Commentary: DE taxpayers shortchanged by affordable housing lack

By Fred Neil

The lack of affordable housing in Delaware penalizes every taxpayer in the state. The state election holds the key to ending housing abuse in Delaware, due to campaign cash. Unless you know where to dig, your favorite member of the state Legislature may be aligned with special interests who aren’t concerned about Delaware’s housing dilemma or the economy of the state. Information is available on followthemoney.org.

Housing is the cornerstone of our economy. The headline of the Aug. 3 news release from the Housing Alliance read, “Affordable housing is out of reach in Delaware.” It continued: “In order to afford a modest, two-bedroom apartment at fair market rent in Delaware, full-time workers need to earn $21.96 per hour. This is Delaware’s 2020 Housing Wage. It is the 17th highest housing wage in the country.”

Buying a home and the land is out of reach for low-income families and many seniors. Buying a home on leased land, not subsidized by taxpayers, is an option. While the state Legislature has very slowly added protection from abuse, the leased-land community owners have been able to insert inequities and holes in the law to permit excessive rent increases.

It is important to taxpayers because exorbitant rent increases taken from homeowners can’t be spent in the local economy. The money goes in the pockets of investors, who do not pay Delaware personal taxes. The homeowners pay the property taxes, not the corporation that owns the community.

The need for housing has resulted in corporations willing to pay huge sums to buy leased-land communities in Delaware: MHC/ELS, Sun Communities, Hometown America and Michigan-based RHP found gold here.

After purchasing Murray Manor in New Castle County and my 55-plus community in Wild Meadows, RHP has jacked up the rents considerably. From the Wild Meadows monthly lot rent of $502.50 in 2017, my lot rent in 2020 is now $602.50. New buyers have been warned that if they don’t sign a 4% compounded long-term lease, they will pay $629 per month for lot rent. Arm twisting?

The permitted Consumer Price Index for All Urban Consumers (CPI-U) increase as of June 2020 is 1.367% or $10.08, a $16.42-per-month difference or $197.04 additional profit per year.

Not only does this price gouging take millions of dollars out of the Delaware economy from 40,000 to 50,000 families, but it also makes this form of housing less affordable and puts pressure on the minimum wage. Wouldn’t you think all elected officials would care?

You may not know the individual community owners, but you can look at the donations of the First State Manufactured Housing Association, representing the community owners. As reported in the Delaware State News in 2013, “Common Cause of Del. cites lobbying concerns in study” (May 1, 2013), “CC drew a correlation between legislators’ 2012 votes on Senate Bill 205 that dealt with rent increases to manufactured housing, and contributions received from First State Manufactured Housing. The inference was that contributions to legislators and support of their interests were tied together.”

The First State PAC was not the only money community owners contributed to candidates who voted against rent justification. Through the 2018 elections period, according to followthemoney.org, First State had donated over $130,000 to Delaware Republican legislative candidates and over $51,000 to Democratic candidates.

You can see how legislators voted on bills to protect seniors and low-income homeowners or you can ask them if they received contributions from First State and how did they vote? One of the most popular answers will be “unintended consequences,” if they give one. You can’t stop a community owner from selling.

There are candidates on both sides of the aisle who wear campaign cash blinders. Your vote in November is priceless to those candidates who don’t.

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