My take: The rental housing crisis

 The good news is tempered by the urgent need for upwards of 20,000 units in Delaware to alleviate a critical housing shortage. Upgrading affordable housing in Newark, Wilmington an elsewhere comes at a cost since units are taken out of the inventory as construction commences. 

Developers face daunting challenges that include agonizingly long-lead times for regulatory approvals, high interest rates, and in some cases, not-in-my-backyard opposition that naturally comes in a state where developable land is at a premium.

The next challenge comes from cutbacks and possible elimination of federal programs and incentives that have contributed to the modest level of new construction.

The housing crunch is affecting key sectors like healthcare in Sussex County, with Beebe Healthcare advocating for more housing as it works to attract talent.

FRED, a regular report on housing from the Federal Reserve Bank of St. Louis, shows that vacancy rates, while always tight in Delaware, dropped to one-half of one percent in 2024. (See graph above).

In a show of unity that highlights the seriousness of the situation,  the residential real estate industry, home builders, and affordable housing advocates have launched an effort to set convice the General Assembly to set aside 1% of the state budget for housing.

It's a modest goal, but is not a done deal, given employee health care and other costs baked into the state budget.

At the same time, Delaware state, town, and county governments must identify areas suitable for multi-family developments and add a fast-track process that cuts costs for developers.

The housing crisis needs to be a top priority in a legislature prone to worry about issues on the horizon that too often have little effect on daily life. - Doug Rainey, chief content officer.

Note to our  readers

The Delaware Business Now daily newsletter will not be posted on Memorial Day, May 26.