Why Should Delaware Care?
Certain state and local leaders argue that building new homes is the best long-term solution to Delaware’s housing crisis. But renters and their advocates say that approach doesn’t address the immediate pressure of rising rents, arguing instead for limits to how much rents can increase.
Prospects are uncertain for a Wilmington City Council ordinance that would limit residential rent increases, as the measure does not appear to have enough support on the council to override a possible veto from Mayor John Carney — who opposes the measure outright.
Introduced last month by Councilwoman Shané Darby, the ordinance is intended to address an ongoing housing crisis in Delaware, marked by rising rents and a shortage of affordable units.
But some state and local officials have openly criticized rent stabilization measures, instead saying that the construction of new homes is a better, long-term solution to the crisis. Those critics have included Carney and Matthew Heckles, director of the Delaware State Housing Authority.
If passed, Darby’s ordinance would prohibit landlords of private rental units in Wilmington from raising rents by more than 3% a year, or by even less during years when the consumer price index falls below that figure.
The legislation exempts places such as public housing units, owner-occupied properties with three or fewer units, school-provided student housing, and new buildings during their first 10 years of existence.
This bill also allows landlords who have owned their property for more than a year to request an exemption to the 3% increase cap if they can show financial burdens, such as rising taxes, insurance, or government-mandated repairs.
The city’s Department of Land Use and Planning would be in charge of handling landlord requests, while the Department of Licenses and Inspections would enforce the law.
“It isn’t just about protecting the poor, this is about working-class and middle-class residents, the backbone of our city, who are being priced out of their homes year after year,” Darby said during a May 8 meeting of the City Council’s Community Development and Urban Planning Committee.
Darby, a Democrat who has made housing equity a focal point during her four years on city council, is currently positioning herself for a larger political role. Last month, she announced plans to run next year for a seat in the state House of Representatives, where she’s expected to challenge incumbent Rep. Nnamdi Chukwuocha (D-Wilmington).
Darby had proposed a similar rent stabilization ordinance last year, but the bill never made it to committee for consideration.
The adoption of various forms of rent stabilization — or rent control, which freezes rent prices — have been most common in coastal areas of the United States, such as New York and San Francisco.
But the effects of those measures are not agreed upon.
One study from Stanford University concluded that rent stabilization in San Francisco reduced the number of rental units within the city, and caused developers to shift toward building higher-end units.
Another study, jointly produced by researchers from the Urban Institute and from several universities, concluded that rent stabilization can increase the number of units in an area that are affordable to the lowest-income renters.
‘This won’t be easy’
Darby’s bill this year is drawing attention not just from city residents but from state officials.
Early this month, Heckles, the Delaware State Housing Authority director, sent an email to Councilwoman Maria Cabrera voicing concerns about the legislation and asserting that the solution to affordable housing is building more affordable homes.
“This won’t be easy, and it won’t be quick, but this is the solution. It is critical that Delaware not close the door on this path, and I believe rent control will do exactly that,” wrote Heckles in an email to Cabrera on May 7.
Heckles – who previously served as chair of the board of commissioners of the Wilmington Housing Authority during the Purzycki administration and later the regional administrator for the U.S. Department of Housing and Urban Development – said this type of ordinance could send a message to developers that Delaware may cap their financial returns on housing investments.
“What is done in Wilmington has implications across the state. It’s the largest city in the state,” he told Spotlight Delaware.
Asked why he said he sent the email to Cabrera, Heckles said he had known her “for a long time, and so I thought I would reach out and let her know, you know, my thoughts on that bill.”
Heckles’ email was sent a day before city council members were set to vote on the legislation during the Community Development and Urban Planning Committee meeting to decide whether to advance the bill to a vote of the full 13-member city council.
During that committee meeting, officials from Carney’s office voiced concerns about how the legislation would be enforced, saying that the Department of Land Use and Planning doesn’t have the manpower or skillset to enforce the bill.
Daniel Walker, deputy chief of staff for the mayor’s office, also echoed Heckles’ stance about focusing on increasing the affordable housing supply.
“Our position is that we double down on what we know is working in increasing the supply of affordable housing across the city of Wilmington,” Walker said.
Throughout Delaware, average rents surged almost 24% in 2021 – marking the second highest increase nationwide behind only Florida, according to a report from Rent.com. The following year, the average rent continued upward another 14.5%. Rent prices began to stabilize thereafter.
In Wilmington, current data around rent varies. Apartments.com reports that average rents have held steady over the past year at around $1,560. But Rent.com shows a sharp increase in rental costs of 26% year-over-year for one-bedroom homes to $2,042.
About 54% of city residents are renters, and almost a quarter of the city’s residents live below the poverty line, according to U.S. Census data. The median household income in Wilmington is $55,269, or 30% less than the state average.
Rental assistance disappears
As residents struggle with rising rents and low incomes, one of the state’s direct support systems for renters has quietly disappeared.
On May 7, the Delaware State Housing Authority shut down its Housing Stability Program, which had provided emergency rental assistance and eviction prevention services to hundreds of residents across the state. The program began one year ago.
The program was funded through the U.S. Department of the Treasury’s Emergency Rental Assistance Program and provided $8.2 million to Delaware, which assisted more than 1,500 households, according to Ashley Dawson, director of communications for the Delaware State Housing Authority.
The federal funding expires in September, but Heckles said they completed their goal to ensure all funds were used so none would be returned to the U.S. Treasury.
The May council meeting
Dozens of renters wearing t-shirts that read “The rent is too damn high” and “Housing is a human right” stood in support of Darby’s measure during a city council meeting earlier this month.
“When rents jump $200 to $300 a month, families are forced to skip groceries, postpone medicine, or leave their communities straight up,” said Brandon Fletcher, an organizer with the Wilmington Tenants Union.
Shyanne Miller, a coordinator for the Wilmington Tenants Union and H.O.M.E.S. Campaign, said that more than 450 renters have reached out to her organizations to express their concerns about rent spikes.
The H.O.M.E.S. Campaign, which advocates for affordable housing and tenants rights, is currently running an online petition that directs supporters of rent stabilization to send messages to city officials. Over 1,500 people have done so, according to the petition website.
Miller said she and other advocates have also mailed letters to Carney, and received responses saying that he supports housing stability but that “rent stabilization is simply not a proven tool to accomplish this goal.”
The topic of rent stabilization also came up at the state level last year when Rep. Larry Lambert (D-Claymont) proposed a similar bill to Darby’s, but one that would apply to rental units statewide. The bill didn’t get far, but it began a public discussion in the state around the rent crisis and its urgency.
Lambert said he is currently in discussions with landlords about the affordable housing crisis, but noted that he hasn’t heard solutions beyond them not wanting bills that limit rent increases. He said he still believes that rent stabilization is a practical short-term solution.
At the May 8 city council meeting, local landlord organizations like Greater Wilmington Housing Providers and the Delaware Apartment Association also voiced their concerns with Darby’s legislation.
They cited a litany of concerns, including not being able to raise rents after making renovations; not being able to cover the costs of maintenance; and not knowing whether the city would grant a rent-increase exemption after investing money into a property.
“Tenants in controlled units [will] become a privileged class, and the uncontrolled units will see rent increases to subsidize the other units. Existing units will suffer in terms of maintenance and then go vacant,” Wilmington landlord Adam Bivens said.
Many landlords warned that enacting rent stabilization could force them and developers to sell properties and leave the city, leaving them to out-of-state investors who don’t maintain the properties.
It is not yet clear whether those landlords’ arguments persuaded any council members. But it is clear that council members Christian Willauer, Coby Owens, and Trippi Congo remain in support of Darby’s legislation.
“We need to do something about the rising cost of rent now, and this helps stabilize people’s rents while we’re putting in place other long-term solutions like more housing that people can afford,” Willauer said in an interview with Spotlight Delaware.
Owens said Darby’s bill won’t “stop rent increases,” but argued that it would slow them “a little bit.”
During the May meeting, council members Maria Cabrera, Alexander Hackett and Yolanda McCoy voiced concerns, including how the bill would be implemented. Hackett also questioned where money from sanctions on landlords would go. McCoy expressed worries that rent increase limits would amount to a punishment for landlords who don’t take advantage of tenants.
Early in the meeting, At-large Councilman Hackett even asked Darby to hold the legislation for the council to discuss it further, but she refused.
City Council ultimately voted to advance the bill out of the committee, after hearing more than two hours of public comment.
The full city council is scheduled to discuss the ordinance on May 29, then will hold a vote on it on June 5.
To date, four councilmembers have expressed support for the measure while Councilman James Spadola, the council’s sole Republican, has expressed his opposition.
The bill needs seven votes to pass the 13-member council. It would need at least nine votes to override a potential veto from Carney.
If the legislation does become law, Darby said the new regulations would need to be paired with additional housing policies, such as reforming the city’s Office of Licensing and Inspections. She noted that her legislation would also create a Housing Stability Subcommittee, which she said would play a key role in developing those policies.
“Landlords and developers have gotten comfortable treating people like ATM machines, assuming, ‘Oh they can afford it,’ and each year rent increases are piling up with no accountability,” Darby said.
