apartments, both located on Chestnut Street; the Presbyterian Apartment Tower, at Second and South streets; Governor Apartments on Market Street; Jackson/Lick twin towers on Sixth Street; the seven-story, 56-unit Laurel Towers Apartments in the 1500 Block of N. Third Street; Linden Terrace, at Front and Verbeke Streets; and the McFarland Building Apartments on Mulberry Street overlooking Center City.

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