Housing affordability gap continues to widen

Home sales are brisk in the Cape Region. Retirees are purchasing properties to move here in their golden years, and many people are purchasing second homes to enjoy the beach lifestyle.

But, housing officials say there is a downside to the trend. The rising cost of housing means there is a large sector of the workforce who can't afford to live here.

As people with higher incomes retire to the area, affordable housing in eastern Sussex is becoming harder to find.

Jobs in retail and the leisure and hospitality industries make up the largest number of jobs in the resort area, but most workers in those jobs don't earn enough to rent or purchase a home or apartment in eastern Sussex. And this problem is growing, said Patricia Kelleher, executive director of the Delaware Housing Coalition.

Kelleher will be one of the speakers at a Wednesday, March 22 League of Women Voters of Sussex County affordable housing forum.

The higher cost of housing on the eastern side of the county drives up average Sussex costs. Rents and home costs in the resort area are high compared to central and western Sussex County. The median cost for a new house in the county is more than $269,000, according to the Sussex County Association of Realtors.

“It's increasing and becoming a scary trend in Sussex County,” Kelleher said. “The gap is widening, and more and more people who work in eastern Sussex County have to live in western Sussex.”

A typical house in eastern Sussex sells for about twice as much as a typical house on the western side of the county.

Kelleher said housing costs should not exceed 30 percent of a person's or family's income.

She said about 25 percent of people who work for low wages who can find rentals are spending 50 percent or more of their income on housing. “That means something has to go, and it's usually healthcare and proper nutrition for kids, which creates more problems,” Kelleher said.

She said two people working full time and combining their wages stand a chance of affording housing, but if they have children, other factors enter in. “The cost of day care complicates the equation,” she said.

Without subsidies, the cost of day care per child in Sussex County is $150 to $190 per week.

“Everything combined creates a lot of job instability with a lot of people living with family members or friends or renting subpar places particularly on the western side of the county,” she said.

She said many workers are forced to make tough choices about what to pay for each month. “If they need a car, sometimes it comes down to paying for car repairs or paying rent,” she said.

Workers with lower-paying jobs in eastern Sussex share housing costs with others or they live in western Sussex and drive to work each day, Kelleher said. Transportation costs can then become an issue. A true indication can be witnessed daily as a seemingly endless line of cars and trucks make the commute east on Route 9 each morning to jobs in coastal Sussex.

Working to afford an apartment

In Sussex, a worker needs to make nearly $19 an hour – about $39,500 per year – to afford the average two-bedroom apartment at $987 a month, according to the Delaware Housing Coalition's “Who Can Afford to Live in Delaware” report.

The average wage for workers who rent is less than $11 an hour, or about $23,000 per year, a gap of nearly $8 per hour or $16,000 a year. The coalition estimates a worker making minimum wage of $8.25 would need to work two full-time jobs to afford an apartment.

Delaware's two-bedroom rental-housing wage of $21 is 11th highest in the nation, according to the National Low Income Housing Coalition.

It would take a wage of $14 per hour to afford the average one-bedroom apartment at $730 per month, still a gap of $5 per hour for those wanting to rent.

It would take an annual wage of about $60,000 – with no more than 30 percent going to housing costs – to afford the average Sussex County house.

Kelleher blames tight credit for keeping low-income wage earners who could be first-time homebuyers from obtaining a mortgage. “For some, a mortgage would be lower than rent, but they can't qualify because credit has tightened up,” she said.

“People want to work, and they want to have something to show for it. That's becoming increasingly difficult,” Kelleher said. “It's like a perfect storm that includes transportation, housing costs, lack of healthcare, daycare costs and seasonal work.”

Kelleher said most of the apartment complexes recently constructed or being planned in Sussex are for those making higher-end wages. Affordable units for low- to moderate-income residents would help ease the pressure, she said. “There is a real high demand for rental units, so landlords can be more selective also.”

The waiting list in Kent and Sussex counties for affordable rental housing programs is more than 5,000 residents, and the average waiting time for placement is 18 months, according to the Delaware Housing Coalition.

SUSSEX STATS

Population: 2010 – 197,000; 2020 – 228,000 (estimated)

Households: 2010 – 79,400; 2020 – 94,500

Owner occupied housing – 78 percent

Rental housing – 22 percent

Manufactured housing – 19 percent

Rental assisted housing – 2,300 units

Estimated substandard housing units – 4,100

Sources: U.S. Census; Delaware State Housing Authority

Housing issues topic of league forum

Affordable housing and substandard housing issues will be the subject of a League of Women Voters of Sussex County land-use forum from 7 to 9 p.m., Wednesday, March 22, at the county administration building, 2 The Circle, Georgetown. Speakers include Trish Kelleher, Delaware Housing Coalition executive director; Melody Taylor, Region II HUD branch chief; and Brad Whaley, director of Sussex County housing and community development.