First affordable home yet to be built in Sussex County

By Ron MacArthur
Cape Gazette staff
Details are still being tweaked in the county’s moderately priced housing units program – nine months after the Sussex County Council passed an ordinance to help create more affordable housing for middle-income residents.
The program is in place for county residents with moderate incomes starting at $31,000 to qualify for a one-bedroom townhouse. Although 500 units are proposed as part of the pilot program, not one house has been built. Houses must sell for $160,000 for one bedroom to $222,000 for three or four bedrooms.
The average price for a new house in the county is around $280,000, with the price nearly double that in most areas in the Cape Region. Three developments - including Villages of Elizabethtown in Milton - are included in the first round of the initiative.
Bill Lecates, director of the county’s community development and housing, said he had hoped houses would be occupied by now, but he understands the nature of the building industry.
“It’s a voluntary program,” he said. “It’s very time consuming and does not happen overnight. At least we will have some possible inventory down the road.”
Under the program, developers are given special considerations with greater density and expedited plan reviews for providing affordable housing within new developments. During a workshop Tuesday, Oct. 9, to discuss any possible revisions to the program, most of the talk centered on time limitations.
Under the current ordinance, if a house is not sold within 180 days it can revert back to normal market price. If the property is resold, after 60 days, the county can purchase it or opt to place it back on the market for 90 days. In addition, to be eligible for the program a potential homeowner must be a county resident for one year.The current ordinance passed in January 2006.
Councilman George Cole, who is a Realtor, questioned many of the requirements. He thought the one-year residency requirement was too lenient, and 180 days to sell a house was unrealistic in today’s real estate market.
“It won’t work with these time periods,” Cole said.
Cole said he was afraid developers would take advantage of the system by putting units in the program knowing they would not sell within the 180-day time period. “I’m concerned this is not realistic, and it has the potential to be messed around with,” he said.
He said the time limit should be tied more to the market or the Multiple Listing Service (MLS) average in the county. Councilman Vance Phillips disagreed, reminding his fellow councilman that the program was a pilot program that needs to be left alone to see how it works.
“The market is not an indicator whether these units will sell or not because they are so substantially below market value,” he said.
“It’s not logical to jack up the price if the market is dead,” Phillips added.
Marlena Gibson of the Delaware State Housing Authority said 180 days for a first listing and 90 days on a resell was standard among similar programs. However, the one-year residency requirement was not standard. The residency requirement was much longer than in other programs, she said.
“This is a pilot project and we should stick with it and ride it through. I agree with the expert,” Phillips said.
Phillips noted that $120 million in real estate was transferred in September. “I don’t see where it’s all down and slow out there.”
The council did not make any changes in the time requirements, but several amendments to the ordinance have been proposed. Lecates said most deal with simplifying the regulations within the ordinance and adding more administrative action, while deleting some council action, to speed up the process. In addition, the incentive to have fees waived was removed. The changes will be discussed at the Tuesday, Oct. 16, county council meeting.
“This is a pilot program and we knew that the working group overseeing the program would come up with additional scenarios we may have overlooked,” he said. “We had no template to go by.”
Lecates reminded the council that a new employee needed to be hired in the county’s community development and housing department to replace Albert Phillips who recently retired. The new staff person will have duties involved with the moderately priced housing units program.
“The new person will set the program up and get it running and get the process set up,” County Administrator David Baker said.
Lecates said the market has changed and there is a lot of interest in affordable housing. The second round of developer recruitment for the program will begin in three or four months. “But, if somebody is not on top of the program 24-7, it will be a nightmare,” he said.