The shortage of affordable housing has made each of us who rent our living quarters a target for a mugging by corporations and their investors, who simply want as much of our money as they can squeeze out of us. Draining excessive rent money from our economy and the fact that many of the corporations and investors don’t pay Delaware taxes, and may not pay U.S. taxes, doesn’t seem to bother many of our state legislators.
We tenants are not the only ones who are hurt by excessive annual rent increases. Every single person living in Delaware is affected, as millions upon millions of dollars are leaving the state each year in rent increases which have little bearing on the cost of operations. The money we no longer have can’t be spent in the businesses here. Business owners complain how the minimum-wage increase hurts them. If the employee is renting, that extra rent money goes into pockets of people who have no stake in the welfare of Delaware.
Before I lay out a solution for keeping affordable housing rentals affordable, I acknowledge there are some local landlords who are not greedy and are only seeking much-needed income. I am also grateful for the many legislators who work hard for their constituents. Unfortunately, there are legislators, on both sides of the aisle in key leadership positions, who either wear blinders or whose political philosophy seems to be “let them eat cake.”
Since housing is vital to our lives and our economy, I am proposing the creation of a Public Service Commission for Rent Control. As with utilities, this would allow a profit on the operating cost of all rentals of houses, apartments and leased-land communities. Increases in rent for capital expenses would be handled as they are for utilities. Annual rent increases would not be compounded on the asset value of the property but for what is actually being spent for the personnel, the maintenance and necessary operating expenses of the domiciles.
The Delaware State Housing Authority would be expanded to encompass all aspects of the housing, apartments and lot rentals. The cost of the expansion would be financed by a fee for each rental unit. That fee would be passed on to the tenant, who would save money from lower rent increases. The cost would be $4.17 per month ($50 per year) or $8.34 per month ($100) as the annual fee. A landlord with only two houses could be exempt. A task force could determine other exemptions.
The shortage of affordable housing has made it possible for corporations to place a stranglehold on all types of domicile rentals. Housing Alliance Delaware chronicles the high cost of apartment rentals in Delaware, while respected media publications provide verifiable evidence of exorbitant rents causing a crisis in the nation. Don’t believe me? I will share these articles with you upon request.
Even though the state can’t stop a landlord from selling, attorneys and lobbyists threaten that landlords will do just that. These landlord conglomerates, featured in the media, are willing to overpay for Delaware housing assets, thanks to our weak laws. Our laws permit tenants to cover the overpayment through unreasonable rent increases.
Leased-land homeowners have been priced out of buying their communities, as outlined in the law. One seller of three Sussex communities has taken measures to prevent homeowners from even thinking about buying the community by requiring an upfront, nonreturnable deposit of $2 million to bid. Where can seniors, retired military and low-income families find that much money to lose? The tenant homeowners will get to pay whoever buys their community with outrageous monthly rent increases one month at a time. More millions leave the state’s economy.
What makes it worse for Delaware, these corporations foist, arm-twist or mislead leased-land homeowners into long-term leases, guaranteeing that money will never return to the state. Why not discourage these pirates from buying in Delaware by creating a PSC for Rent Control? These corporations and limited liability companies don’t want to show how much they spend to operate their rental properties.
Every business in Delaware will benefit from reasonable rents for their employees. Economic development will be enhanced with a lower cost of housing. Every resident of Delaware will benefit. I call on every tenant renter to flood their legislators with emails and calls to make a rent-control PSC happen.
Fred Neil is a Dover city councilman.
