By Brian Gilliland

DOVER — The Home Builders Association of Delaware draws its membership from 350 companies representing 6,000 employees in the housing, development and real estate realms.

Kathryn Gillis, its executive officer, shared some of the group’s perspectives on affordable housing in the state.

Ultimately, she said, members are going to build what the market demands, but there are other circumstances beyond their control when it comes to affordability.

“There are many factors that must be considered when determining the size and price point of the homes a builder chooses to offer in a given subdivision. There are several factors over which the homebuilder has no control and which affect the cost to build and, ultimately, the selling price,” she said. “Primarily, these are overburdensome regulatory hurdles and the currently approved density levels.”

According to the association’s website, its legislative priorities are increasing unit density, an expedited review process, boosting funding for affordable housing programs and redeveloping commercial units into high-density multifamily properties.

By growing unit density, the supply of homes can escalate, stabilizing the per-unit profit, the association states, adding that higher density also promotes efficient land use and decreases sprawl.

Builders like effective land use, since finding the right parcel at the right price is something of a moving target.

“The carrying cost of the land acquisition, while working through the approval process alone, can push many projects out of the ‘affordable’ range,” Ms. Gillis said.

Additionally, land payments may precede consumer sales of residences, making delays costly.

“There is an ever-growing list of regulatory hurdles that slow projects down and cost a considerable amount of money,” she explained. “Furthermore, the lengthy approval process increases risk for all parties, as the economic landscape can change dramatically over a two- to three-plus-year timeline from acquisition to final approval.”

Sussex County, for example, recently adopted stronger perimeter buffer measures between residential neighborhoods, regulations that take effect in February 2025. The construction and development industries will need to account for these changes moving forward.

“It is also worth noting that many of the additional regulatory requirements add cost, with an intangible timeline for the return on investment for the end consumer. Some of the burden of regulation could be offset with increased density, however, density levels are dictated by state and local government,” Ms. Gillis said.

Plus, the Home Builders Association reports, the review process can take up to 24 months, even for land already zoned. The agency, though, seeks to shorten the time required for approvals.

Specifically regarding affordable housing, the website endorses a tax credit plan for developers that offer high-density multifamily projects that don’t exceed 40% of the area median income.

And, to reduce or eliminate the need to acquire new land for a development, the association backs proposals that would rework existing commercial spaces into high-density units, via grants or low-cost financing options, it notes.

Overall, Ms. Gillis continued, “as an association, we are acutely focused on engaging with elected officials at all levels of government to drive forward policies that address housing production and affordability.”

She added that the organization believes that increased density, an expedited review process, incentives for redeveloping commercial properties and additional funding would all dramatically improve the production and availability of affordable housing.

Staff writer Brian Gilliland can
be reached at 410-603-3737
or bg@iniusa.org.