Sussex County, DE
 
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Table of Contents
Table of Contents
[HISTORY: Adopted by the County Council of Sussex County 1-17-2006 by Ord. No. 1821. Amendments noted where applicable.]
GENERAL REFERENCES
Housing standards — See Ch. 71.
Subdivision of land — See Ch. 99.
Zoning — See Ch. 115.

§ 72-1 Title; scope.

This chapter shall be known as the "Moderately Priced Housing Unit Program" (the "MPHU Program" or the "Program") and establishes mechanisms to stimulate the production and sale of housing for residents with moderate incomes.

§ 72-2 Intent.

This chapter seeks to better protect the health, safety and welfare of Sussex County's residents and workforce by stimulating the provision of housing for residents with moderate incomes.

§ 72-3 Governmental findings.

The Sussex County Council hereby finds that a severe shortage exists within the County for housing for residents with moderate incomes. Specifically, the Council finds that:
A. 
The County is experiencing rapid population growth. From 1990 to 2000, the County's population increased by 38.3% from 113,229 persons to 156,638 persons. Most of these new residents are classified as the "young elderly," defined as people entering pre-retirement or early retirement that are financially well off.
B. 
This influx of affluent new households has created significant new demand for public utilities, health and human services, government services and retail and other commercial services, thereby increasing the need for persons of moderate income employed in the stated capacities and for the housing to accommodate those employees.
C. 
In turn, the supply of moderately priced housing has decreased over the past 10 years as housing costs have escalated due to the influx of affluent households. The most recent real estate data suggests that households earning 50% to 125% of the area median income have very few choices for modern, modest quality housing except in the most western areas of the County and, even there, choices and supply are limited.
[Amended 4-23-2013 by Ord. No. 2302]
D. 
Based on the most recent Department of Labor data, a significant portion of the Sussex County workforce earns less than 125% of the area median income.
E. 
Based on this information, Council finds that new development is not adequately addressing the housing needs of the County's moderate-income residents and workforce. Continuation of this trend will have a negative effect upon the ability of local employers to maintain an adequate workforce.
F. 
The inadequate supply of housing for the County's workforce is increasing the commuting distance to employment to include commuting outside the County. This imbalance between jobs and housing has undesirable transportation and environmental consequences. Longer commuting overtaxes existing roads and transportation facilities and significantly contributes to air and noise pollution and traffic congestion. It also produces stress for affected employees and creates greater than normal personnel turnover in the private businesses and public agencies of the County. These circumstances adversely affect the health, safety and welfare of County residents.
G. 
Projections suggest that the high level of demand for higher priced housing will continue, driven by macro-population factors, low County taxes and the proximity of the resort areas in eastern Sussex, discouraging developers from offering a more diverse range of housing in areas where the demand for housing and the workers to support associated residents is strong. The production of moderately priced housing is further deterred by the high cost of materials and labor.
H. 
Housing industry experts advise that if land and development costs can be reduced, modern, quality houses can be built and sold at prices affordable to households of moderate income.
I. 
Given the proper incentives, the private sector possesses the necessary resources and expertise to provide the type of moderately priced housing needed in the County.

§ 72-4 Declaration of public policy.

The Sussex County Council hereby declares it to be public policy of the County to:
A. 
Encourage the creation of a full range of housing choices, conveniently located in suitable living environments, for all incomes, ages and family sizes.
B. 
Encourage the production of moderately priced housing to meet the existing and anticipated future employment needs in the County.
C. 
Assure that moderately priced housing is dispersed throughout the County consistent with the Comprehensive Plan.
D. 
Encourage the production of moderately priced housing by allowing increases in density to reduce land and development costs.
E. 
Encourage developments in town centers, developing areas and environmentally sensitive developing areas with 35 or more total dwelling units to include a minimum number of moderately priced units of varying sizes on public water and sewer systems.
F. 
Provide incentives for private developers to construct moderately priced housing through tools such as the density incentive (defined below).
G. 
Allow developers who are building qualified projects an expedited review period.
[Amended 11-20-2007 by Ord. No. 1941]
H. 
Allow developers who are building qualified projects an expedited review period.

§ 72-5 Definitions.

The following words and phrases have the following meanings:
APPLICANT
Any person, firm, partnership, association, joint venture, corporation, or other entity or combination of entities owning or controlling via contract qualified land (defined below) and any transferee of all or part of the qualified land that, after this chapter takes effect:
A. 
Submits to the County for approval or extension of approval a plan of housing development for any type of site review, subdivision plan or development approval (hereinafter a "development plan") that provides for the development of at least 35 dwelling units on qualifying land in one or more subdivisions, parts of subdivisions, resubdivisions, or stages of development; or
B. 
With respect to land in zones not subject to subdivision approval or site plan review, applies for building permits for the construction of 35 or more dwelling units on qualifying land.
APPROVED RESALE PRICE
The resale MPHU sale price established by the Department pursuant to § 72-11A.
AT ONE LOCATION
All land of the applicant if:
A. 
The property lines are contiguous; and/or
B. 
The property lines are separated only by a public or private right-of-way at any point; and/or
C. 
The property lines are separated only by other land of the applicant not subject to this chapter at the time of the submission of a permit or development plan by the applicant.
CONTROL PERIOD
The time a MPHU is subject to resale price controls and owner occupancy requirements. The control period is 20 years and begins on the date of sale for new or resale MPHUs.
DATE OF SALE
The date of settlement for purchase of a new or resale MPHU.
DENSITY INCENTIVE
Any increase in density pursuant to § 72-7A that allows a residential development to achieve a density greater than would have been possible under the applicable provisions of current and future Zoning Ordinances and the County's Subdivision Regulations.
DEPARTMENT
The Sussex County Department of Community Development and Housing unless a DDE is the applicant or has provided any funding, in which case Department will refer to the DDE.
DEPARTMENT-DESIGNATED ENTITY (DDE)
Any agency, authority or political subdivision of the State of Delaware or any other public housing development agency or nonprofit housing corporation, land trust or similar entity designated by the Department and approved by the County Administrator.
[Amended 11-20-2007 by Ord. No. 1941]
DIRECTOR
The head of the Sussex County Department of Community Development and Housing or head of a DDE, as applicable.
DWELLING UNIT
A building or part of a building that provides a complete living facility for one family, including, at a minimum, facilities for cooking, sanitation and sleeping.
ELIGIBLE BUYER
Person(s) whose household is of moderate income, who has been found eligible to purchase an MPHU and who holds a valid certificate of eligibility from the Department. Eligible buyers of equal moderate income may qualify for different maximum sale prices (defined below) based on the size of the eligible buyer's household.
A. 
For sale of a new MPHU in the open market without deed restrictions pursuant to § 72-10A(7), "excess proceeds" means 95% of the sale price to the open market buyer less the applicant's actual out-of-pocket closing costs as shown on the HUD-1 settlement sheet less the applicable maximum sales price.
B. 
For sale of a resale MPHU in the open market without deed restrictions, "excess proceeds" means the resale price to the open market buyer less the seller's actual out-of-pocket closing costs as shown on the HUD-1 settlement sheet less a market rate third party sales commission (if a broker is used) less the approved resale price.
C. 
For sale of an MPHU as the result of a foreclosure event, "excess proceeds" means the accepted bid at the foreclosure sale less the approved resale price, provided that the accepted bid exceeds the sum of the outstanding principal balance, interest, taxes, insurance, fees provided for in the mortgage and any foreclosure-related expenses, including, but not limited to, expenses of marketing the property due to the first mortgagee and any other costs associated with the foreclosure sale payable to junior lien holders.
D. 
The Seller is obligated to discharge any mortgages or other debt associated with the MPHU out of the maximum sales price or approved resale price.
FORECLOSURE EVENT
A foreclosure, deed-in-lieu of foreclosure or other court-ordered sale.
MAXIMUM SALE PRICE
The new MPHU sale price established by the Department pursuant to § 72-9.
MINIMUM STANDARDS OF ELIGIBILITY
The criteria required to obtain a certificate of eligibility as enumerated in § 72-6 below.
MODERATE INCOME
Those levels of income established by the County Administrator which prohibit or severely limit the financial ability of persons to buy housing in Sussex County. Moderate income is established as 50% to 125% of area median income adjusted for household size as defined by the U.S. Department of Housing and Urban Development (HUD). Income includes salary, wages, dividends, interest and all other sources recognized by HUD from the eligible buyer and all other adults who will occupy the MPHU. Further, for persons or households with significant assets that do not produce income, the Department will establish criteria for imputing income to such assets.
[Amended 11-20-2007 by Ord. No. 1941; 4-23-2013 by Ord. No. 2302]
MODERATELY PRICED HOUSING UNIT (MPHU)
A dwelling unit which is:
[Amended 11-20-2007 by Ord. No. 1941]
A. 
Offered for sale and sold to eligible buyers through or pursuant to regulations promulgated by the Department and approved by the County Administrator; or
B. 
Sold under another government program designated by the County Administrator and designed to assist in the construction or occupancy of moderately priced housing.
PRIORITY MARKETING PERIOD
The period during which an MPHU must be offered for sale exclusively to an eligible buyer as established in § 72-10A(6).
QUALIFYING LAND
All land:
A. 
Owned by or under contract to the applicant; and
B. 
In a Town Center, Developing Area or Environmentally Sensitive Developing Area and zoned for any type of residential development to which a density provision applies or land that is designated on a town’s comprehensive plan as lying within the town’s growth and future annexation area; and that
[Amended 11-20-2007 by Ord. No. 1941]
C. 
Requires the submission of a development plan or, where a development plan is not required, a building permit; and that
D. 
Is served by a public sewer and water system; and that
E. 
Is at one location.

§ 72-6 Minimum standards of eligibility for eligible buyers.

A. 
Eligible buyers must:
(1) 
Be of moderate income as defined in § 72-5 above.
(2) 
As of the date of application to purchase an MPHU, be a permanent resident of Sussex County.
(3) 
For one year immediately preceding the date of application to purchase an MPHU, have been a permanent resident of Sussex County.
(4) 
At of the date of application to purchase an MPHU, have been employed in Sussex County for at least the immediately preceding year and be currently employed in Sussex County as of the date of sale.
(5) 
Maintain the MPHU as their primary residence throughout the period of participation in the MPHU program, except as provided for in § 72-12D.
B. 
Where necessary or advisable to achieve the objectives of this chapter or to comply with state or federal housing laws, the Department may propose changes to these standards for approval by the County Administrator, including changes to eligibility requirements for home buyer applicants as recommended by the Department.
[Amended 11-20-2007 by Ord. No. 1941]

§ 72-7 Density incentive; other incentives.

A. 
Density incentives.
(1) 
Subject to meeting the requirements outlined in §§ 72-8, 72-9 and 72-10 of this chapter, a proposed development on qualifying land at one location may achieve the following density incentives:
Tier A
Tier B
Tier C
MPHUs required
15%
15%
15%
Density incentive
20%
25%
30%
Tier A: greater than 100% and less than or equal to 125% of the area median income as established by the U.S. Department of Housing and Urban Development, adjusted for family size and updated annually.
Tier B: greater than 80% and less than or equal to 100% of the area median income as established by the U.S. Department of Housing and Urban Development, adjusted for family size and updated annually.
Tier C: less than or equal to 80% of the area median income as established by the U.S. Department of Housing and Urban Development, adjusted for family size, and updated annually.
(2) 
For applicants proposing a mix of tiers, the density incentive will be the weighted average reflecting the number of units in each tier. For example, if a project has 1/3 each of Tier A, Tier B and Tier C MPHUs, the weighted average density incentive will be 25%. If a project has 90% Tier A and 10% Tier C, the weighted average density incentive will be 21%.
(3) 
In planned development zones and mixed use zones containing flexible development standards, the number of MPHUs will be 15% of the total number of dwelling units.
(4) 
In either single-family detached or townhouse subdivisions, each MPHU must have at least two bedrooms. One-bedroom MPHUs are permitted in condominiums, provided that the number of one-bedroom condominium MPHUs is equal to or less than the number of market rate one-bedroom units in the subdivision.
B. 
Other incentives will include:
(1) 
Expedited review. A project entering the MPHU program through execution of an MPHU agreement will receive expedited review. The expedited review is provided to the applicant to assist the applicant in managing, to the extent possible, the risk of changes to cost, interest rates, schedule and other factors that the applicant is taking on by virtue of participation in the MPHU program. If the applicant, at any time during processing, elects to withdraw from the MPHU program, any approvals granted for the development through the date of withdrawal will be vacated and the applicant will have to resubmit the project in the normal County process.
(2) 
The project entering the MPHU Program with the execution of an MPHU agreement will be allowed to utilize the density permitted by the zoning district in which the property is located, provided that the total density, including MPHU incentives, shall not exceed 12 units per acre.
[Added 11-20-2007 by Ord. No. 1941[1]]
[1]
Editor's Note: This ordinance also repealed former Subsection B(2), Fee waivers.
C. 
The Council is authorized to modify the provisions of the County's Zoning Ordinance and the County's planning and zoning regulations and processes as needed to achieve the density incentives and the specific design elements (e.g., minimum lot sizes, setbacks, building heights, parking requirements, etc.) of approved MPHU projects.

§ 72-8 MPHU agreements.

To participate in the MPHU program and to secure a density incentive, an applicant must execute an MPHU agreement negotiated with the Department and the County Attorney. Each agreement must include, at a minimum, the following information and/or evidence the following agreements and any others deemed necessary by the Department and the County Attorney to properly implement the chapter.
A. 
The specific number of MPHUs to be constructed in each price level meeting the maximum sale prices established by the Department. An amendment to the MPHU agreement will be made to incorporate approved development plans once the plans are available.
B. 
The schedule pursuant to which the MPHUs will be constructed, marketed and delivered and the relationship between the delivery of market rate units and the delivery of MPHUs (i.e., a stated number of MPHUs to be created for each nonMPHU created).
C. 
Any economic risk created by changes, whether within or outside of the applicant's control, in development and construction costs, interest rates, processing and construction schedules, permitting and any other factor impacting the applicant's economics are borne solely by the applicant.
D. 
The County Administrator may withhold building permits until the applicant is, in the sole discretion of the Department, in full compliance with the MPHU agreement.
[Amended 11-20-2007 by Ord. No. 1941]
E. 
Be signed by the applicant, by other parties having an interest in the property and by all other parties whose signatures are required by law for the effective and binding execution of contracts conveying real property. MPHU agreements must be executed in a manner that will enable them to be recorded in the land records of the County. If the applicant is a corporation, the principal officers of the corporation must sign the agreements individually and on behalf of the corporation.
F. 
Partnerships, associations and corporations may not evade the requirements of the MPHU agreement through voluntary dissolution.
G. 
The MPHU agreement may only be assigned with the written approval of the Department and only if the proposed assignee agrees to fulfill and demonstrates the financial ability to fulfill the applicant's obligations under the MPHU agreement.
H. 
Applicants are responsible for marketing and selling the MPHUs. During priority marketing periods, the applicant will work with the Department to screen eligible buyers and to receive any specific selection criteria or directions promulgated by the Department.
I. 
If the applicant is not also the builder, disclosure of the relationship between the applicant and builder as soon as the relationship is established. Further, acknowledgement by the applicant and builder that any deed transferring lots to builder will be encumbered by covenants described in § 72-8K below.
J. 
MPHU units must be fully integrated into the communities of which they are a part and shall not be substantially different in appearance from non-MPHU units. When the MPHU units are a part of a phased development, a proportionate number or percentage of said units shall be placed within each phase and/or constructed within each housing type appearing in the development. The planning and design of individual MPHUs must be consistent with the planning and design of market rate units within a single project.
[Amended 11-20-2007 by Ord. No. 1941]
K. 
The applicant will execute and record covenants confirming that:
(1) 
The restrictions of this chapter run with the land; and
(2) 
The covenants will bind the applicant, any assignee, mortgagee, or buyer and all other parties that receive title to the property, with the exception of the first lien mortgage holder, and except for a second mortgage which is approved by the first mortgage lender and the Department prior to the date of sale and the proceeds of which are used solely to pay or reimburse some or all of an eligible buyer's down payment and/or settlement costs. In the event the first lien mortgagee acquires the property through a foreclosure or acceptance of deed-in-lieu of foreclosure, the resale restrictions will be extinguished. The covenants must be senior to all instruments securing financing with the exception of the first lien mortgagee and an approved second lien mortgage to defray some or all of the down payment and/or settlement costs, as defined above.
[Amended 11-20-2007 by Ord. No. 1941]
(3) 
In any later deed or instrument conveying title to an MPHU, the property remains subject to the restrictions contained in the covenants required under the chapter during the control period until the restrictions are released. The source of the deed restrictions must be included in the public land records so that they are readily identifiable in a routine search.
L. 
Where the applicant is a DDE, covenants will be negotiated between the Department and the DDE so as to be consistent with the mission, strategies, business plans and operating procedures of the DDE and may, with Council approval, deviate from the requirements of this chapter.

§ 72-9 Maximum sale prices of new MPHUs.

A. 
The Department will establish the maximum sale price for each tier of moderate income and for each household size within each tier. The maximum sale price applies to new MPHUs. The maximum sale price for any level of moderate income and household size is established by:
(1) 
Calculating the maximum conventional, thirty-year amortizing first mortgage supportable by the Council-approved moderate income levels based on prevailing interest rates, amortization schedules and allowable debt burdens provided by mortgage lenders approved by the Department to make loans to eligible buyers; then
(2) 
Deducting from the calculated maximum first mortgage the good-faith estimate of a typical eligible buyer's out-of-pocket closing costs as shown on a HUD-1 settlement sheet to purchase the MPHU; and finally
(3) 
Multiplying the result by 0.95, or such other factor promulgated by the Department and approved by the County Administrator from time to time, to provide a minimum financial cushion for eligible buyers for routine maintenance, emergencies and other unplanned financial circumstances.
[Amended 11-20-2007 by Ord. No. 1941]
B. 
The Department will establish new maximum sale prices whenever there are, in the Department's sole opinion, material changes in moderate income as defined and/or in market terms for interest rates, amortization schedules and debt burdens.
C. 
Maximum sale prices are solely income and mortgage-related and are not tied to the applicant's actual cost of producing and selling MPHUs, or, in the case of resales, sale price expectations based on the Sussex County real estate market. Applicants must carefully consider the risks associated with fluctuations in both maximum sale prices and in the cost of producing MPHUs prior to participating in the MPHU program. Once an applicant enters the program, all such risks are borne solely by the applicant, and the applicant will have no cause to seek relief from the Department or the County.

§ 72-10 Initial sale of new MPHUs.

A. 
Sale to eligible buyers.
(1) 
Every MPHU constructed under this program must be offered to all eligible buyers for purchase as the eligible buyer's principal residence. Notification of MPHU availability will be made through legal notices in area publications meeting public notice criteria. At the time the Department accepts an application from an eligible buyer, it will secure written confirmation from such person that eligible buyers are solely responsible for monitoring legal notices for the availability of MPHUs and for information on the MPHU program.
(2) 
Before formally offering any MPHUs, the applicant must notify the Department of the date on which the applicant will be ready to begin the marketing to eligible buyers. The notice must set forth, for each MPHU, its address, floor area, room mix, delivery date, estimated homeowners' association charges (if any), estimated annual property taxes and estimated annual utility expenses for sewer, water, electric and, if available, gas. The notice will also include floor plans and elevations for each MPHU or model of MPHU.
(3) 
After receiving the offering notice, the Department must notify the County Administrator of the offering. If the Department finds that the offering notice is complete, it will provide the applicant with the maximum sale price for each unit and authorize the applicant to offer the MPHUs to eligible buyers during the priority marketing period pursuant to rules established by the Department.
[Amended 11-20-2007 by Ord. No. 1941]
(4) 
The Department will, with approval of the County Administrator, establish a selection system that considers household size, length of County residency, length of employment in the County and length of time since the person was certified for the MPHU program. The Department will coordinate with the applicant in the selection of specific eligible buyers identified by the applicant during the applicant's marketing. If there are multiple, equally qualified eligible buyers seeking to buy the same MPHU, the purchaser will be selected by a lottery run by the Department.
[Amended 11-20-2007 by Ord. No. 1941]
(5) 
The Department, with the approval of the County Administrator, may establish special selection criteria or MPHU allocations to address certain specific housing needs, such as target workforce sectors or economic development initiatives.
[Amended 11-20-2007 by Ord. No. 1941]
(6) 
The priority marketing period for new MPHUs begins on the earlier to occur of when the Department declares the offering notice complete, or 15 days after submission of the offering notice to the Department and ends 180 days thereafter.
(7) 
Any units available after expiration of the priority marketing period will, upon written approval from the Department, be released to the applicant for sale as market rate units without deed restrictions pursuant to the MPHU agreement and subject to the Department's rights pursuant to the next Subsection B.
B. 
Sale to the Department. If no eligible buyer is found for an MPHU during the applicable priority marketing period, the Department may:
(1) 
Buy the MPHU, or allow a DDE to buy the MPHU, for the purpose of reselling it to an eligible buyer at a later date, or
(2) 
Authorize the applicant to sell the MPHU in the open market without deed restrictions and to deliver any excess proceeds to the Department.

§ 72-11 Resale of MPHUs.

A. 
Except for foreclosure proceedings (§ 72-13), MPHUs produced under the MPHU program may only be resold during the control period at the following prices (the approved resale price):
(1) 
If the current maximum sale price for an MPHU in the same tier as the MPHU to be sold is equal to or less than the prior price paid for the MPHU, including closing costs, then the approved resale price is the prior price paid including closing costs.
(2) 
If the current maximum sale price for an MPHU in the same tier as the MPHU to be sold is greater than the prior price paid for the MPHU, including closing costs, then the approved resale price is the original purchase price, including closing costs, plus 3% annual escalation from date of purchase to date of sale, but in no event more than the current maximum sale price.
B. 
Resale requirements during the control period.
(1) 
Any MPHU offered for resale during the control period must first be offered to the Department at the approved resale price. The Department will have 60 days to exercise this option and, if exercised, closing will take place 60 days thereafter. The Department may buy an MPHU when funds are available and the Department finds that buying and reselling the MPHU will increase opportunities for eligible buyers to buy the MPHU.
(2) 
If the Department does not buy the MPHU, the Department will notify the seller of that fact and the approved resale price and a ninety-day priority marketing period will commence. During that period, the seller will market the MPHU to eligible buyers as described for new MPHUs in § 72-10A.
(3) 
If no eligible buyer is identified, a resale MPHU may be offered for sale as a market rate unit without deed restrictions and free of any approved resale price limitation after expiration of the priority marketing period. Any excess proceeds from such a sale will be distributed to the Department.
(4) 
The seller will submit to the Department for approval at least 30 days prior to closing:
(a) 
A copy of the proposed sales contract, including a list and the price of any personal property included in the sale, which contract will be contingent on Department approval.
(b) 
Draft of the settlement sheet.
(c) 
An affidavit signed by the seller and buyer attesting to the accuracy of all documents and conditions of the sale.
(5) 
A signed copy of the settlement sheet is to be provided to the Department immediately upon execution via facsimile from the settlement agent's office.
(6) 
A transfer of an MPHU that does not comply with this chapter and the Department will not release deed restrictions or provide any consents or estoppels until all required documents and affidavits have been submitted to and approved by the Department.
(7) 
If the unit is resold during the control period, then a new control period begins.
C. 
There are no sale restrictions after expiration of any control period.

§ 72-12 Restrictions on MPHU owners.

A. 
Every owner of an MPHU must occupy the MPHU as the owner's principal residence during the control period. Each owner must certify before taking occupancy that the owner will occupy the MPHU as the owner's principal residence during the control period. The Director will require an owner who does not occupy the MPHU as the eligible buyer's principal residence to offer the MPHU for resale to another eligible buyer under the resale provisions of § 72-11. Annual certification of principal residency from each owner will be required.
B. 
Except as provided in § 72-12C following, during the initial control period after the date of original sale, and, if the MPHU is resold, the subsequent new control period, no liens other than the first mortgage will be permitted on an MPHU other than statutory liens for unpaid real estate taxes or assessments for infrastructure improvements and any liens validly recorded for unpaid homeowner's association fees.
C. 
If an eligible buyer has owned an MPHU for five years or more, the eligible buyer may request permission from the Department to place a second mortgage on the MPHU to provide for necessary capital improvements or for other purposes permitted by rules to be promulgated by the Department. The Department may approve the request if:
(1) 
The eligible buyer provides evidence that it has an approved lender ready to make the requested loan; and
(2) 
The eligible buyer provides evidence of approval from the first mortgagee that the mortgagee approves the subordinate financing; and
(3) 
The Department determines that the total of the first and second mortgages does not exceed 90% of the then prevailing maximum sale price for an equivalent MPHU.
D. 
An owner of an MPHU, except the Department, may only rent the MPHU to any another party in certain limited and extraordinary circumstances approved by the Department (e.g., death of an owner).
(1) 
The Department may allow rental of the MPHU for a period not to exceed 12 months at rents set by the Department. Any approved rental will automatically amend the applicable MPHU covenants to extend the control period for a time equal to the approved rental period.
(2) 
Any unapproved rental is a violation of this chapter and will result in a fine payable to Sussex County equal to the full amount of any illegal rental received plus $500 per each month of illegal rental. Any amount unpaid after 90 days is grounds for a lien against the MPHU, and Sussex County may obtain a judgment and record the lien. If an illegal rental continues for more than six months, Sussex County may sue to force a sale pursuant to the provisions of this chapter.
E. 
An owner may only sell an MPHU after first notifying the Department of the proposed sale and obtaining a current certificate of eligibility issued by the Department from the proposed buyer.
F. 
A person may own only one MPHU at any given time. If an MPHU owner is buying a different MPHU pursuant to this chapter, the Department, in its sole discretion, may authorize an overlapping ownership period of up to 60 days.
G. 
If an MPHU owner dies, at least one heir, legatee, or other person taking title by will or by operation of law must be an eligible buyer and must occupy the MPHU as his or her principal residence during the control period. If these conditions cannot be met, the new owner(s) must sell the MPHU to an eligible buyer pursuant to § 72-11 of this chapter.

§ 72-13 Defaults and foreclosures.

A. 
MPHU mortgages will include the following provisions.
(1) 
The Department will request that approved lenders providing mortgages to eligible buyers provide a copy of any mortgage default notification to the Department no earlier than the 45th day following delinquency and no later than the 60th day following delinquency. The Department will require that all approved lenders have the eligible buyer sign an authorization form permitting the loan servicer to give such notice to the Department.
(2) 
The MPHU owner must provide a copy of any mortgage default notification immediately upon receipt.
(3) 
In such event, the Director shall make every effort to work with the owner to reconcile the delinquency/default, including a deed in lieu of foreclosure, referral to an agency skilled in mortgage default counseling, sale to another eligible buyer or Department-designated entity (if no eligible buyers are interested in the MPHU). The Department will have 60 days from date of notification to assist the homeowner in curing the default.
(4) 
If the Director determines that the waiting list of eligible buyers warrants retaining the MPHU in inventory and if funding is available, the Director is authorized to notify the mortgagee that the Department or DDE guarantees payoff of the outstanding principal balance, interest, taxes, insurance, fees provided for in the mortgage and any foreclosure-related expenses, including, but not limited to, expenses of marketing the property within 60 days in return for cancellation of foreclosure actions. Prior to making such notification, the Department will secure the MPHU owner's consent to sell the property and will coordinate with the mortgagee or its servicing agent. Should the MPHU owner not consent to a sale and should the default not be cured, the foreclosure could proceed. The Department reserves the right to purchase the MPHU at the foreclosure sale, thereby ensuring a renewed control period. The Department will take into consideration the possible legal costs associated with eviction in determining whether or not to bid at the foreclosure sale. If the mortgagee is the successful bidder at the foreclosure sale, the Department will have the option to pursue purchase of the property from the lender within 30 days of the foreclosure sale. The Department assumes recourse for any necessary eviction proceedings. In the event the Department purchases the MPHU, the Department will pay the principal, interest and other costs outlined above to the mortgagee up to, but not exceeding, current market value (without deed restrictions) as determined by mortgagee's appraiser. Title to the MPHU property will then pass to the Department. The Department will thereupon re-offer the property in accordance with the MPHU program to eligible buyers, with the requirement that the Department is, to the extent possible, made whole for monies spent in the process of obtaining the property in the MPHU program.
B. 
MPHU mortgages and covenants will provide that, if an MPHU is sold through a foreclosure event, a payment must be made to the Department as follows:
(1) 
If a foreclosure event occurs during the control period and if the accepted bid at the foreclosure sale exceeds the approved resale price, excess proceeds will be paid to the Department in lieu of the former MPHU owner. The Department is responsible for monitoring foreclosure events and ensuring recapture of any excess funds.
(2) 
If the accepted bid at the foreclosure sale is less than the approved sale price, no payment is due to the Department.
(3) 
If the foreclosure event occurs after the twenty-year control period, then no payment is necessary to the Department.

§ 72-14 Phased implementation of provisions; test period.

A. 
To assist the Council in assuring that the program achieves the objectives outlined in the chapter, the Council will establish a test period during which the Council, supported by the Departments of Community Development and Housing and Planning and Zoning, will test the effectiveness of the chapter and its associated rules and regulations. The test period will be long enough for the initial MPHU projects to be processed, developed and sold to eligible buyers, which period shall be 24 months. Improvements to concepts, processes and rules and regulations identified during the test period will be incorporated into future amendments of the chapter. The Council views this chapter as a living document that will be modified as needed to respond to economic, housing, development, land use and other trends in the County and to best practices in MPHU programs. The chapter will not be fully implemented until the test period is completed and the chapter hereafter amended to include any additional provisions the Council determines are needed prior to the expiration of the test period.
B. 
The section further establishes a request for proposal ("RFP") process to select program participants during the test period. The RFP process will:
(1) 
Allow the County to manage the number of potential development projects participating in the program until program guidelines related to administration, land use, zoning and public processing are tested and finalized.
(2) 
Allow the County to manage the number of potential MPHUs created until the actual market for MPHUs is better understood and quantified and until program guidelines related to marketing, sale, financing, resale and ownership are tested and finalized.
(3) 
Allow applicants to present alternative approaches to lot sizes, housing types, density incentives and other program features to encourage better overall land use, creation of MPHUs in high land-cost areas or similar potentially desirable outcomes. Alternative approaches deemed successful by the Council will be incorporated in the amendment to the chapter prior to full implementation.
(4) 
Ensure that the letter of the chapter produces results that are consistent with the spirit of the chapter by allowing the Council to amend the chapter as needed based on actual experience prior to final promulgation and full adoption.
C. 
During the phased implementation period, the Council directs the Director, Planning and Zoning to exploring existing zoning classifications, to consider new zoning classifications and to consider overlay designations that can be modified or created to encourage the creation of MPHUs, particularly in the coastal area of the County. The findings of this study will be used by the Council in considering changes to the County's Comprehensive Plan during its next scheduled update.
D. 
The County Administrator, in cooperation with the County Attorney, shall develop and approve a standard set of agreements and documents to implement all of the requirements of this chapter, and all applicants and eligible buyers shall be required to execute those documents as a condition of participating in the MPHU Program.
[Added 11-20-2007 by Ord. No. 1941]

§ 72-15 Government regulations; enforcement.

A. 
The Department must maintain a list of all MPHUs constructed and sold under this program, and Council hereby authorizes the County Administrator to promulgate and adopt regulations and approve the various agreements and documents necessary to administer this program.
[Amended 11-20-2007 by Ord. No. 1941]
B. 
The Director may, with Council approval, waive or modify the provisions of the MPHU program if the Director finds that the program is in conflict with state or federal housing laws.
C. 
This program applies to all agents, successors, and assigns of an applicant. A building permit must not be issued, and a preliminary plan of subdivision, development plan, or site plan must not be approved unless it meets the requirements of this program. The Director of Planning and Zoning may deny, suspend, or revoke any building or occupancy permit upon finding a violation of this program. Any prior approval of a preliminary plan of subdivision, development plan or site plan may be suspended or revoked upon the failure to meet any requirement of this chapter. An occupancy permit must not be issued for any building to any applicant, or a successor, or assign of any applicant, for any construction that does not comply with this program.
D. 
The Director is authorized to pursue any available remedy, legal, or equitable in nature, to enforce the requirements of this program or to prevent or abate a violation of this program.
E. 
The Director may take legal action to stop or cancel any transfer of an MPHU if any party to the transfer does not comply with all requirements of this program. The Director may recover any funds improperly obtained from any sale or rental of an MPHU in violation of this chapter.
F. 
In addition to or instead of any other available remedy, the Director may take legal action to:
(1) 
Enjoin an MPHU owner who violated this program, or any covenant signed or order issued under this program, from continuing the violation; or
(2) 
Require an owner to sell an MPHU owned or occupied in violation of this Program to an eligible buyer.
G. 
The Director may take action if the MPHU are illegally rented or lease.
[Added 12-9-2008 by Ord. No. 2016]

§ 72-16 Intent.

[Amended 11-1-2016 by Ord. No. 2474]
This chapter seeks to better protect the health, safety and welfare of Sussex County's residents and workforce by stimulating the provision of affordable rental housing for residents with low and moderate incomes and is hereafter known as the "Sussex County Rental Program" or "SCRP" or "program."

§ 72-17 Governmental findings.

[Amended 11-1-2016 by Ord. No. 2474]
The Sussex County Council hereby finds that a shortage exists within the County for housing for residents with low and moderate incomes. Specifically, the Council finds that:
A. 
It is well known that Sussex County rents have inflated far beyond the ability of an average wage earner to pay. It is also known that federal rental assistance programs, such as the state-administered Public Housing and Section 8 Housing Choice Voucher Programs, are unable to completely satisfy the need for affordable rental housing.
B. 
Council finds that new development is not adequately addressing the rental housing needs of the County's low- and moderate-income residents and workforce. Without influencing this trend, local employers will have a difficult time maintaining an ample workforce.
C. 
Without an adequate supply of affordable rental housing in close proximity to employment and Town Centers, the County's workforce must commute a great distance for work. Not only do long commutes have a negative effect on the environment and transportation, but commuting also comes with high fuel expenses.
D. 
Given the proper incentives, the private sector possesses the necessary resources and expertise to provide the type of affordable rental housing needed in Sussex County.

§ 72-18 Declaration of public policy.

[Amended 11-1-2016 by Ord. No. 2474]
The Sussex County Council hereby declares it to be the public policy of the County to:
A. 
Encourage the creation of a full range of housing choices, conveniently located in suitable living environments, for all incomes, ages and family sizes.
B. 
Encourage the production of affordable rental units to meet the existing and anticipated future employment needs in the County.
C. 
Assure that affordable rental units are dispersed throughout the County consistent with the Comprehensive Plan.
D. 
Encourage developments in Growth Areas as defined within the County's most current comprehensive plan and Areas of Opportunity as defined by the Delaware State Housing Authority to include a minimum percentage of affordable rental units on public water and sewer systems.
E. 
Provide incentives for developers to construct affordable rental units through tools such as the density incentive and expedited review (defined below).

§ 72-19 Definitions.

The following words and phrases have the following meanings:
APPLICANT
Any person, firm, partnership, association, joint venture, corporation, or other entity or combination of entities owning or controlling via contract qualifying land (defined below) and any transferee or successor in interest of all or part of the qualifying land pursuing the development of affordable rental housing under the SCRP that:
[Amended 11-1-2016 by Ord. No. 2474]
A. 
Submits to the County for approval or extension of approval a plan of housing development for any type of site plan review, subdivision plan or development approval (hereinafter, a "site plan") that provides for the development of affordable rental units on qualifying land in one or more subdivisions, parts of subdivisions, resubdivisions, or phases of development under the terms and conditions as set forth in this article.
B. 
With respect to land in zones not subject to subdivision approval or site plan review, applies for building permits for the construction of affordable rental units on qualifying land under the terms and conditions as set forth in this article.
AREA MEDIAN INCOME
The midpoint family income for Sussex County, calculated each year by the U.S. Department of Housing and Urban Development (HUD), adjusted for household size.
[Amended 11-1-2016 by Ord. No. 2474]
AT ONE LOCATION
All land of the applicant if:
[Amended 11-1-2016 by Ord. No. 2474]
A. 
The property lines are contiguous; or
B. 
The property lines are separated only by a public or private right-of-way at any point; or
C. 
The property lines are separated only by other land of the applicant and not subject to this section at the time of the submission of an application or development plan by the applicant.
CERTIFICATE OF ELIGIBILITY
A certificate valid for a period of time, which is issued to eligible tenants by the landlord (defined below) and supplied to the Department (defined below) as further set forth within this article. This certificate must be issued before a tenant will be permitted to sign a lease agreement.
[Amended 11-1-2016 by Ord. No. 2474]
CONTROL PERIOD
The time a SCRP unit is subject to rental controls and occupancy requirements. The control period is 30 years and begins on the date of lease (defined below).
DATE OF LEASE
The date of the initial lease agreement signing of an approved eligible tenant for a SCRP unit.
DENSITY INCENTIVE
Any increase in density pursuant to § 72-21 that allows a residential development to achieve a density greater than would have been possible under the applicable provisions of current and future zoning ordinances and the County subdivision regulations then in effect.
DEPARTMENT
The Sussex County Department of Community Development and Housing or its successors.
DEPARTMENT-DESIGNATED ENTITY (DDE)
Any agency, authority or political subdivision of the State of Delaware or any other public housing development agency or nonprofit housing corporation, land trust or similar entity designated by the Department and approved by the County Administrator.
DIRECTOR
The head of the Department of Community Development and Housing or head of a DDE, as applicable.
DWELLING
Any building, structure, or portion thereof which is occupied as, or designed or intended for occupancy as, a residence; and any vacant land which is offered for sale or lease for the construction or location thereon of any such building, structure, or portion thereof. "Dwelling" shall not include hotels, motels, motor lodges, boarding and lodging houses, tourist houses, or similar structures.
[Amended 11-1-2016 by Ord. No. 2474]
ELIGIBLE INCOME
The levels of income designated by the County Administrator which prohibit or severely limit the financial ability of persons to rent a dwelling unit in Sussex County. Eligible income is low- to moderate-income, defined as 30% to 80% of the area median income for Sussex County adjusted for household size as defined by the U.S. Department of Housing and Urban Development (HUD). Income includes gross salary, wages, dividends, interest and all other sources recognized by HUD from the eligible tenant and all other adults (age 18 and older) who will occupy the SCRP unit. Income will be verified by a copy of the filed income tax returns from the previous year and any other personal and financial information requested by the landlord in order to accurately verify the potential tenant's qualifications and income, which may include, but is not limited to, a credit history report and a criminal background report on the proposed adult tenants, so long as these are requirements for all leases in the housing development.
[Amended 11-1-2016 by Ord. No. 2474]
ELIGIBLE TENANT
Person(s):
A. 
Whose household is of low or moderate income;
B. 
Who has been found eligible to participate in the Sussex County Rental Program; and
C. 
Who holds a valid certificate of eligibility from the landlord.
[Amended 11-1-2016 by Ord. No. 2474]
EXPEDITED REVIEW
A project entering the SCRP will receive priority in the County's planning and zoning process, with the Director of Planning and Zoning and the County Administrator to determine the applicant's placement in the list of pending applications. The expedited review is provided to the applicant to assist the applicant in managing, to the extent possible, the risk of changes to cost, interest rates, schedule and other factors that the applicant is taking on by virtue of participation in the SCRP. If an applicant at any time during processing elects to withdraw from the SCRP, any approvals granted for the development through the date of withdrawal will be vacated and the applicant will have to resubmit the project through the normal County process. A project receiving expedited review does not exempt the project from the County's planning and zoning process, nor guarantee approval through that process.
[Amended 11-1-2016 by Ord. No. 2474]
FORECLOSURE EVENT
A foreclosure, deed-in-lieu of foreclosure or other court-ordered sale of the rental unit or of the subdivision or development in which the unit is located, subject to rental restrictions continuing in force after foreclosure sale of disposition.
LANDLORD
The owner of the property that contains SCRP units or an entity designated by the owner to manage and lease dwelling units.[1]
QUALIFYING LAND
All land that:
A. 
Is owned by or under contract to the applicant; and
B. 
Is located within a Growth Area as defined within the County's most current comprehensive plan or within an Area of Opportunity as defined by the Delaware State Housing Authority; and
[Amended 11-1-2016 by Ord. No. 2474]
C. 
Requires the submission and approval of a site plan or, where a site plan is not required, one or more building permits; and
D. 
Is served by a public water and sewer system; and
E. 
Is at one location as defined above.
SUSSEX COUNTY RENTAL PROGRAM UNIT (SCRP UNIT)
A dwelling which is:
[Amended 11-1-2016 by Ord. No. 2474]
A. 
Offered for lease to eligible tenants through or pursuant to the provisions of this article and any regulations promulgated thereunder by the Department and approved by the County Administrator; or
B. 
Leased under another government program designated by the County Administrator designed to assist in the construction or occupancy of affordable rental housing.
[1]
Editor’s Note: The former definition of “minimum standards of eligibility,” which immediately followed, was repealed 11-1-2016 by Ord. No. 2474.

§ 72-20 Minimum standards of eligibility for tenants.

[Amended 11-1-2016 by Ord. No. 2474]
A. 
Eligible tenants must:
(1) 
Have proof of citizenship.
(2) 
Be of eligible income, as defined in § 72-19 above, and be able to pay the first month's rent and any required security deposit.
(3) 
Be employed and live in Sussex County for at least one year preceding application to the SCRP. Sussex County employers may seek waivers to this restriction from the Director and County Administrator. Waivers are evaluated on a case-by-case basis and are not guaranteed.
(4) 
Provide proof that adult tenants have not been convicted of a felony and have a satisfactory credit and criminal history, so long as these are requirements of all leases within the proposed housing development.
(5) 
Occupy the SCRP unit as the tenant's principal residence during the lease period. Each eligible tenant must certify before taking occupancy that the tenant will occupy the SCRP unit as the tenant's principal residence. Any tenant who violates occupancy requirements will be subject to eviction procedures.
B. 
Where necessary or advisable to achieve the objectives of this chapter or to comply with state or federal housing laws, the Department may propose changes to these standards for approval by the County, including changes to eligibility requirements for tenants as recommended by the Department.
[Amended 11-1-2016 by Ord. No. 2474]

§ 72-21 Density and expedited review incentives.

A. 
Density incentive. Subject to meeting the requirements outlined in § 72-22, a proposed development on qualifying land at one location may receive a density bonus of 20%. The project entering the SCRP with the execution of a SCRP agreement will be allowed to utilize the density permitted by the zoning district in which the property is located, provided that the total density, including any SCRP density bonus, shall not exceed 12 units per acre.
B. 
Expedited review. A project entering the SCRP through execution of an SCRP agreement will receive expedited review, as defined in § 72-19 above, through the County's Planning and Zoning process.
C. 
Incentives will only be granted to projects submitted for new development that meet all requirements of this program.
D. 
To the extent necessary, Council shall amend the provisions of the County's Zoning Ordinances as needed to achieve the density incentives and the specific design elements (e.g., minimum lot sizes, setbacks, building heights, parking requirements, etc.) of approved SCRP projects.

§ 72-22 Minimum standards of eligibility for SCRP developments.

A. 
Applicants must contribute 12.5% of all units to SCRP inventory. In applying and calculating the number of affordable units within a proposed development, any decimal fraction less than or equal to 0.50 may be disregarded, and any decimal fraction greater than 0.50 shall be constructed as one unit. In the case where the total number of units being constructed is four or less, the minimum number of SCRP units must be one unit.
[Amended 11-1-2016 by Ord. No. 2474]
B. 
All parcels in the proposed project must be on qualifying land, as defined in § 72-19.
C. 
All units contributed as SCRP units will remain at the affordable rental rates specified herein for the remainder of the control period. SCRP units shall never be leased as market-rate units during the control period, regardless of vacancy, except in accordance with § 72-23N(1).
[Amended 11-1-2016 by Ord. No. 2474]
D. 
SCRP units must be fully integrated into the communities of which they are a part and shall not be substantially different in external appearance from market-rate units. SCRP units shall be equipped with the same basic appliances as the market rate units, such as an oven, refrigerator, dishwasher, and washer and dryer.
[Amended 11-1-2016 by Ord. No. 2474]

§ 72-23 SCRP agreements.

To participate in the SCRP and secure any incentives provided for herein, an applicant must execute an SCRP agreement prepared by the Department and the County Attorney. Each agreement must include, at a minimum, the following information and/or evidence the following agreements and any others deemed necessary by the Department and the County Attorney to properly implement the chapter:
A. 
The specific number of SCRP units to be constructed in the project. If a final site plan has not been approved when the SCRP agreement is executed, an amendment to the SCRP agreement will be made to incorporate the approved final site plan.
B. 
The schedule pursuant to which the SCRP units will be constructed, marketed, and delivered and explaining the relationship between the delivery of market-rate units and the delivery of SCRP units (i.e., a stated number of SCRP units to be created for each market-rate unit created).
(1) 
Applicants should affirmatively market the SCRP units to diverse populations, and meet with the surrounding residents early in the development approval process.
[Added 11-1-2016 by Ord. No. 2474]
C. 
Any economic risk created by changes, whether within or outside of the applicant's control, in development and construction costs, interest rates, processing and construction schedules, permitting and any other factor impacting the applicant's costs and development obligations are borne solely by the applicant.
D. 
Building permits, performance bonds and letters of credit.
(1) 
No building permits shall be issued in any subdivision or housing development where SCRP units are included until the applicant executes a valid SCRP agreement which applies to the entire subdivision.
(2) 
If an applicant does not build the SCRP units in accordance with the construction schedule along with or before other dwelling units the County Administrator may withhold building permits or call in performance bond or letter of credit from the applicant until the SCRP units contained in the construction schedule are built and contributed to SCRP rental inventory to the satisfaction of the Department.
[Amended 11-1-2016 by Ord. No. 2474]
E. 
Be signed by the applicant and all other parties having an interest in the property whose signatures are required for the effective and binding execution of contracts conveying real property. SCRP agreements must be executed in a manner that will enable them to be recorded in the land records of the County. If the applicant is a corporation or limited liability company, the principal officers of the entity must sign the agreements individually and on behalf of the corporation pursuant to a duly adopted resolution.
F. 
Partnerships, associations, corporations and other entities may not evade the requirements of the SCRP agreement through voluntary dissolution, bankruptcy, or the sale or transfer of qualifying land.
G. 
The SCRP agreement may only be assigned with the prior written approval of the Department and only if the proposed assignee demonstrates the financial ability to fulfill all of the applicant's obligations under the SCRP agreement.
H. 
Landlords are responsible for marketing, leasing, and determining tenant eligibility for the SCRP units. A lease agreement shall not be signed unless validated by a certificate of eligibility. A landlord shall not be permitted to refuse to rent a unit to an eligible tenant without providing the Department with just cause, to the Department's satisfaction, for the refusal.
[Amended 11-1-2016 by Ord. No. 2474]
I. 
If the applicant is not also the builder, the relationship between the applicant and the builder shall be fully disclosed to the Department's satisfaction, as soon as the relationship is established.
J. 
SCRP units must be fully integrated into the communities of which they are a part (not separated geographically from the market rate units and not grouped together) and shall not be substantially different in external appearance from non-SCRP units. When the SCRP units are a part of a phased development, a proportionate number or percentage of said units will be placed within each phase and/or constructed within each housing type appearing in the development. The planning and design of individual SCRP units must be consistent with the planning and design of market-rate units within a single project.
[Amended 11-1-2016 by Ord. No. 2474]
(1) 
The ratio of SCRP units by type must reflect the ratio by type of market rate units, to the extent feasible. For instance, if a development has 200 two-bedroom dwelling units and 100 one-bedroom dwelling units, the ratio of two-bedroom to one-bedroom SCRP units should also be 2:1.
K. 
The applicant will execute and record covenants confirming that:
(1) 
The covenants will bind the applicant, any assignee, mortgagee, or buyer and all other parties that receive title to the property. In the event the mortgagee acquires the property through a foreclosure or acceptance of deed-in-lieu of foreclosure, the SCRP agreement covenants will continue in effect. The covenants must be senior to all instruments securing financing.
(2) 
In any deed or instrument conveying title by the applicant, the property shall remain subject to all of the terms and conditions contained in the SCRP agreements by the applicant required under the chapter during the control period. The source of the SCRP agreements and any deed restrictions related thereto must be included in the public land records so that they are readily identifiable in a routine title search.
L. 
Where the applicant is a DDE, agreements will be negotiated between the Department and the DDE so as to be consistent with the mission, strategies, business plans and operating procedures of the DDE and may, with Council approval, deviate from the requirements of this chapter.
M. 
The SCRP agreement requires that the landlord ensure that the SCRP units are occupied only by tenants whose monthly income levels do not exceed the eligible income limit, and shall prohibit tenants from subletting or subleasing the units. The agreement shall also require the landlord to submit a copy of the initial and all renewal leases to the Director within 30 days of signing the lease.
[Amended 11-1-2016 by Ord. No. 2474]
(1) 
In addition, the landlord must supply the information listed below in a format acceptable to the Director on an annual basis:
(a) 
The number of SCRP units, by bedroom count, that are leased to eligible tenants and those that are vacant, and the monthly rent charged for each SCRP unit;
(b) 
For each SCRP unit, the tenant's name, household size, and total household income as of the date of the lease, and the effective date of the lease;
(c) 
A statement that, to the best of the landlord's information and knowledge, tenants who are leasing the SCRP units meet the eligibility criteria; and
(d) 
A copy of each new or revised certificate of eligibility obtained since the last annual report.
(2) 
The Department shall audit the report and may require such additional information needed to evaluate and accept the annual report.
N. 
The tenant must vacate the SCRP unit if the tenant's household income exceeds 80% of the area median income by 20%. The applicant must take the necessary action to have the tenant vacate the SCRP unit within six months of receiving information that the tenant's household income exceeds the eligible income limit.
(1) 
Notwithstanding the provisions of § 72-23N above, if the applicant immediately designates an additional comparable unit as an affordable dwelling unit to be leased under the controlled rental price and requirements of the SCRP program, the tenant of such SCRP unit referenced in § 72-23N above may continue to lease such unit at the market value rent.
[Added 11-1-2016 by Ord. No. 2474]

§ 72-24 SCRP units.

[Amended 11-1-2016 by Ord. No. 2474]
A. 
Rent.
(1) 
Rent shall be established and updated annually by the Department based upon 25% of household income for 50% of the area median income adjusted for household size and unit size and shall not include trash services, parking, water and sewer utilities and any other charges to be paid by the tenant.
(2) 
The eligible tenant must provide to the landlord income tax returns (and proof of payment of any taxes owed) from the previous year for all members of the household who were required to file such returns. If an eligible tenant was not required to file tax returns or if the landlord believes that information from the previous tax returns is insuffient to determine income, the landlord is authorized to request such information as it deems necessary to confirm the income levels of the proposed tenants.
B. 
Unit and household size. Households must be placed in units according to the following distribution:
Unit Size
(number of bedrooms)
Household Size
Efficiency
1
1
1 to 2
1 plus Den
2 to 4
2
2 to 4
2 plus Den
2 to 4
3
4 to 6
4
5 to 8

§ 72-25 Leasing of SCRP units.

[Amended 11-1-2016 by Ord. No. 2474]
A. 
Leases to eligible tenants.
(1) 
Every SCRP unit constructed under this program must be offered to all eligible tenants for lease as the eligible tenant's principal residence. Notification to the public of SCRP unit availability will be made by the landlord and is recommended to be made by advertising on DelawareHousingSearch.org. The Department may, but is not obligated to, provide notice of SCRP unit availability through the Department's website.
(2) 
The landlord will determine SCRP tenant eligibility under § 72-20, and lease agreements shall not be signed until the tenant has received a certificate of eligibility from the landlord.
(3) 
Annually, the Department will provide updated income guidelines and rental rates to the landlord for use in leasing the SCRP units.
(4) 
Lease agreements shall contain the same terms and conditions as the lease agreements with market-rate renters with the exception of the rental rates and other terms and conditions as required under this article.
(5) 
All lease agreements of SCRP units shall cover a period of one year.
(6) 
An eligible tenant already occupying a SCRP unit has first-option to renew the lease agreement each year, as long as the tenant maintains good standing with the landlord and continues to qualify as an eligible tenant. The Department shall be notified by the landlord of the intent to evict and the reasons therefor at the same time the landlord first provides notice to the tenant.
B. 
Tenants of SCRP units shall provide an executed affidavit on an annual basis certifying their continuing occupancy of the unit as their principal residence. Tenants shall provide such affidavit to the landlord by the date that may be specified in their lease or that may otherwise be specified by the landlord.
C. 
In the event the tenant of an SCRP unit fails to provide his or her landlord with an executed affidavit as provided for in the preceding paragraph within 30 days of written request for such affidavit, then the lease shall automatically terminate, become null and void and the occupant shall vacate the unit within 30 days of written notice from the landlord.

§ 72-26 Foreclosure or default.

A. 
The landlord must provide the Department with a copy of any mortgage default notification immediately upon receipt and a written explanation of how the default will be remedied.
B. 
If a foreclosure event occurs during the control period, the covenants endure through the transfer of property until the end of the control period.
C. 
If the foreclosure event occurs after the thirty-year control period, then all binding restrictions of this chapter will dissolve.

§ 72-27 Implementation.

[Amended 11-1-2016 by Ord. No. 2474]
Improvements to concepts, processes and rules and regulations of the SCRP program will be incorporated into future amendments of this article. Council views this article as a living document that will be modified as needed to respond to economic, housing, development, land use and other trends in the County and to best practices in affordable rental programs.

§ 72-28 Government regulations; enforcement.

A. 
The Department will maintain a list of all SCRP units constructed and leased under this program, and the Council hereby authorizes the County Administrator to promulgate and adopt regulations and approve the various agreements/documents necessary to administer this program.
[Amended 11-1-2016 by Ord. No. 2474]
B. 
The Director may, with Council approval, waive or modify the provisions of the program if the Director finds the program in conflict with state or federal housing laws.
[Amended 11-1-2016 by Ord. No. 2474]
C. 
This program applies to all agents, successors, and assigns of an applicant. A building permit shall not be issued and a preliminary plan of subdivision, development plan, or site plan shall not be approved for a development that will contain affordable rental units to be submitted to this program unless it meets the requirements of this program. The County Administrator may deny, suspend, or revoke any building or occupancy permit upon finding a violation of this program. Any prior approval of a preliminary or final plan of subdivision, development plan or site plan may be suspended or revoked upon the failure to meet any requirement of this chapter. An occupancy permit shall not be issued for any building to any applicant, or a successor, or assign of any applicant, for any construction that does not comply with this program. The County Administrator may also withhold or call in performance bond funds, letters of credit, and certificates of compliance or occupancy from the applicant for any violation of this program.
[Amended 11-1-2016 by Ord. No. 2474]
D. 
The Director is authorized to pursue any available remedy, legal or equitable in nature, to enforce the requirements of this program or to prevent or abate a violation of this program.
E. 
The Director may take legal action to stop or cancel any lease of an SCRP unit if any party does not comply with all requirements of this program. The Director may recover any funds improperly obtained from the rental of a SCRP unit in violation of this chapter.
F. 
In the event of litigation to enforce the terms and conditions of this chapter or any agreement or obligation under the SCRP program, the Department shall be entitled to an award of legal costs and fees to be collected from the party who is determined to be in violation of such agreements and obligations.
[Amended 11-1-2016 by Ord. No. 2474]