County holds off on housing issue

By all accounts, the committee studying a moderately-priced housing initiative has taken a major step in the right direction, but Sussex County Council reached consensus at the Oct. 11 council meeting that the program still needs work.

According to Bob Lecates, director for the county’s Community Development & Housing, he and the committee members had tried to slim down the traditionally inches-thick ordinances other counties have assembled in trying to create a housing inventory for the working class.

And when Lecates came before council with the program guidelines, asking for permission to move forward and ask County Attorney James Griffin to translate them into ordinance form, he pressed them to move. They could fine-tune it as they went along, he suggested — the important thing was to make a start.

But by Oct. 11, and in the light of some slightly late-breaking, but well thought out, recommendations from various quarters, Lecates had come to agree — the committee needed to add some meat to the bones.

Toward that end, council voted unanimously to send the draft Moderately-Priced Housing Unit (MPHU) code back to committee. Council closed the public hearing, sort of, leaving the record open for additional written comments until Oct. 31, and then planning to schedule another public hearing after the committee’s rework.

Council President Finley Jones congratulated committee members on their progress to date, and to Lecates suggested they’d assembled a main framework — with that in place, fleshing out the details should prove more manageable.

As drafted, Sussex County’s MPHU code runs less than 20 pages. From the findings:

• The county is experiencing rapid population growth, and most of the increase is from the “young elderly,” financially well-off pre- or early retirees.

• Increased affluence has generated increased demand for public utilities, health and human and other governmental services, and services from the private sector.

• And affluence has also driven housing markets. From the ordinance, “The most recent real state data suggests that a household earning 80 percent of the area median income cannot afford a home anywhere in Sussex County.”

• Further, “Based on the most recent Department of Labor data, 86 percent of the Sussex County workforce earns less than 80 percent of the area’s median income.”

Suffice it to say, many Sussex Countians would be eligible for MPHUs.

Council Member George Cole has remained skeptical throughout the process. As he reiterated on Oct. 11, the committee had strayed afield, and the program as presented wouldn’t help the people it was initially intended to help.

As Cole suggested, developers would most likely take maximum advantage of the program’s bonus densities (and expedited permitting, etc.), but build the bare minimum MPHUs.

As it stands, developers get a sliding scale bonus density (and the other perks) for building 15 percent of their residential projects as MPHUs, depending on which level of income earners could afford to buy them.

If the homes are affordable for “Tier A,” households earning 100 to 125 percent of median income, developers get a 20-percent density bonus.

Cole suspected that was as far as the program was likely to go — but even for those earners, 100 to 125 percent would translate to a reasonable financing ability for mortgages in the $160,000 to $210,000 range. As Cole pointed out, homes in those price ranges were getting harder and harder to find around Sussex County.

Developers would receive an additional 5-percent bonus density for reaching down to tiers B and C (median income, which is $38,600 in Sussex County, and 80 percent of median, respectively). But for Tier B, they’d need to produce homes for sale in the $123,000 to $163,000 range, and for Tier C, in the $95,000 and $127,000 range.

The program incorporates various eligibility guidelines (county residency, up to date with taxes, etc.) and various controls to preserve the MPHU inventory (if sold before the end of the control period, reduced or even zero profit), and there was considerable discussion on these and other points.

But details aside, Cole suggested the program as proposed would prove as ineffective as the one New Castle County instituted a few years ago (still no takers).

Lecates, however, contested that, saying he had a short handful of interested developers already.

For approximately two hours, advocates for the working class and proponents of laissez-faire housing economics, and people in the middle, offered comment, and by the end of the meeting, there were enough new topics for consideration to populate a whole committee’s worth of subcommittees.

Lecates said attendance at MPHU code committee meetings had dwindled over the seven months they’d put in to develop the program this far. However, listening to new perspectives on Oct. 11, he said he’d be hoping to enlist some of the speakers for the second round of MPHU development.

In other business, council unanimously approved the refinance of approximately $19 million in revenue bonds, originally issued in 1994. Finance Director David Baker expected the county to garner a 0.5 percentage point advantage with the refinance.

Baker also discussed increasing payroll contributions to the county’s employee pension fund, by 14 percent. The move will bring the county to 100-percent funded for pensions by 2007, assuming financial managers continue to realize on-average 8-percent returns.

Returns were positive over the past year, but down sharply, Baker pointed out, reflecting the usual volatility in stock and bond markets. He noted swings from 20 percent up to 10 percent down over the years, but said the county continued to (slightly) exceed its 8-percent goal (again, on average).

Once pensions are funded, Baker and associates will turn to health benefits — federal accounting standards will require the county to work toward funds in reserve to offset those anticipated costs, by 2014.

“If we catch that up, we will be doing something,” Jones interjected.

Baker recommended a pair of changes regarding the pensions, one covering when elected officials vest in their plans (five years, age 50, or 10 years, age 55), and the second adding a year of service to pension calculations, for employees who’d served two or more years with the military.

• Council also approved some local grants — Cole okayed $1,200 toward the study of a potential historical district in Ocean View and Council Member Vance Phillips checked off $500 to the Frankford Community Group, for Neighborhood Watch signs.

° And County Administrator Bob Stickels reported on Sussex County Emergency Services (SCEMS) Director Glenn Luedtke’s pending visit to Mobile, Ala. Luedtke will take part in a four-day seminar focusing on “the administrative, behind-the-scenes issues that often crop up during disasters,” Stickels said.