The Answer to Delaware’s Housing Shortage: More Housing, Less Government
By: Jane Brady, Chair, A Better Delaware
“This waiting list is not accepting applications at this time.”
If you are suddenly, or even chronically, in need of assistance in finding a home you can afford to rent, in Delaware, you are out of luck.
The above message is on every website listed for government assistance for housing in the State – the Delaware State Housing Authority, the New Castle County Housing Authority, and the Dover Housing Authority.
Those agencies provide rental assistance to low-income families for housing, as well as actual rental units in specific complexes, particularly for senior and disabled individuals, statewide. Hulling Cove in Lewes? Closed to applicants. Holly Square? Closed. Willis Road? Closed.
Renters are a significant part of the housing demand. According to the Joint Center for Housing Statistics, approximately 35% of the population rents where they live. Some rent out of choice, others by necessity. In any event, Delaware is an expensive place to rent. If you rent, the rents are high relative to the rest of the country, with Delaware ranking between 14th or 18th highest in the country, depending on the source. And, with the government literally shut down when it comes to supporting anyone not already in the programs, families are hurting.
Homeownership is expensive as well. Selling a house is more expensive in Delaware, with transfer taxes almost three times any other state. If you want to move – to a smaller home, to a bigger home, or out of state with a job opportunity- costs are high. The transfer tax for doing so, on a medium-priced house of $384,079 is over $15,000! That’s a hit to anyone’s pocketbook.
While the taxes are high because our legislature has passed laws to make them so, the price of housing is high because of demand. Estimates are that Delaware is in need of 14,000 more units of affordable housing for our lowest income level households. And, even more at the highest income levels. What is holding us back?
Taxes, construction fees and zoning laws are significant factors.
The answer to a housing shortage is more housing. Any kind of housing, no matter how much it costs. If new, high priced apartments or other housing is built, the units attract people to leave their lower priced apartments or old houses, which leave them vacant. As more vacancies are created, rents come down and the benefits filter all the way to the least expensive units.
Government regulations impose great costs on construction – with new and more oppressive requirements imposed, seemingly with each new session. “Green” costs and excessive micromanagement of construction features go far beyond assuring a buyer gets a safe and sturdily constructed place to live.
As a practical matter, Delaware is in a rather unique situation where many of the home buyers during, and just following, the pandemic did not vacate current Delaware housing units, but moved in from out of state, forcing prices higher. Higher price, higher collection of those pesky transfer taxes. We have written numerous times about the need to lower the transfer tax and remarked upon the huge amount of money the state and counties have received in recent years from that source but will not belabor the point here.
We applaud the recent zoning changes in several of our counties which allow for accessory dwelling units, detached or not, which are what has been historically known as an “in-law suite.” These changes are a positive addition to housing options and expand the number of housing units at a relatively small cost, and the occupant may either leave another unit available for a new resident or find a home when they previously could not.
We have heard the rumors and need to say – what we do not need is a moratorium on building. Every study (and common sense) suggests that more housing is the answer to a housing shortage. Lower taxes, reduced regulations that add costs to construction and zoning reforms, such as accessory dwelling units, cluster construction or planned commercial and residential projects like Village of Five Points in Lewes, are the better answers.
Our legislators and state leaders should take a hard look at how they can, with little effort, offer new and expanded options to families looking for a home, without requiring them to rely on government programs that cannot, and should not be required to, meet their housing needs.
Jane Brady serves as Chair of A Better Delaware. She previously served as Attorney General of Delaware and as a Judge of the Delaware Superior Court.