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Report: Delaware inland bays contribute $4.5B

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Little Assawoman Bay in Sussex County is among the waterways that contribute $4.5 billion annually to the state’s economy, according to a new study. | PHOTO COURTESY OF WIKIPEDIA

REHOBOTH BEACH – While Delaware’s coastal beach communities often get the spotlight in discussion of the First State’s tourism economy, advocates recently wanted to put a number on the economic value of the other side of the state’s environmental assets: its inland bays.

To accomplish that, the Center for the Inland Bays (CIB), a Rehoboth-based nonprofit that advocates for the protection, use and improvement of the Rehoboth, Indian River and Little Assawoman bays, commissioned a first-of-its-kind study.

Relying on a data analysis by Key-Log Economics, an independent ecological and economic research firm based in Charlottesville, Va., the study’s authors were careful to try to delineate the economy tied to Delaware’s ocean beaches and the one connected to the bays, examining only data west of Delaware Route 1 and within so many miles of the waterways.

Released earlier this month, the report completed with the University of Delaware determined that the bays contribute $4.5 billion to the state’s annual economy annually and support more than 35,000 jobs directly or indirectly in the state.


Chris Bason, an author of the study and a former executive director of the CIB, said he was surprised that the finely tuned data analysis turned up such large figures, but noted that it emphasized the waterways’ importance to the state. The three interconnected coastal lagoons in southeastern Sussex County cover 32 square miles with a watershed of approximately 320 square miles.

The top two industries contributing to that impact are residential and commercial construction and the food service industry, which together accounted for more than $1.2 billion of the economic impact. That likely comes as little surprise as Sussex County is seeing a flood of new residents coming for a beach life and lower taxes here, and housing has increasingly moved inland as communities are built out and home values rise. From 2017 through 2020, the number of new subdivision lots proposed in Sussex County averaged over 4,300 per year and over 10,000 building permits were issued each year during the same four-year period.

Bason said seeing those details in the data will help the CIB advocate for better land use planning to protect the environment in the face of such development. Loss of green space could increase runoff that would degrade water quality and harm the local ecology, as well as exacerbate natural floodwater protections.

“Our woods and wetlands are essential, natural features that are pollution filters and control floodwaters. They’re essential to have good water quality and so we have to protect them if we’re to meet our water quality goals,” he said. “We’ve seen funds from the state and the county government increasing in the past year, which is good, but we need to do a lot more to protect these areas before they’re gone.”

Working to improve water quality could also pay economic returns in the future, the study notes. The U.S. Environmental Protection Agency has estimated that waterfront home values would increase 18% with better water quality. Yet water clarity has decreased by 8 inches over the last 30 years, according to studies.

If the pollution control strategy promoted by the CIB several years ago was adopted, the study estimates that total home values could appreciate by more than $200 million. That value is derived not just from the beauty of cleaner water, but also a more vibrant ecosystem with fewer issues.

“In the 90s, the pollution was so bad that we had blooms of seaweed washing up on the beaches and there was a lot of fear associated with that … thankfully that didn’t continue and was abated because action was taken back then, but it’s not to say that that cannot happen again,” Bason said. “It certainly has happened over and over in Florida with the red tides, which are driven by nutrient pollution. There is an ecological catastrophe in the most brilliant and beautiful places, and we’re not immune to that.”

Aside from homes, the bays support a strong recreational industry that contributes $218 million annually, with boating and fishing leading the way. A 2018 state survey of outdoor recreational enthusiasts found that two-third of eastern Sussex households fished while nearly half canoed or kayaked.

“The water is big business for us down there,” Bason added.

One potential economic growth area the study found is aquaculture, as oyster fishing is still getting back up to speed after the state began leasing acreage in the bay to farmers for the first time in 38 years back in 2017. By 2020, there were 13 licenses issued, with more than 184,000 oysters harvested for revenue worth more than $112,000.

It’s an industry still in its infancy here, but the study points to Rhode Island as a comparison, where aquaculture supports more than 200 jobs and produces $6 million in revenue annually with a leasable farm area roughly the same size that Delaware has available.

“It’s a wonderful example of an industry that provides clean water and needs clean water – oysters are water filters, so they are cleaning the water while they provide healthy local food to our population. There is a lot of growth that can be had,” he said.

With the data and findings in hand, Bason and the CIB expect to be having more conversations with state and county decision-makers on how to protect the environmental and economic assets in Delaware’s three bays, Bason said.

“In the public policy space, dollars and cents is really the currency,” he added. “I think a lot of decision-makers in Delaware don’t understand [the bays’] value. I think you really have to live in Sussex to get it … This report is something that will really help, and it can be a baseline for us.”

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