New data shows Delaware's affordable housing shortage deepened by thousands of units in past year
The latest national survey of affordable housing availability finds the gap between the supply and demand in Delaware grew by 16 percent in the past year — among the most severe crises in the country.
During a Joint Finance Committee hearing last month, Delaware State Housing Authority Director Eugene Young pointed to a 2022 survey by the National Low Income Housing Coalition (NLIHC) to underscore the scale of Delaware’s affordable housing shortage.
Last year, that survey found that the state needed more than 18,000 additional affordable units to house every extremely low-income Delaware household.
Results from the most recent NLIHC suvey indicate that gap increased to over 21,000 units, meaning there are only 27 affordable and available rental units for every 100 extremely low-income households. Only seven states — almost all west of the Mississippi — have a lower ratio of affordable units to extremely low-income households.
Last month, Young noted it could take years to close that gap at the current pace of affordable housing construction.
A federal low income housing tax credit program that is a primary driver of new affordable developments only produces an average of 150 to 200 units each year, for example. Three roughly fifty-unit projects are currently in development through the program — one in Wilmington, one in Smyrna and one in Millsboro.
Housing Alliance Delaware Director Rachael Stucker says her organization is working on a bill to leverage real estate transfer tax revenue to increase the pace of development.
“A percentage each year of the state’s real estate transfer tax revenue would go into an affordable housing development fund," she said. "It would be state revenue that is ongoing and that can help fill this gap.”
Stucker also noted that while municipalities and counties currently receive a portion of real estate transfer tax revenue from transactions within their boundaries, those dollars cannot currently be used to fund affordable housing — a barrier she believes is due for reconsideration.
Gov. John Carney's 2024 budget proposal includes record spending on housing initiatives, but most of the more than $100 million in proposed investments would be one-time.
Those investments include a push to preserve nearly 1,000 affordable units that rely on subsidies scheduled to expire in the next several years — especially units in Sussex County. "One those units go market-rate," Young told lawmakers, "they will never be affordable again."
DSHA can either attempt to renegotiate a subsidy for the units or spend the same amount to subsidize one or more cheaper units; in other words, subsidizing two units in Laurel could be more cost-effective than preserving one subsidized unit in Rehoboth.
Young also told lawmakers that pandemic-era federal funding available to offer rental assistance to low-income households runs out this month.
“We’ve let everyone know that March will be the last date we’re able to pay out to," he said. "The federal government has let us know that this was not meant to be a long-term program. This was a short-term measure to help families.”
That program was able to provide over $130 million in rental assistance to more than 24,000 Delaware households since 2021.
Meanwhile, non-subsidized affordable units — meaning units that rent below market rate without subsidies — are also quickly disappearing, eliminating a housing option for low- and middle-income Delawareans who do not qualify for subsidized housing and can't keep pace with rent increases.