Delaware City Council members convened for a work session meeting on Monday to hold a discussion on the pressing issue of creating affordable housing in the ever-growing community. The meeting included presentations from Gina Grote, vice president of United Way of Delaware County, representatives of the Delaware Metropolitan Housing Authority, and Vice Mayor Kent Shafer on his proposal to use the Community Reinvestment Act (CRA) to reduce property taxes in order to incentivize developers to provide rental housing at rents affordable to workers earning less than median income.
“This is really a first,” City Manager Tom Homan said at the beginning of the discussion. “For as long as I can remember, this is the first time we’ve had a work session devoted to this topic, which tells you something. The threshold question is should local government play a role in the market? Right now, the (Delaware) Metropolitan Housing Authority plays a role because they administer the Housing Choice Program. There are other ways — our Small Cities Block Grant Program plays a role with providing facade grants and things like that. But the question is should we play a role using this tool to incentivize housing? The first part of doing that is getting the information and data.”
Grote, who also works with the Delaware County Housing Alliance, began the presentations by offering a background of how the alliance was formed and what it is doing to address issues of housing insecurity throughout the county.
“Over the past two to three years, the visibility of individuals experiencing housing insecurity in Delaware County has significantly increased, and it warranted the attention of many county leaders,” Grote told the council. “Discussions were facilitated in the fall of 2019 by the United Way along with the health district and county jail, raising questions as to why that is and what can be done to address these issues.”
As additional leaders, organizations, and citizens rallied around the cause, the housing alliance was formed in July 2021 with the goal of ending “chronic housing insecurity” and increasing the availability of “safe, affordable, quality housing for all,” she said.
The alliance’s first project was to hire a consultant to commission a “robust” study, according to Grote, that would result in short-term, mid-term, and long-term strategies for the county. While Grote said everyone in the county has seen examples of housing insecurity issues, she felt it important to have quantitative data that could be used to support grant requests and bring additional awareness to the community.
The results of the commissioned study were released in February with four specific strategies defined to address the issue. Those strategies include diversifying housing choices to accommodate all life stages and household needs, evaluating land use policies and streamlining project approval processes, expanding housing options for the growing senior population, and ensuring future growth occurs sustainably and equitably so all residents of the county can benefit.
In response to the results of the study, the housing alliance has created five subcommittees, four of which are tasked with addressing one of the four recommended strategies. The fifth committee will focus on community education.
Speaking on some of the data shown in the study specific to the city of Delaware, Grote said the average rent for a one-bedroom apartment in Delaware is $1,000. Of the 25 multi-family complexes in the city, the study showed only seven were built as recently as 2000. Speaking further on the lack of multi-family housing, the study showed the submarket had an overall vacancy rate of just 0.9% as of last August compared to what the study deemed a healthy vacancy rate of around 4%.
Following the presentation from Grote, soon-to-be Delaware Metropolitan Housing Authority Director Lisa Wellhausen discussed her organization’s role in helping families obtain affordable housing in Delaware County. Funded by the federal Department of Housing and Urban Development (HUD), the authority is currently serving around 450 people with nearly 900 people from both the county and other states on a waiting list for the chance to receive a Section 8 voucher.
After hearing the presentations from the organizations, Shafer noted the large scale of the issues facing the county and offered his solution to at least address one of those issues within the city of Delaware.
“No matter what we come up with tonight, we’re not going to solve all of this,” Shafer said. “What I propose is really just targeting one area, which is workforce-attainable housing. How can we use the system that’s been used in Columbus and in other places to try and incentivize developers to rent apartments at less than market rates so we have places for our workers to go. … We hear from businesses all the time how important it is to have workers who live locally, and we talk a lot with Intel coming about how we want to attract more business and commercial development, so this is an important piece, and I think the city does have a role to play.”
Shafer said his proposal is similar to what the City of Columbus has done, which is to use the CRA for tax abatements to foster private sector investors to build mixed-income neighborhoods.
“I’ve spent considerable time talking to (Economic Development Director) Sean (Hughes) about how the CRA works, and we might be able to use that to, basically, what would happen is we would have a 15-year, 100% tax abatement with a 30% pilot payment to the schools,” Shafer said.
According to documents for Shafer’s proposal, “By using Community Reinvestment Acts (CRA) to reduce property taxes, the city can incentivize developers to provide rental housing at rents affordable to workers earning less than median income. This concept is in use in Columbus and other cities and has been successful in increasing the availability of attainable housing. The city would offer to put in place a 15-year, 100% CRA on multi-family housing where the owner would agree to provide a certain number of rental units at reduced rates. The units would be required to be the same in content and quality as other units on the property. The owner would be required to maintain the agreed number of units at the agreed comparable rental rate for a specified period of time.”
Maximum monthly rents would be calculated based on the household income and its accompanying percentage compared to the city’s average median income (AMI) according to HUD’s latest figures for Delaware. Shafer said, typically, between 20-30% of the units in a development would be required to meet the parameters, although he noted the percentage could change based on the needs of the city at the time.
Shafer noted there would need to be some policies put in place by the city to guide the initiative, as well as some legislative changes made to the city’s CRA code. He added, “I think there are developers out there right now that are interested in being a part of this program and providing this kind of housing, so I’m hoping this is something we can work through and get into place sooner rather than later to try and make something happen.”
Councilman Cory Hoffman pushed back against any misconceptions that such a program would be a handout to developers building multi-family housing, saying the program would actually help to level the playing field on a tax basis for the types of housing the city wants to be built in the community.
Building on Hoffman’s comments, Shafer added, “We know what the supply and demand are causing in terms of the market rent rates going up and going up, so I don’t see this as necessarily giving the developers something. But we have to remember that when they build these things, they have to make a profit on it. And if they’re going to rent these apartments for less than the market rate, there has to be some kind of incentive for them to do that. That’s what we’re trying to create, an incentive that will provide the kind of housing that we’re looking for.”
Planning and Community Development Director Dave Efland finished the discussion by discussing how the city’s goals of providing more attainable housing were written into the Delaware Together Comprehensive Plan, which was approved by the council in 2021.
To listen to the council’s full discussion, access the meeting video at www.delawareohio.net/government/city-council-boards-commissions-committees/agendas-motion-summaries.
Reach Dillon Davis at 740-413-0904. Follow him on Twitter @DillonDavis56.