Pennsylvania’s Most Development-Friendly Municipalities: Where Zoning Reform and Incentives Are Driving Growth

2/15/2026

Pennsylvania’s Most Development-Friendly Municipalities: Where Zoning Reform and Incentives Are Driving Growth

Pennsylvania is often viewed as a complex development state. With over 2,500 municipalities, local control of zoning, layered environmental regulations, historic preservation constraints, and infrastructure variability, development can range from straightforward to highly challenging depending on location.

Yet across the Commonwealth, a number of municipalities and counties have embraced zoning reform, incentive programs, and comprehensive planning strategies designed to attract private investment. Some communities have modernized outdated zoning codes. Others have streamlined approvals. Many have adopted mixed-use overlays, tax incentives, or industrial recruitment programs.

The result is visible: new residential density, warehouse and logistics growth, adaptive reuse of historic buildings, and revitalized downtowns.

Below is a look at some of Pennsylvania’s most development- and redevelopment-friendly municipalities and counties, what makes them attractive, and what lessons can be learned from their success.

 

What Makes a Municipality “Development Friendly”?

Before identifying specific municipalities, it is important to define what development friendly actually means. Typically, these municipalities share several characteristics:

  • Updated and modernized zoning codes
  • Mixed-use or form-based zoning districts
  • By-right approvals for targeted uses
  • Predictable review timelines
  • Clear comprehensive plans that support growth
  • Incentive tools (LERTA, KOZ, TIF, CRIZ, etc.)
  • Infrastructure investment alignment
  • Proactive economic development departments

Development friendliness does not mean “no regulation.” It means clarity, predictability, and alignment between public policy and private investment.

 

Municipalities Leading in Zoning Reform & Pro-Development Policy 

1. Pittsburgh (Allegheny County)

Why It’s Development Friendly:

  • Riverfront zoning overlays
  • Mixed-use districts
  • Transit-oriented development (TOD) flexibility
  • Adaptive reuse support
  • Active Urban Redevelopment Authority (URA)

Incentives:

  • LERTA tax abatements
  • TIF districts
  • Opportunity Zones
  • Brownfield redevelopment assistance

Results:

  • Strip District redevelopment
  • Lawrenceville transformation
  • East Liberty mixed-use growth
  • Hazelwood Green riverfront redevelopment

Pittsburgh has embraced urban infill, adaptive reuse, and density, particularly in neighborhoods with historic industrial assets.

2. Philadelphia

Why It’s Development Friendly:

  • Major zoning code overhaul in 2012
  • CMX mixed-use districts
  • Transit-oriented overlays
  • Density bonuses
  • By-right multifamily in many areas

Incentives:

  • 10-year tax abatement (historically significant)
  • Opportunity Zones
  • Keystone Opportunity Zones (select areas)
  • Industrial Development Authority financing

Results:

  • Northern Liberties residential growth
  • Fishtown redevelopment
  • Navy Yard industrial and office expansion
  • Center City residential density increase

Philadelphia’s zoning reform significantly simplified what was previously an opaque entitlement process.

3. Allentown (Lehigh County)

Why It’s Development Friendly:

  • Strong downtown revitalization strategy
  • Mixed-use zoning support
  • Coordinated public-private partnerships

Incentives:

  • Neighborhood Improvement Zone (NIZ)
  • LERTA
  • State tax capture financing 

Results:

  • PPL Center district transformation
  • Residential and office conversions
  • Downtown hospitality growth

The NIZ program has been one of Pennsylvania’s most powerful redevelopment tools.

4. Lancaster City (Lancaster County)

Why It’s Development Friendly:

  • Flexible adaptive reuse policies
  • Mixed-use zoning
  • Active redevelopment authority
  • Downtown density support Incentives:
  • LERTA
  • Historic tax credits 
  • CRIZ designation

Results:

  • Warehouse conversions
  • Multifamily growth
  • Retail and restaurant expansion
  • Strong infill development

Lancaster demonstrates how mid-sized cities can successfully align preservation with growth.

5. Bethlehem (Northampton County)

Why It’s Development Friendly:

  • Riverfront redevelopment zoning 
  • Industrial reuse flexibility
  • Mixed-use downtown districts

Incentives:

  • Keystone Opportunity Zones
  • Historic tax credits
  • LERTA

Results:

  • Bethlehem Steel site transformation
  • ArtsQuest district
  • Multifamily redevelopment

Bethlehem’s adaptive reuse strategy turned a former industrial liability into a mixed-use destination.

6. Cranberry Township (Butler County)

Why It’s Development Friendly:

  • Pro-growth comprehensive planning
  • Business park zoning
  • Streamlined approvals
  • Infrastructure investment alignment

Incentives:

  • Business park incentives
  • LERTA Industrial recruitment programs

Results:

  • Major corporate campuses
  • Retail expansion
  • Residential subdivision growth

Cranberry Township is often cited as one of Western Pennsylvania’s most pro-development suburban municipalities.

7. Upper Macungie Township (Lehigh County)

Why It’s Development Friendly:

  • Industrial/logistics zoning flexibility
  • Proximity to I-78 corridor
  • Coordinated infrastructure planning

Results:

  • Major warehouse and distribution growth
  • National logistics tenant presence
  • Upper Macungie capitalized on the I-78 corridor boom.

8. South Fayette Township (Allegheny County)

Why It’s Development Friendly:

  • Mixed-use planning
  • Innovation district support
  • Residential density flexibility

Results:

  • New residential communities
  • Commercial corridor development
  • Office and tech expansion

 

Counties With Pro-Growth Comprehensive Plans 

Certain counties stand out for aligning infrastructure and planning with development:

  • Lehigh County – I-78 logistics growth strategy Lancaster County – Balanced agricultural preservation with urban growth Chester County – Targeted growth areas and preservation balance
  • Butler County – Strategic suburban expansion
  • York County – Industrial corridor development

Counties that clearly designate growth areas reduce uncertainty for private developers.

 

Incentive Tools Used by Development-Friendly Municipalities 

Across Pennsylvania, common tools include: 

  • LERTA (Local Economic Revitalization Tax Assistance)
  • TIF (Tax Increment Financing)
  • CRIZ (City Revitalization and Improvement Zones)
  • NIZ (Neighborhood Improvement Zone – Allentown)
  • KOZ (Keystone Opportunity Zones)
  • Opportunity Zones
  • Historic Preservation Tax Credits
  • Brownfield redevelopment grants

Municipalities that actively deploy these tools often see accelerated redevelopment.

 

Residential Development-Friendly Areas 

Strong residential flexibility exists in:

  • Pittsburgh infill neighborhoods
  • Philadelphia CMX districts
  • Lancaster City
  • South Fayette Township
  • Cranberry Township

These areas allow multifamily, townhomes, and mixed-use density by right or with predictable approval pathways.

 

Industrial Development-Friendly Areas 

Most flexible industrial growth areas include:

  • Lehigh Valley (I-78 corridor)
  • I-81 corridor (Dauphin, Cumberland, Luzerne counties)
  • I-79 corridor (Allegheny, Butler counties)
  • York County industrial parks

These municipalities often provide large-lot industrial zoning with fewer conditional barriers.

Common Goals of Development-Friendly Municipalities

Municipalities that successfully promote development typically share goals such as:

  • Expanding tax base
  • Revitalizing downtown cores
  • Repurposing obsolete industrial sites
  • Attracting employers
  • Increasing housing supply
  • Encouraging mixed-use density
  • Leveraging transit corridors
  • Improving walkability

They aim to align private investment with public infrastructure planning.

 

Case Study Highlights 

Case Study 1: Allentown’s NIZ

By capturing state tax revenue growth within the NIZ district, Allentown incentivized private investment that transformed a struggling downtown into a regional entertainment and office hub.

Case Study 2: Pittsburgh’s Strip District

Zoning flexibility, riverfront redevelopment strategy, and adaptive reuse allowed warehouse conversions into tech offices, residential lofts, and mixed-use developments.

Case Study 3: Lancaster City Warehouse Conversions

Flexible adaptive reuse policy encouraged the transformation of obsolete industrial buildings into apartments and commercial space, revitalizing underutilized blocks. 

Case Study 4: Upper Macungie Industrial Boom

Industrial zoning flexibility combined with interstate access positioned the township as a national logistics hotspot.

 

The Importance of Specialized Knowledge 

Even in development-friendly municipalities, success depends on:

  • Understanding zoning nuance
  • Knowing where flexibility truly exists
  • Identifying political climate
  • Anticipating community response
  • Structuring incentive packages properly

A municipality may appear pro-development on paper but operate differently in practice.

 

Final Thoughts: Pennsylvania Is Evolving 

Pennsylvania remains a locally controlled, regulation-heavy state — but many municipalities are evolving.

Cities and townships that embrace:

  • Zoning modernization
  • Predictable approvals
  • Mixed-use flexibility
  • Incentive programs
  • Infrastructure coordination

...are attracting private capital and reshaping their communities.

For developers and landowners, the key is identifying where policy and opportunity align.

Some of Pennsylvania’s greatest recent successes — Allentown, Pittsburgh, Lancaster, Bethlehem, Cranberry Township, and others — demonstrate that zoning reform, incentives, and clarity can unlock extraordinary redevelopment and growth.

Understanding which municipalities truly support development — and how to navigate their systems strategically — is often the difference between stalled projects and successful outcomes.

In Pennsylvania, the right municipality matters just as much as the right parcel.