Sussex County holds housing workshop as state, builders and nonprofit outline supply, zoning and transit hurdles

Sussex County officials, state housing agency staff and housing advocates convened a workshop Feb. 11 to review long-term shortages of affordable and workforce housing, county-level income and rent data and possible zoning, fee and transportation reforms to encourage more diverse housing production.

The discussion opened with Caitlin Delcalo, chief strategy adviser at the Delaware State Housing Authority, who framed affordability in federal terms and said the U.S. Department of Housing and Urban Development defines housing as affordable when a household pays no more than 30% of gross monthly income on housing costs. “HUD considers housing to be affordable if the household is paying no more than 30% of its gross monthly budget on housing costs,” Delcalo told council members and attendees.

Why it matters: presenters said Sussex County faces a two‑sided problem — a market that has produced mostly single‑family detached houses, and a shortage of rental and ownership options affordable to households below median incomes. Combined with limited by‑right density, local permitting steps and transportation constraints, speakers said those factors are inflating prices, squeezing lower‑income renters and reducing the practical reach of federal vouchers.

Most important findings

- Area median income and affordability: Delcalo used the county’s 2023 AMI (area median income) for a two‑person household — $71,200 — to illustrate affordability bands. She noted that a household at 50% AMI in Sussex would have income of about $35,600 and that a household at 100% AMI would see a 30% affordability threshold near $1,780 per month for housing costs.

- Rental market gaps: DSHA’s statewide housing needs assessment, Delcalo said, shows large shortages of rental units for the lowest income bands. Western Sussex has roughly 1,900 renters at 0–30% AMI but far fewer units priced at that level, producing a shortage of about 971 units; East Sussex showed an almost 1,200‑unit shortfall at the same income band.

- Wage and job examples: Delcalo and other presenters cited occupation data to show how wages map to AMI. A median registered nurse in Sussex earned $84,555 in 2023 (about 118% AMI), while median pay for food service workers and orderlies placed those occupations well below 60% AMI with maximum affordable rents under $800 per month.

- Rents and homelessness: Rachel Stucker, executive director of Housing Alliance Delaware, said rents have risen sharply in recent years: statewide fair market rent for a two‑bedroom rose nearly 18% from 2023 to 2024; for Sussex County she cited a roughly 47% increase from 2020 to 2024. “From 2023 to 2024, the fair market rent for a two‑bedroom rental unit statewide … increased by almost 18% in 1 year,” Stucker said. She reported statewide unsheltered homelessness rose by almost 60% between 2020 and 2024 and noted correlations in multiple national studies between rising rents and increased homelessness.

- Development subsidies and vouchers: Delcalo summarized how DSHA operates as both a public housing authority and the state housing finance agency. She explained that development subsidies include federally administered Low Income Housing Tax Credits awarded by state HFAs to produce rental housing for households at or below 60% AMI, and that operating subsidies (housing choice vouchers) subsidize tenant rent shares. She also described DSHA’s State Rental Assistance Program (SRAP), a state‑funded voucher stream for referrals from partner agencies.

- Construction costs, time and regulation: Mike Bridal, president of the Home Builders Association of Delaware and a civil engineer, presented a breakdown of per‑house costs using a prototypical subdivision example (roughly 2,000 sq. ft. median‑price house). He showed that site preparation, lot costs, fees, bonding and required off‑site improvements can add roughly $150,000 to each lot before vertical construction begins, and that regulatory and permitting components and interest/carrying costs further raise final prices. “For every thousand dollars that you increase the cost of a home, 140,000 households in The United States are priced out,” Bridal said, urging caution on adding incremental fees that would raise final prices.

Council questions and local constraints

Council members and staff asked presenters about: whether housing calculations account for seasonal or tipped incomes (Delcalo said seasonal workers and tips are not separately modeled in the AMI tables), voucher acceptance by landlords (no universal requirement for rental‑program participants to accept vouchers), and upzoning or by‑right density changes (several council members and staff noted existing zoning districts that allow higher densities but observed conditional‑use or overlay requirements often add time and public hearings).

Presenters and staff repeatedly returned to two practical barriers that they said slow or deter affordable production: (1) permitting and conditional‑use processes that lengthen development timelines and add carrying costs; and (2) the transportation funding model for road improvements. Bridal argued that the current practice — where individual developments are studied and the last project that tips an intersection into failure must pay the largest share of improvements — drives unpredictability and “piecemeal” road spending. He recommended a broader, predictable fee or transportation improvement district (TID) to pool developer contributions and enable more strategic projects.

Proposed local approaches and examples

Speakers offered a menu of actions councilors could consider: - Increase by‑right densities or create a defined growth zone where smaller lots, duplexes, townhomes and small multifamily are allowed without conditional use; Kent County was cited as a nearby example that reduced minimum lot sizes and allowed duplexes and townhomes by right. - Encourage missing‑middle housing types (duplexes, triplexes, four‑ to six‑unit buildings) and reduce minimum lot sizes where appropriate to lower per‑unit site costs. - Use incentives — density bonuses, fee waivers, transfer‑tax exemptions for deed‑restricted affordable units, or public land donations — to encourage preservation of environmental resources while enabling higher density on other parcels. - Consider county‑scale transportation funding mechanisms (TID or comparable impact‑fee framework) to make road work predictable and phased for multiple projects rather than reactive to the last approval that triggers a level‑of‑service failure.

What was not decided

The workshop was informational and did not produce ordinances or binding direction. Presenters framed recommendations for future county consideration and relayed specific program data (voucher rules, LIHTC role, SRAP referrals). Several items — precise voucher counts for Sussex, current DSHA public‑housing vacancy rates and the county’s detailed undeveloped land inventory by level — were discussed as “to be provided” by agency staff.

Votes at a glance

- Motion to approve the Feb. 11 agenda: Moved by Council member McCarron; seconded by Council member Riley. Vote recorded as yes from McCarron, Riley and Grumman. Outcome: approved.

- Motion to recess until 1:00 p.m.: Moved by Council member Gruenbaum; seconded (name recorded as “Second” in the minutes). Vote recorded: Lloyd yes; Gruenbaum yes; Riley yes. Outcome: recessed until 1:00 p.m.

Ending

Presenters asked the council to consider zoning changes, incentive packages and a transportation funding plan as next steps, and offered to return with additional data (voucher counts, vacancy rates, and targeted commute/heat‑map data) for follow‑up meetings. County staff and presenters identified a state working group and the statewide housing needs assessment as resources to coordinate future changes. The workshop closed with a scheduled noon recess and a return to regular council business at 1 p.m.