Density increase among options to enhance affordable housing in Sussex

GEORGETOWN — Modifying the zoning code to increase density in designated growth areas is one of several strategic recommendations to enhance affordable housing in Sussex County.

In a final report delivered last month to Sussex County Council, consultants from Virginia-based LSA Planning also recommended establishing a local housing trust fund and preserving the existing supply of affordable housing.

“While the county has been doing a really sort of aggressive job at allowing for new homes to be constructed, they are coming in at prices and rent that aren’t designed to meet the needs that we see most challenging,” said Lisa Sturtevant, founder/president of Virginia-based LSA Planning.

Housing opportunities and market evaluation punctuated the 8-month study facilitated through consultation with housing spectrum, stakeholders, developers and county staff.

The first strategy was zoning modification to incentivize developers, expand permitted uses and re-evaluate density to promote housing affordability in growth areas identified in the county’s comprehensive plan.

According to LSA’s report, a zoning code that permits a range of housing types can help create a range of housing prices that naturally serve households with varying incomes.

With appropriately scaled incentives, market-rate developers could set aside some affordable housing units without public subsidies.
This would promote diverse communities and reduce concentrated areas of poverty, creating housing options near employment centers, according to the LSA report.

“Overall, we found that there is a gap between what is available in the market and what is affordable to the worker housing at different income levels,” Ms. Sturtevant said.
Cost of land, labor and construction plus regulation and other cost-associated costs are primary reasons for the gap.

Ms. Sturtevant said in Sussex County 10,700 households are cost-burdened, meaning at 50 percent or higher.
Sussex County has initiated several programs targeting housing needs.
In April 2013, County Council adopted an amendment to its Moderately Priced Housing Program ordinance expanding the household income qualifications of the program.

This made the program available to those households earning 50 percent to 125 percent of the Area Median Income for Sussex County.
To inspire developers to voluntarily participate in the MPHP program, the county offers some incentives. For any development with more than 35 planned units, 15 percent of the total units constructed are moderately priced.

In turn, developers would receive a density bonus, allowing them to fully utilize the zoning capabilities of the subdivision, as well as an expedited review through the County’s Planning and Zoning Process.
In December 2008, Sussex County Council approved the Sussex County Rental Program, which was created because of the significant lack of affordable rental housing in the county.

However, no affordable rental housing was created as a result of the ordinance, due largely to the change in market following 2008, county council amended the ordinance in hopes of encouraging stronger participation in the SCRP.
In 2017, Housing Alliance Delaware reported that approximately 18,194 renter households in Sussex County faced a severe shortage of affordable rental units.

LSA’s study found that existing incentives do not provide projects with enough density to realistically support income-restricted units while maintaining their financial viability.
Jennifer Skow, LSA senior associate, said currently there are “not enough incentives to make the developers want to buy into this.”

Bonus density is an option. This would include designated “open space” in proximity to the development.
Homeownership projects need to achieve densities of at least three units per acre and rental projects need to achieve at least 12 units per acre in order to be financially feasible with some share of affordable units as part of the project, the study indicated.

Under county AR-1 zoning two building units are permitted per acre.
“As you increase density you are either increasing the number of set-aside units or you’re infusing lower income targets,” said Ms. Skow. “We hope that by including a couple options it allows for developers to self-select which option they want that better works within their model.”
“Density is the solution, but it is also the problem, right?” said county councilman Irwin G. Burton III. “Sitting up here, density increase is not the most welcomed thing in this chamber. So, it’s the solution and it’s the problem.”

“The density recommendations are about targeting housing that is going to come anyway,” said Ms. Sturtevant.
“I am just saying that when I sit up here, I hear about density,” Mr. Burton said. “And you say, ‘Well, here’s the solution right here.’ I care about affordable housing. I agree … affordable is absolutely what we are here to do, to listen to. But that solution is density. And then next Tuesday you not going to here but somebody else is going to be here and they are going to talk about density. I think the two need to somehow have a middle ground.”

LSA’s report suggests the county consider establishment of a local housing trust fund, which could help fill the gap between the cost of producing market-rate housing and producing below market-rate housing for lower-income households, especially at 50 percent AMI (Area Median Income) and below.

This could be used to leverage other funding, the report stated.
“It certainly gives us something to think about,” said county council president Michael Vincent.

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