New Castle County, Delaware Enacts Affordable Housing Moratorium

February 2014Articles In the Zone

With the support of the County Executive, New Castle County Council overwhelmingly passed on January 28, 2014, an ordinance providing for a 180 day stay, extendable for an additional 90 days, of acceptance of land development applications incorporating the workforce housing incentives contained in the county’s Unified Development Code. The purpose of the ordinance, Substitute No. 1 to Ordinance No. 13-089, is to provide the county a period of time to review the existing workforce housing provisions and to revise and supplement as needed in order to craft provisions that can achieve better affordable housing results and home ownership opportunities.

Originally enacted in 2008 to address a perceived lack of new construction of low or moderately priced housing within the county, New Castle County’s workforce housing provisions established a voluntary mechanism by which developers could opt to set aside 20 percent of a project’s dwelling units for housing priced for low income and / or moderate income households and make a designated contribution to the county Housing Trust Fund, in return for various development incentives including a dwelling unit density bonus of up to 100 percent, site development and building standards relief and application fee waivers.

To date, the county’s workforce housing provisions have not been successful. Although the program was met with interest in its early stages, according to a county Land Use Department report, no land development applications have been submitted incorporating workforce housing incentives since 2011. A variety of factors are believed to be at play. Since the peak in 2007, real estate market forces have resulted in a material retraction of median home values. Another factor has been the ample availability in the current market of rental units. Additionally, various flaws in New Castle County’s program have been cited, including qualifying applicants, tracking the workforce units and their resale and certain code provisions being subject to differing interpretations. Since the adoption of the county’s workforce housing provisions, a total of 18 workforce housing plans have been submitted proposing in the aggregate 735 workforce dwelling units. However, over half of these units will not be built because the plan submissions expired by operation of law. At the time of adoption of this moratorium, a total of 341 workforce units are currently designated on recorded development plans, with approximately 131 of such units being apartment units, and a total of 31 units have received certificates of occupancy of which 29 are rental units. In the six years since passage of the program, the current workforce housing provisions have produced only two owned dwelling units. According to a county attorney, during this same period, the program was originally estimated to generate approximately $550,000 to the Housing Trust Fund, but instead to date has contributed just $272 to such fund.

Since mention of the possibility of adoption of a moratorium was announced this past Fall, five workforce housing plan submissions were recently filed with the county. An attorney for New Castle County has stated that each of the five plan submissions will be reviewed by the Land Use Department. If and when such plans are determined to have met all requirements of a workforce housing plan submission, thereafter the county Law Department will determine if such applications were received in time and are vested under the workforce program, existing prior to the moratorium. The moratorium does not stay the processing and review of existing workforce housing submissions, which will continue to be processed under the provisions applicable at the time of submission of such plans.

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