Welcome back to the legislative session. It is time to think outside the box.
As a lowly Dover city councilman, I bring unglad greetings with verifiable evidence of a rental crisis affecting every single renter of a house or apartment in Delaware, as well as leased-land homeowners. We have relatively few landlords who base their annual rent increases on the cost of the operation. I even met one who has not raised rents for six years. Unfortunately, we have far more who see the shortage of affordable housing as an opportunity to gouge.
With no stake in Delaware except to make money, many landlords use our inadequate laws to squeeze the finances of low-income and middle-income seniors and retired military, as well as deftly remove excessive annual rent increases from the Delaware economy and transfer the money into the pockets of investors, only a tiny number of whom pay Delaware taxes.
Part of the fault belongs to Congress and the lack of oversight of the quasi-government agencies, the bargain lenders Freddy Mac and Fannie Mae. Unfortunately, Freddie Mac and Fannie Mae are better at creating and sustaining millionaires than they are in creating and sustaining their goal of affordable housing.
Unless you believe that the business of a private company should stay private and not pay attention to the workers who make private businesses successful, then we should dissolve the utilities’ Public Service Commission and let them have their way with us. You think inflation is bad now?
A Public Service Commission for Rent Control would permit a profit on the actual cost of the operation while the asset value of the property grows, only more slowly. This would not prevent a property owner from selling. However, the buyer may not be willing to overpay if they know the profit would be based on the actual cost of the operation and not compounded based on what it paid to buy the property.
All the previous evidence I have sent you legislators is still available. Waiting to do something to control rents will cost the state an enormous amount of money, as it will continue to leave the economy in increasing numbers.
I had an interesting conversation with a concerned member of the House, who was looking out for a friend building houses to rent. As I see it, even though the cost of building houses has increased, that developer will rent those houses to people who have the wealth to do so. Should a tenant leave, that rent is open to an increase of any amount. However, if the tenant wants to continue to rent, the increase in rent would be based on the cost of maintaining the operation, including the PSC’s agreed-upon profit. Profits would not be compounded on the increased asset value of the property, which could be higher or lower than the original value.
I read in Patrick K. O’Donnell’s book, “The Indispensables: The Diverse Soldier-Mariners Who Shaped the Country, Formed the Navy and Rowed Washington Across the Delaware,” about the heroes of our Revolutionary War that brought about our democratic republic: “Republicanism postulated the establishment of an organic state in which citizens would sacrifice their private desires for the public good and the interests of society as a whole.” Maybe Republicanism does not mean that anymore, but helping our citizens have a domicile they can afford certainly helps our businesses grow in a healthy economy.
Sponsors for a PSC rent-control bill will be needed. Your thoughts are appreciated, your actions more so. Please help pass the following bills affecting leased-land community owners:
The following bills are not controversial:
Fred Neil represents the 3rd District of Dover City Council.
