Sussex County government has settled a federal fair-housing case with the U.S. Department of Justice and the Housing and Urban Development agency. As part of the settlement, county officials agreed to name a fair-housing compliance officer and develop an affordable-housing plan to ensure equal housing opportunities continue to be promoted.

The settlement allows developers of a once-denied housing project to resubmit their plans for consideration, while county officials will admit no wrongdoing, although the county’s insurance carrier will pay a $750,000 financial settlement in the case.

Sussex County Council signed off on two agreements in the case, triggered by a complaint filed by Diamond State Community Land Trust. The complaint followed the county’s 2010 denial of the New Horizons development planned near Laurel.

Following a Nov. 27 executive session, county council approved separate agreements with both federal agencies. The Justice Department and HUD have already approved the agreements. Council members Mike Vincent, R-Seaford, George Cole, R-Ocean View, and Joan Deaver, D-Rehoboth Beach, voted to back legal counsel's advice while Vance Phillips, R-Laurel, and Sam Wilson, R-Georgetown, voted against the settlement.

“I don't believe we did anything wrong and certainly not to the degree that warrants a $750,000 payoff – even if it is from our insurance policy,” Phillips said. “Additionally, I believe that elements of the decree are discriminatory in and of itself. Sussex County is exemplary in its efforts to help disadvantaged homeowners and those seeking affordable housing. This lawsuit is another example of our federal government run amuck."

Under terms of the agreements, Sussex County admits no wrongdoing, and no penalties or fines have been assessed. However, the county agrees to allow Diamond State to resubmit its subdivision plans, if it so chooses, for reconsideration before the Sussex County Planning and Zoning Commission.

“Today's groundbreaking settlement recognizes the importance of the obligation to affirmatively further fair housing in the activities of local governments. Actions that establish or continue barriers to full, fair housing choices deny Americans equal access to housing," said John Trasviña, HUD's Assistant Secretary for Fair Housing and Equal Opportunity.

Planning and zoning denies application

Sussex County Planning and Zoning Commission denied Diamond State Community Land Trust's subdivision plans, voting 3-1, on July 14, 2010. On Oct. 19, 2010, county council denied an appeal of planning and zoning commission's decision by a vote of 4-1.

The cluster subdivision plan, on 42 acres east of Laurel near Trap Pond State Park, included 50 single-family homes ranging in size from 1,350 square feet to 1,900 square feet and ranging in price from $115,000 to $150,000. Under the plan, homeowners would have owned the home while paying a $40 monthly lease to the land trust for the lot. Land trust officials said this would allow them to sell homes below market rates.

County officials said the project was a sound one but the location was wrong. Vince Robertson, assistant county attorney, said the applicant’s request for a cluster development must be in a town center, according to county code, but the proposed location of the development was six miles from Laurel. He said the smaller lots and homes would also have an adverse effect on surrounding property values. During public hearing testimony, neighbors also complained the development would have a negative effect on property values because most homes in the area are on large lots.

During testimony, Jim Fuqua, attorney representing the land trust, argued the subdivision is a permitted use in an AR-1 district as authorized by the county’s land-use plan, and the project was not requesting any special considerations, waivers or exceptions.

He said the applicant was not seeking participation in the county’s affordable housing program. He also said county officials have a track record of approving subdivisions in Level 4 areas, which are considered locations the state does not support growth.

County begins compliance process

“We are pleased that we are able to come to this agreement, and to put the matter behind us for all parties involved – most of all for the taxpayers and residents of Sussex County,” said County Council President Mike Vincent. “This settlement avoids further litigation and investigatory proceedings by the DOJ and HUD, it ensures Diamond State can move forward with its plans, and it protects the taxpayers from paying anything toward the settlement of this complaint. That was among the most important priorities for the council throughout these discussions.”

In the coming weeks, county officials will be working closely with federal housing officials, who initially received the complaint, about developing a plan to build upon the county’s affordable housing efforts, said county spokesman Chip Guy.

Sussex County’s Community Development & Housing Department already administers more than $1 million annually in federal block grant funding to help rehabilitate low- and moderate, owner-occupied housing and assist with sewer connections in the county. County government provides funding for staff in that office and directs an additional $70,000 annually toward housing rehabilitation costs. The fair housing compliance officer employed by the county would assist in coordinating these programs, Guy said. “We are required to name someone; the agreement does not say hire. It could be an internal, existing candidate,” he said.

Over the past 10 years, county council has adopted ordinances to encourage affordable housing construction and fair housing opportunities. Among those efforts are the county’s moderately priced housing unit program and rental program – both of which provide developers with density bonuses for including affordable housing in developments. Some developers have expressed interest in the programs, but to date no houses have been built under either program.

The county also adopted an ordinance allowing for garage/studio apartments to be built in various zoning categories throughout the county to help boost the affordable housing stock.

“Despite many of the claims in this case, we believe Sussex County has a solid track record of doing its part to help foster an environment for affordable housing and equal opportunity,” County Administrator Todd Lawson said. “Certainly, there is always room for improvement, and we recognize that. We believe this settlement gives the county an opportunity to expand on its efforts over the years, and to continue doing what it can to ensure quality, affordable housing for all our citizens.”