Affordable Housing bills propose funding, policy changes

Three-quarters of Delaware households that rent earn $80,000 or more per year but only 20% of homes for sale are affordable to them. | DBT PHOTO BY JACOB OWENS

DOVER — A package of bills aimed to address Delaware’s housing crisis through incentives, homeowner protections and other policies has been introduced in the General Assembly.

In October, the Delaware State Housing Authority (DSHA) unveiled the most recent Delaware Housing Needs Assessment which serves as a snapshot of housing trends and issues in the First State – and forecasting needs for the future. 

Most critically, that report showed that single-family homes were the state’s largest share of Delaware residences at 58% while 19% were multi-family complexes. Buying a home is challenging until the household earns more than $80,000 per year. Three-quarters of Delaware’s renters earn that — but only 20% of homes for sale are affordable to them.

In the face of a growing deficit of affordable housing, Sen. Russell Huxable (D-Lewes/Rehoboth Beach) has announced a slate of seven bills also called the Housing Agenda, to address many of the issues raised in that DSHA report.

“Housing is foundational for the individual, the family, our communities and businesses as well as the economy,” Huxtable said in a press conference announcing the agenda on Thursday. “We have a crisis in Delaware, and it’s impacting all those areas. No one bill will solve the issue. But with the support of my colleagues in the General Assembly and across the aisle, we can at least make progress today and take on tomorrow with the same intentions we have in this package.”

Huxtable is a freshman legislator who won his district over incumbent Sen. Stephen Smyk by a little over one thousand votes in 2022, becoming the first Democrat to represent Sussex County in that chamber in six years.

But Huxtable is also known for his long resume in the affordable housing sector, with roles in local nonprofits like NCALL, Interfaith Housing Alliance and the Milford Housing Development Corp. Leading up to unveiling the Housing Agenda, he held a listening tour on housing policies throughout Delaware with developers, advocates and businesses last fall.

With Sussex County and Middletown developing at an exponentially faster rate than other parts of the state, one chief proposal in the Housing Agenda would work to address one of the most pressing needs: workforce housing.

Senate Bill 22, co-sponsored by Rep. Bill Bush (D-Dover), would create a workforce housing program that would allow investors to be reimbursed through a grant up to 20% of capital costs associated with building affordable housing units. The threshold is also set at $25,000 minimum for investment. To be eligible, the housing project must be in high-density population areas. Projects that aim to qualify for federal low-income or state low-income housing tax credits would not qualify.

If passed, the Delaware Workforce Housing Program would be modeled after the Downtown Development District program and would be administered by DSHA.

“I think that this program takes into consideration the unique needs of the entire state. Those hard costs would be different from north to south,” Huxtable said. “If we just followed the Downtown Development District criteria, it would just leave out many areas. This would help craft a balance.”

Included in the Housing Agenda bill package are:

• Senate Bill 23 would require counties and municipalities to develop regulations that would allow construction for accessory dwelling unit per single-family homes, also known as “in-law suites.”
• Senate Bill 25 would lower the cost of building affordable housing projects by exempting  fully exempting low-to-moderate-income dwelling units from the state’s 2% improvement tax, which is currently levied on new construction valued at $10,001 or more built within a year of the land being sold.
• Senate Bill 244 would allow any county that collected a lodging tax to allocate some or all the proceeds to workforce and affordable housing programs. Right now, New Castle and Sussex counties are the only counties that collect a lodging tax and have a limit on how the money can be spent.
• Senate Bill 245  would extend the Office of Foreclosure Prevention and Financial Education and the Residential Mortgage Foreclosure Mediation Program permanently.  Both were created as temporary programs in the wake of the Great Recession; their sunset dates have been extended multiple times over the years. This bill would remove sunset dates entirely.
• Senate Bill 246  would create a dedicated revolving loan fund to help support the home repair programs that the Delaware State Housing Authority has operated for more than 30 years.  Seed money would come from the state General Fund or gifts from private residents.
• Senate Bill 247 would expand on manufactured housing community protections. This bill would create a workable system to ensure that manufactured housing community owners are unable to raise rents within 12 months of recording a health and safety violation.