Housing leaders gather in Delaware to confront market challenges and find solutions for the future

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As Delaware faces mounting housing challenges, the state’s top real estate leaders, builders and housing advocates gathered Wednesday to talk about possible solutions at the Delaware Real Estate Summit. Conversations at the event dove into the evolving landscape of Delaware’s residential market — reflecting on the past, addressing present-day challenges and exploring future solutions.

The conversation started with a stark acknowledgement of the housing market crisis in the state, with many pointing to today’s struggles as a direct effect of the Great Recession. After the market blossomed from 2000 to 2006, it faced a significant decline from 2006 to 2008.

As the cost of living rises and inflation affects the nation, Delaware is seeing a shortage of available housing amid an escalating cost of supplies.

“We are seeing housing at all-time price highs. We’re actually not necessarily seeing the amount of housing that’s being delivered at all-time highs,” said Mike Riemann, a civil engineer and also president of Home Builders Association of Delaware. “I’m not sure people are aware about the supply issues. The supply issue has a dramatic effect on the cost of housing.”

While trying to meet the demands of Delawareans and those relocating to the coastal area for retirement, the state is currently facing a shortage of nearly 20,000 housing units suitable for working individuals and moderate to low-income residents. However, as Riemann notes, the situation is not as clear-cut as it may appear. While many builders are eager to expand the amount of available housing, there are challenges that can hinder progress.

“We’re seeing lots of challenges with bringing houses to market, all kinds of challenges from regulatory challenges, legislative challenges, zoning challenges [and] land use issues. It is extremely difficult to bring housing to the market,” he said. “Obviously material cost, work force, all of those things are factors for the building community, but land use and zoning are a major component.”

During his presentation, he proposed some legislative measures to address these issues, including increasing density, expediting the review process and enhancing housing funding.

There was broad agreement on the need to increase the number of housing units in the state, but achieving that long term goal requires a set of shorter term objectives. Rachel Strucker, executive director of the Housing Alliance Delaware, shared her expertise and expressed her support for some of Rieman’s legislative proposals.

“Short term, we can take action to address land use issues, make sure that our local municipalities, counties and at the state level, that folks are educated about what can be done to relieve some of the pressure on the market, [and] make building more quick,” she said. “Make sure more units can be built that can be at the affordable level and something we can do pretty quickly is just infuse more state funding into affordable housing development, which will help bring these projects online more quickly at a lower cost.”

Even those with good-paying jobs often find their hourly wages insufficient. She stated that individuals need to earn $25 an hour to afford a modest one-bedroom apartment. According to her presentation, that’s often challenging for those employed as secretaries, clerks, construction workers and education professionals, all of whom struggle to afford such housing.

As the cost of living rises, many are forced into couch surfing and sharing living space, or facing the risk of homelessness.

“Over the last couple of years, at the same time that we’ve seen rents increase dramatically since 2020, we’re seeing homelessness also increase dramatically,” she added. “Those things are connected. They’re not an accident. They just don’t happen to be happening at the same time. And so that’s what we’re really concerned about.”

Last month, a comprehensive housing assessment got underway to generate recommendations to improve the housing situation.

“One big piece of the solution is our Delaware Housing Task Force,” said Cynthia Karnai, executive director of the Delaware State Housing Authority. That group “is bringing together the experts in the field to come up with recommendations that we can perhaps put into action in the next couple years to make sure that we’re meeting the need.”

Those recommendations are scheduled to be delivered in March 2025.