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Even in a slumping economy the cost of buying and owning a home in the Cape Region, especially in Lewes and Rehoboth Beach, is increasingly out of reach for many who hold jobs in the resort corridor.
Lewes – in an ongoing effort to address its lack of what is called affordable housing, also called workforce housing – is continuing to look for ways to ensure that homes for retail sales clerks, pharmacy technicians, janitors, bank tellers, nurses, teachers, police officers and others earning moderate incomes are available in the city.
“These are common occupations but their median wages have not kept pace with inflation. Homes for them are nowhere near affordable,” said Marlena Gibson, a Delaware State Housing Authority representative.
Lewes Mayor and Council and members of the Lewes Planning Commission attended a Monday, Oct. 6 special meeting on affordable housing where Gibson and Van Temple, executive director of the Diamond State Community Land Trust, provided information about programs that could help the city to begin fulfilling its commitment to make workforce housing a reality in Lewes.
Lewes’ comprehensive plan recognizes that to remain a fully functioning community there must be “a mixture of homes and rental units that are affordable to people of varying income levels.”
But in a city where building lots alone sell for $300,000 or more, finding land for a single-family affordable home, or for an affordable multifamily housing unit community, is challenging.
Gibson said the housing affordability gap continues to widen – the difference is growing between median home prices in Sussex County and a mortgage that would be affordable for those earning median incomes.
The affordability gap and qualifying mortgage amounts are directly related.
Gibson used a graph showing the amount of mortgage for which those working in several professions in Sussex County would qualify.
•Emergency medical technician – $75,000
•Paralegal or carpenter – $95,000
•Retail sales manager – $113,000
•Elementary schoolteacher – $117,000
•Police officer – $126,000
•Registered nurse – $183,000
None qualify for a $275,000 mortgage – the median selling price of a home in Sussex County.
Gibson said many dual-income and most single-income households fall into the affordability gap.
She said the gap is also a problem for those who rent apartments or homes in the county. Gibson said the average monthly rent in Sussex County is $685, and to afford it a renter must earn at least $13.17 an hour.
However, many who are working in the resort fall below that income requirement.
Hourly wages according to housing authority statistics:
Waiter/waitress – $8.13
Janitors/cleaners – $10.35
Retail sales clerk – $9.70
Pharmacy technician – $11.16
Preschool teacher – $10.36
Bank teller – $11.93
Possible solutions
Gibson said communities are able to establish zoning code, which requires affordable housing.
She said the goal is to establish a stock of affordable housing and to make certain that it isn’t concentrated in one area.
She said municipalities need to provide for-profit developers with incentives or cost offsets to build affordable housing, with participation that is voluntary or mandatory
Gibson said Sussex County launched a voluntary program in 2006 targeting potential homeowners living and working in the county and meeting specific income requirements.
The program includes a restriction prohibiting resale of the home for 20 years.
“Programs can be developed in many ways to meet the needs of your community,” Gibson said.
Land trust concept
The Diamond State Community Land Trust is working to establish long-term affordable housing by acquiring buildings or land on which homes could be built for income-qualified buyers.
The trust retains ownership of the land, which the homeowner leases for $40 a month. Temple said the land-lease fee is set by land trust directors and would always remain about what it is today.
He said homeowners obtain their own mortgages and can sell the home whenever they decide, but only to another income-eligible buyer and then only at a restricted resale price.
Temple said 2 percent of homes built in Delaware are constructed by nonprofit agencies; for-profit companies build 98 percent.
“We’ve got to get for-profit companies into the game,” he said.
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