the committee of 100
home about us committees meeting notes scholarship fyi archives links contact


 

JUNE 2008

HOUSING AFFORDABILITY IN DELAWARE

It is becoming more and more difficult for employees of Delaware businesses, young college graduates, teachers, police officers, nurses, paramedics, and others in professional, service, and technical fields to find affordable housing in New Castle County and Delaware. New Castle County has passed a workforce housing ordinance to provide incentives for affordable housing components in private residential development. Other jurisdictions are doing the same. Now, the mortgage crisis has complicated the affordable housing conundrum.

At the June 6th University of Delaware-sponsored "Affordable Housing and the Mortgage Meltdown" Symposium, former Secretary of the U.S. Department of Housing and Urban Development Henry Cisneros said there are two million homeowners still facing foreclosure across the United States. According to the Delaware Housing Coalition, even before the current crisis, during 2000-2005, there was a 52% increase in mortgage foreclosures in Delaware, with 17% of those mortgages purchased with two or more loans, 34% with no down payment or with more borrowed than the purchase price of the home, 17% with adjustable mortgage interest rates or balloon payments, and 22% purchased from someone other than the homeowner. Now, foreclose filings have hit an all-time high for Delaware, with an 87% increase in May 2008 over May 2007. New Castle County's foreclosure increase May 2007-2008 stands at 72%, Kent at 45%, and Sussex at 139%. Delaware's mortgage delinquency rate, 3.15%, is now the 17th worst in the U.S.

The Delaware Housing Coalition (DHC) has just released its Second Annual Report, Who Can Afford to Live in Delaware? (June 2008), which paints a grim picture of Delaware's growing affordable housing predicament. Whereas the issue of housing affordability in Delaware has consistently been one of access to housing, now, financing and insecurity have been added as key issues.

There is good news. Delaware ranks among the highest in the nation (6th) in its share of home ownership, although the rate fell between 2003 and 2006 (77.2-75.8%). The Corporation For Enterprise Development (CFED) reports 79% home ownership for whites and 51% for minorities in 2007 and ranks Delaware 38th in housing affordability, 34th in the median value of mortgage debt, and 24th in the rate of mortgage foreclosures.

Some numbers from the DHC:

  • First quarter 2008 median price for housing sold was $230,000 in New Castle County, $210,000 in Kent, and $258,500 in Sussex (from $236,500 in New Castle County, $205,000 in Kent, and $279,000 in Sussex during the 4th quarter of 2007).
  • Median household income in 2007 was $67,191 statewide, $72,100 in New Castle County, $58,700 in Kent, $55,100 in Sussex.

  • In New Castle County incomes grew by 37% 2000-2007 while housing costs rose 56%; in Kent incomes grew 43% vs. housing costs 79%; in Sussex it was 40% vs. 70%.

  • A New Castle County household earning 100% of the Median Family Income (MFI) can afford only 44% of the available housing supply, a similar Kent family can afford 46% of available housing supply, and a Sussex family 37% of housing supply.
  • Low Income (LI) households earn 80-100% of area median income, and at 80%, can afford only 24% of the available housing supply in New Castle County, 34% in Kent, and 32% in Sussex.

  • Very Low Income (VLI) households earn 30-50% of the area median income and, at 50%, can afford only 11% of the available housing supply in New Castle County, 19% in Kent, and 12% in Sussex.

  • Extremely Low Income (ELI) households earn less than 30% of area median income and, at 30%, can afford only 4% of the housing supply in New Castle County, 14% in Kent, and 12% in Sussex.

  • Only an estimated 15% of total workers (61,250) earned $62,800 or more in 2007, enough to afford the typical house price of $237,000.

  • Of the 229,860 owner-occupied housing units in 2005, only 1.6% were for sale; 70% had a value of more than $150,000; fewer than 17% cost less than $100,000.

  • There are 12,040 substandard (deficient in at least two structural systems) housing units in Delaware– 8,135 owner-occupied units and 4,814 rental units.

  • 51% of all workers in New Castle and Sussex Counties and 59% of all workers statewide have insufficient income to afford a two-bedroom apartment in their county of employment.

  • Two-bedroom Fair Market Rents (FMR) range from $932 in New Castle County to $743 in Kent and $685 in Sussex.

  • The median hourly wage is $17.60 in New Castle County, $13.90 in Kent, and $12.12 in Sussex. There are 291,420 workers (141,600, or 49%, earning less than median wage) in New Castle County; 57,810 workers (26,180, or 45% earning less than median wage) in Kent; and 72,930 workers (35,130, or 48%, earing less than median wage) in Sussex. In no county is the median wage a 2-bedroom housing wage.

  • 25,000 Delaware households are "at risk," paying more than 30% of their income for rent or are on one or more waiting lists for assisted housing.

The Delaware Housing Coalition's (DHC) Report argues that "a major factor in rising housing costs is the rising price of land and the pattern of land-use development for housing," noting that 75% of 2000-2006 building permits were for single-family homes, while only 11% were for multi-family construction. The The DHC pegs land costs at 29.3% of the cost of housing and argues that denser, more compact development would make housing more affordable. The DHC credits New Castle County for creating a housing trust fund dedicated to creating affordable housing and for passing its workforce housing ordinance to provide incentives for developers to build moderately-priced units in new developments, Kent County for implementing an Adequate Public Facilities Ordinance, and Sussex County for passing a voluntary Moderately Priced Housing Unit Program, all of which call for greater density as a key step towards making housing more affordable.

John Bravacos, HUD Regional Director, Region III, an "Affordable Housing and the Mortgage Meltdown" Symposium panelist, echoed the call for more dense development and added that the mortgage meltdown may provide an opportunity to correct our poor land-use planning. He called, first, for form-based zoning to reduce the land-use approval time, with its obscene cost, which currently "burns up the ability to provide affordable housing"; second, for land-use planning to locate affordable housing around trains and mass transit; and third, for everyone to be megacognizant, to be mindful and knowledgeable about all of the components which go into planning for housing to be affordable and communities livable.

In addition to increased, continual funding, the DHC calls for promoting good governance, creating a permanent housing inventory, preserving all affordable communities, prioritizing those most in need, mandating inclusion, and resisting the NIMBY opposition.

Beverley Baxter