This week, more than 200,000 people are expected come to the Allentown Fairgrounds for the 173rd Great Allentown Fair, where they’ll sample fried kielbasa balls, watch livestock competitions or catch live concerts by Heart and Alabama. Most will return home to the suburbs, but a good number will head back to their houses or apartments in Allentown, Pa.

Pennsylvania’s third-largest and fastest-growing city, Allentown, has seen a boom in development. Spurred by state legislation that provided incentives for building in a 130-acre neighborhood improvement zone, developers have invested more than $1 billion in downtown Allentown over the last decade or so, creating 1.3 million square feet of office space, 1,500 apartments, a hockey arena, two hotels, a new science center and a music hall.

Location: In Lehigh County in eastern Pennsylvania, 92 miles west of New York City and 60 miles north of Philadelphia

Population: 127,138 (U.S. Census Bureau 2024 estimate)

Area: 18 square miles

Housing: 42 percent homeownership

The Vibe: A former industrial town being reborn as a small but economically and culturally diverse city offering an affordable lifestyle within driving distance of New York City

With remote work more common after Covid lockdowns, this culturally rich city, with its vast park system and housing options has become an increasingly attractive alternative to those seeking a more affordable, relaxed lifestyle while still being in driving proximity of New York City and Philadelphia.

“It’s a desirable place to be,” said Christopher Raad, 47, a third-generation Allentown real estate agent who said many of the friends he grew up with now want to return. “We have a lower cost of living, the taxes are far more affordable and there are a lot of jobs to be had.”

Beyond the concentrated downtown area, older homes on tree-lined streets fill the West End, while more modest ranches and Cape Cods climb the sloping streets of the East End. The once industrial Lehigh River waterfront has also begun being redeveloped.

Allentown has been through many cycles in its 263-year history, from its agrarian roots now celebrated at the annual fair, to the once vibrant steel industry whose decline Billy Joel depicted in song, to a shopping mecca anchored by the Hess Department store. A 1980s suburban exodus sent Allentown into a decades-long slump from which it is now emerging, a step behind its sister Lehigh Valley cities, Bethlehem and Easton.

J.B. Reilly, who is a lifelong Allentown resident and the president of City Center Group, the primary developer in the city’s downtown revitalization, has seen Allentown and the Lehigh Valley transform from an industrial-based economy to a more robust place, both economically and demographically.

With regional or national headquarters in the city, some large corporations conduct a sizable portion of their business in Allentown, including ADP, a payroll company; Mack Trucks; PPL Corporation, an energy company; and Air Products, a gas supplier.

“It’s a critical region, very diverse, politically 50/50, and the economy is on fire,” said Mr. Reilly, noting his 14 apartment buildings have a 97 percent occupancy rate, with 40 percent of residents from out of state.

Offering amenities like pools, rooftop decks and parking, the new apartment buildings are competing for the young professionals and empty nesters who largely make up their residential base.

According to 2023 Census Bureau estimates, the median household income was just $53,403, about $10,000 lower than in Bethlehem and Easton. The city has also seen a substantial growth in its Hispanic population, from 12 percent in 1990 to over 50 percent today. Much of this core population is of more modest means, and has been somewhat left behind in the development.

While the improvement zone legislation has largely benefited large developers, small businesses are serving people who may not be able to afford a shiny new building with a dog park and a pool. Since 2017, Queen City Realty, run by Louis Holzman and his parents, has purchased and restored five older properties, creating 40 apartments.

“I’m seeing a lot more life happening here in the last five years. The ball is rolling,” said Mr. Holzman, 32, who has long appreciated the appeal of his hometown, “and we want to be part of it.”

Going Out and About

Getting There, Getting Around

Downtown Allentown is walkable, but cars are the preferred method of travel to outer neighborhoods or beyond.

Neighborhoods