Sussex County Council voted last week to offer new incentives for developers to build denser affordable housing as the housing shortage in the county worsens.

A 2019 study by Housing Alliance Delaware found that someone earning minimum wage would have to work nearly 100 hours a week to afford a two-bedroom apartment at a fair rent in Sussex County. With the growing demand for housing created by an influx of high-income residents, the county’s workforce – the bulk of which works in low-wage industries like retail, hospitality and manufacturing – the council sought a way to increase the availability of affordable rentals near existing workplaces.

The revised ordinance grants automatic approval to developments in the county’s designated growth areas — including downtown areas — that reserve at least a quarter of the units for the county’s Affordable Rental Program, among other eligibility requirements.

Sussex County Housing and Community Development Director Brandy Nauman says previous incentives offered to developers to build affordable housing – introduced in 2006 – have failed to generate interest.

“With our existing rental program, the only thing we offered was an expedited review and a small density bonus, but there was no guarantee of approval,” she said. Typically, she added, a new development would take 12 to 14 months to receive approval.

The revised ordinance retains the density bonus, allowing developers to build up to 12 units per acre, more than four times the current average density in growth areas in Sussex County. It also includes new enforcement mechanisms, including a requirement for developers to pay monthly county market rent for any affordable unit they rent at market price; these fines will go to the county’s housing trust fund.

All new affordable units built under the program will now have to remain affordable in perpetuity – a change from the previous order which allowed units to reach market rate after 30 years.

She notes that other program requirements, including that approved developments be serviced by public sewers and arterials, are intended to mitigate sprawl and stay in line with the county’s strategic plan.

“We’ve done our best to make sure it’s not going to be isolated apartment buildings in the middle of a cornfield in Gumboro,” she said.

Sussex County Treasury Director Katrina Mears adds that developers who take part in the scheme will also save money on sewer connections by building in areas of growth. “If they were to build somewhere far enough away from our processing plants, they would have to pay more,” she said. “There is a cost for the new infrastructure that we pass on to the developer.”

The previous program only resulted in the construction of a single mixed-income development in Lewes. A related program to encourage construction of affordable housing for low- and middle-income buyers stalled after the 2008 financial crisis. Nauman says the county plans to rework that program.

She adds that many successful affordable rental programs elsewhere use mandatory affordability requirements, but Sussex County isn’t ready to take that step.

“We just don’t have the support of a mandatory prescription now, so in my mind that’s by far the closest we’ve ever come to it,” she said.