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Sussex adopts revised affordable housing incentives

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Sussex County Council has adopted a new ordinance that may incentivize affordable housing options for the workforce. | DBT PHOTO BY KATIE TABELING

GEORGETOWN — After a summer-long debate, the Sussex County Council has overhauled its rental program to offer more incentives in a bid to bring more affordable rental options.

The council voted on Oct. 18 to adopt an ordinance that revised the rental program to allow developers to build up to 12 units per acre in a multi-family project, compared to 2 acres in the previous ordinance. Housing projects that come through the Sussex County Rental Program (SCRP) will also receive expedited review.

In exchange, 25% of the units in the housing project will be made available for renters who have an annual income that is 80% or less than the county’s area median income. Those apartments must stay “affordably priced” in perpetuity and the ordinance only applies to housing projects in unincorporated areas of the county.

In theory, projects that qualify for the rental program would cut the permitting process from 12 months to as little as four, county officials said. But that is a rough estimate, and the county expects a better idea of how fast the process could work once a project applies.

“Housing costs are top of mind for everyone these days, especially teachers, health care workers, and service staff from the hospitality industry,” Council President Michael Vincent said in a prepared statement. “These are folks who want to live where they work, but often have to look miles away for something affordable. That has to change. We believe reworking our existing rental program is a good first step to helping people find their next home.” 

In Sussex County, the area median income for a household of four people is about $60,100. For a two-person household, it’s $48,100, and for one person, it’s $42,100.  According to Apartmentlist.com, the average cost for a one bedroom apartment in Sussex is $1,299 while a two bedroom is $2,113.

The 2019 Housing Needs + Market Analysis commissioned by county officials shows the fastest growing income group has been households with incomes above $150,000 tracking with recent reports of the county attracting retirees and wealthy residents leaving states with higher taxes to find a beach lifestyle. 

Sussex officials first created the rental program in 2006 in order to jumpstart the market with opportunities for affordable housing programs. But that program was unveiled at the peak of the housing boom, which soon fell in 2008 — just now development has recapture that momentum.

Only one project, the 15-unit Coastal Tides apartments, has made it through the county’s rental program. It opened in December 2021 after construction was delayed to remediate environmental issues. 

That project also changed hands five years earlier, and may not have been completed if not the affordable housing requirement was required with the zoning.

In the meantime, Sussex County may soon be seeing more inventory added to the market in the new year. Ocean Atlantic Company has partnered with Milford Housing Development Corporation on the Dutchman’s Harvest complex, of which the 42 apartments out of 140 will be reserved for those in a targeted income range. The rest will be sold starting at $200,000.

Sussex County Director of Community Development Brandy Nauman told the Delaware Business Times that she and planning officials have met with roughly a dozen developers in the last year who were interested in the ordinance and were looking to take advantage of it.

Affordable housing is on the minds for many of Sussex County’s top employers, specifically as they look to attract and retain talent. Big Fish Restaurant Group co-founder Eric Sugrue told the Delaware Business Times that he was working on a housing project for some of his employees off Route 1 purely because of the issue.

“It’s such a huge problem, and we’re trying to do what we can to help our staff find options,” he said. “It’s telling to me that with our Wilmington locations, this isn’t an issue, but there’s been times when some of our staff can’t find someplace affordable in Lewes and Rehoboth, and they end up going to Milford and Georgetown. We’re looking at losing people when that happens.”

While Sugrue noted that Big Fish’s housing project would not be impacted by the county’s revised ordinance, he said that it was in the best interest of his business to build projects where possible.

“It’s getting harder and harder for people to make the drive if they’re moving out of the area. Gas and other costs are not cheap these days,” he said. “We need to have workers living here, and we all want year-round housing for them.”

Grotto Pizza is also reimagining their corporate headquarters, rebuilding it to include 12 apartments as part of a mixed-use project. This project won’t be tapping into the new incentives outlined in the SCRP, but Grotto Pizza Vice President Jeff Gosnear said it will be used for its workforce.

“Our hope is to offer the apartments first to our management staff at a discounted rate, then the public,” Gosnear said. “With the cost of construction in Sussex County these days, it is very hard to make a project like this work out financially unless, like us, you already own the land.”

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