Commentary: Delaware taxpayers being shortchanged on leased-land housing

Delaware housing is at a crisis level due to the lack of affordable housing. The cost of housing is a factor in the yin and yang of minimum wage. According to Tom Koprowski, of the National Low Income Housing Coalition, who presented at the Housing Alliance Delaware meeting this year, stable housing is linked to better health and student education outcomes.

Those concepts are easy to understand. On May 9, Delaware legislators passed a House Concurrent Resolution No, 41, and then they promptly forgot that not all housing needs are taxpayer-subsidized. Leased land homeowners do need more equitable laws.

Leased land housing is the hottest recession-proof industry with the affordable label being less so. Some legislators lament the good old days, when school teachers, with their summers off, would bring mobile homes to Sussex County. They could tow them away if the lot rents got too high or the landlord maintenance was lousy.

Manufactured homes have become permanent housing primarily for the low income and seniors on fixed income. Some out-of-state residents, charmed by Sussex County beaches, buy vacation homes. While these part-time residents pay taxes and spend money in the Delaware economy, some legislators want to hang them out to dry to protect community owners who take money out of the economy.

These corporations don’t pay taxes to the state as the burden of tax increases can be shifted to home owners per Title 25, Chapter 70. The vast majority of their investors don’t pay personal income tax to Delaware.

Fred Neil

There are those state legislators who have compassion for the homeless, and are willing to provide oversight when taxpayers’ money is used for subsidized housing. There is no compassion or oversight for those of us who pay for our homes and do not require taxpayer help. We are fodder for obsessive profit-taking rent increases removing money from the hands of tenants who no longer can spend it with state retailers, services and restaurants.

A 19-page annotated document “Private Equity Giants Converge on Manufactured Homes” sent to legislators demonstrates the full effect of the Leased Land Industry and the gigantic profits zooming out of the state with no returns. It contains verifiable proof and is the best independent document on the subject I have ever seen as an elected official.

Some of the domestic lease land community owners do reinvest in Delaware and pay personal income tax, but the out-of-state corporations don’t. You can’t discriminate between local and out-of-state businesses, but the state legislature can remove the inequities in the law, making it more difficult to raise unwarranted increases. No matter how lenient our laws are, when a domestic community owner wants to grab gold and sell out, the legislature can’t stop them.

The more unenforceable the law is, the higher the prices out-of-state corporations will pay for what once was affordable housing.

Currently, the law requires home owners to pay for capital improvements on land we do not own. The value of our homes decrease with the added rent increases. Not only do we pay the expense once, the landlord benefits from the depreciation of the improvement they did not pay for, but we never stop paying the increase?

How about a market rent that permits an increase if a person buys a $50,000 home for $25,000 and the rent is increased by 20%. The increase now applies to every home owner who paid $50,000 or more for their homes!

How about if the landlord is paying increases for utilities, insurance and taxes and the rents are raised, but if these expenses drop, shouldn’t the rents drop? They don’t! Home owners could be forced to pay for $200,000 in pay raises for the community owner’s employees under the law.

One thing I’ve learned in my 85 years, nothing stays the same. To live in the past is to court disaster. While some legislators lament the good old days before laws were passed to protect the vulnerable, the Delaware economy is being robbed. If our homes were in the free market and we could move our houses easily, we would not need 99% of the laws.

You can urge legislators to vote to remove the inequities in the law, and allow us to spend our money in the Delaware economy.

Fred Neil represents the 3rd District in Dover City Council.

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