Why Should Delaware Care?
After a state report cited the need for nearly 20,000 additional affordable housing units in Delaware last year, legislators came to Dover with a handful of bills aiming to support housing stock diversity. In the end, they passed the majority of the proposals on the table.
As the legislation wrapped for the year, multiple bills related to Delaware housing passed on the chamber floor during the session’s final night.
Seven bills sponsored by State Sen. Russell Huxtable (D-Lewes) made their way through committees and floor votes with only one not passing. Other lawmakers also had their bills and acts passed to address Delaware housing.
Lawmakers also approved a new “Affordable Housing Production Task Force” to examine the best practices in building affordable housing. The task force was proposed by Rep. Kendra Johnson with HB 442.
The task force would have to issue a final report identifying barriers and solutions to Delaware’s affordable housing supply by March 1, 2025. The 20-member task force would be disbanded after the report, unless reapproved by the General Assembly.
The bills come as Delaware continues to address housing needs in the state.
The Delaware State Housing Authority reported a need for 19,400 affordable rental units in 2023. Some of the bills in the package aim to address this need and fill gaps by removing some barriers to build or offer affordable options.
Here’s what was on the table.
PASSED
Workforce housing
SB 22 was introduced to incentivize investments in workforce housing projects in urban and surrounding communities. The grants would cover 20% of an investment in a new development. Grants could not be awarded to developments also pursuing grants for low-income tax credits, according to the bill.
Investments in a new community must be greater than $25,000, according to the bill.
Rent discrimination
The chamber passed SB 293, sponsored by Senate Majority Whip Elizabeth “Tizzy” Lockman (D-Wilmington), to add protection for renters receiving government aid. The bill adds an amendment to the Residential Landlord-Tenant Code and the Delaware Fair Housing Act.
Under the new bill, landlords could face punishment for rejecting tenants based on their source of income, including government-sponsored programs like Section 8 vouchers.
The act comes with a sunset date of Dec. 31, 2028, unless legislators decide to extend or shorten the amendment’s effective date.
HB 440 also passed, adding housing status as a protected characteristic in employment law. The bill was sponsored by Rep. Sophie Phillips (D-Bear) and would prevent employers from discriminating against an individual seeking a job based on their housing status.
The amendment adds onto other protected statuses in the employment search like race, religion, sexual orientation, age and other factors.
Another one of Phillips’ bills, HB 439, adds the same protections for people searching for homes or rentals, making landlords unable to discriminate based on a prospective tenant’s housing status.
Realty transfer taxes
SB 25 creates a realty tax exemption for affordable housing developments. The current 2% tax applies to construction projects greater than $10,000.
Realty taxes are one-time fees imposed during the change of ownership in a project. By removing the tax, it seeks to limit the costs associated with the construction of affordable units.
Lodging taxes
SB 244 brings new breath to the discussion on Delaware’s lodging taxes.
An amendment to a current lodging tax bill, SB 244 would allow funds from that tax to be applied to workforce and affordable housing developments. New Castle and Sussex counties currently apply a 3% tax to rent, hotel rooms and tourist homes.
In Sussex County, those taxes are already able to be used for beach nourishment, dredging, economic development, tourism, recreation, water quality and flood control projects, the bill said.
Foreclosure programs
SB 245 permanently extends services offered by Delaware’s Office of Foreclosure Prevention and Financial Education. The bill would also remove the sunset date for the Residential Mortgage Foreclosure Mediation Program.
Assistance with foreclosure, default notices and loan reinstatement would all be offered in English and Spanish on its website.
According to the bill’s synopsis, the programs were introduced in lieu of the Great Recession of 2008. As a result, the bill would also adjust the current law to be in compliance with current Delaware legislation.
“It is clear that the need for these programs will continue for the foreseeable future. In recognition of this reality, this Act removes the expiration dates from the programs,” the synopsis said.
Home repair
With the passage of SB 246, home repair programs directed by Delaware’s State Housing Authority would receive a dedicated fund for low-income home repair.
The fund targets low-income and very low-income homeowners, but has a clause for smaller landlords to receive funds. The bill would protect tenants from rent increasing as a result of any loan taken by a landlord.
Appropriation should be distributed statewide, wherever local need is the greatest, the bill said.
Manufactured Housing
SB 247 offers renters in manufactured housing communities protection from rent increases if a landlord doesn’t address safety issues.
According to the bill, the health or safety issue must have been present within the last year. If landlords are notified of that underlying issue, they are unable to raise rates until it’s been addressed.
If rent increases and the issue hasn’t been resolved, they must immediately reduce the rate, the bill said.
HB 212, a bill proposed by House Speaker Valerie Longhurst (D-Bear), also passed with the aim of protecting residents from rent increases. The bill limits how much manufactured community owners may increase rent based on increases the previous year.
The bill also adds new reporting guidelines for these community owners, and requires them to report the amount of homeowners using lot rental assistance credits and the status of their eligibility.
FAILED
Accessory dwelling units
SB 23 would’ve cleared the way for accessory dwelling units and removed some of the barriers to construction. ADUs are smaller housing options already built on an established lot.
The bill would give homeowners the right to build one ADU without needing to go through local government, and local governments would be ordered to pass ordinances that allow the construction of ADUs no greater than 1,000 square feet.
“Accessory dwelling units are a valuable form of housing that can serve to increase Delaware’s supply of affordable housing, promote compact urban and suburban growth, and provide the option for a convenient living arrangement for seniors, students, and other residents,” the bill said.
SB 23 was the only one of Huxtable’s seven housing bills to not see a vote.
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