Sussex County Council to vote on affordable housing reforms next week

Why Should Delaware Care?
High rents have been a consistent problem in Sussex County, especially near the beaches. A program meant to encourage developers to build more affordable housing has not produced enough new housing, so the county council will soon vote on whether to ease requirements to join it. 

Sussex County Council will likely vote next week on whether to allow higher rents and more density in the county’s affordable housing program.  

This would be the second time the council loosened restrictions on the Sussex County Rental Program in hopes of encouraging more participation. 

Only two projects have used the program since its creation in 2008. Housing developers say that’s because the rent caps are too low and the density incentives are too small for any housing projects to be financially feasible.

County Administrator Todd Lawson said the county worked with housing developers when drafting the reforms.

“The developing community was saying what we all know to be true… If you continue to keep the regulations that you have today, we’re probably not going to build any more [affordable homes],” Lawson said.  

Lawson said the council will likely vote on the reforms at the next council meeting. In the meantime, residents can submit comments about it online. 

The county is facing pressure from the state to address the growing affordable housing shortage around the county’s popular beaches. Next week’s vote could be the first major action the county has taken on the issue in years. 

Jon Horner, president of the Delaware Homebuilder’s Association, said he thinks the reforms do not go as far as he would have liked, but that they will help make the program more economically viable to join. 

“I think you’ll see new [housing] projects immediately,” Horner said. 

Sussex County has a projected need of 2,643 affordable rental units by 2030, according to the  Delaware State Housing Authority’s 2023 Housing Needs Assessment. 

At the meeting, council members Jane Gruenbaum and John Rieley appeared to support the proposed reforms, while Councilman Matt Lloyd expressed concern that they don’t go far enough. 

Councilman Steve McCarron’s comments appeared to be neutral, and Council President Doug Hudson did not make any comments. 

The few public comments about the proposal from Tuesday’s meeting and the last county council meeting were generally supportive. 

What are the proposed reforms? 

Currently, in order for a housing development project to qualify for the Sussex County Rental Program, 25% of its housing units need to have a maximum rent of $810 for a one-bedroom, $970 for a two-bedroom and $1,120 for a three-bedroom.  

Those rents are meant to be affordable to households making half of the county’s median income, or $48,750 a year. 

The proposed reforms would keep that 25% threshold and add a tiered approach that raises the rent caps. 

The rents would have to be between $970 and $1,295 for a one-bedroom apartment, between $1,165 and $1,550 for a two-bedroom and between $1,345 and $1,790 for a three-bedroom. 

Lower priced apartments would count as more units for the purpose of reaching the 25% threshold. 

For example, a housing developer would be able to charge a higher rent if a quarter of the units were rent-restricted. But they could decide to make only 15% of the units rent-restricted if they charged a lower rent on those apartments.  

The proposed reforms are less sweeping than what was originally recommended by the   Sussex County Land Use Reform Working Group.

The County Council formed the working group after three newcomers won seats on the elected body by beating incumbents in the November 2024 elections. The victories largely were fueled by resident anger over how the five-person council had previously handled development. 

The working group recommended the council raise the rent caps to be affordable for households making 80% of the area median income and lower the threshold to 15%.

Councilman Matt Lloyd said he wanted the council to pass something closer to what the working group recommended, but Council Vice President John Rieley said the reforms would make the program flexible enough to still attract more projects.

“That’s what they said the last time,” Lloyd responded, referring to the council’s previous unsuccessful attempt to reform the Sussex County Rental Program. 

Horner, who was a member of the working group, said the changes are not likely to convince every housing developer to join the program, like he had originally hoped. 

But he said the reformed program would work well for properties outside of the prime real estate markets of downtown Lewes and Rehoboth Beach.

“It’s certainly far better than what it was,” he said.