In 2006, Kent County, Delaware, offered real estate investors and developers an uncommon opportunity. It furnished plentiful farmland, beach access, a low cost of living, and a famous commitment to no sales tax. It attracted retirees and transplants hailing from more expensive nearby states such as New Jersey, New York, and Pennsylvania. As the masses converged, Kent, like many rural counties throughout the nation, attempted to cultivate (yet control) its growth.
The next year, everything changed. The boom collapsed. Within months, many Kent County homes sat vacant and unoccupied.
Sarah Keifer, director of the Department of Planning Services for Kent County, says affordable housing was a concern for the county both before and after. “There’s not a whole lot of diversity in the [county’s] housing stock and that was generally translating into few opportunities for middle- and low-income folks to get into the housing market,” she says. “Pre-collapse, we saw a need and began addressing our affordable housing profile countywide. We knew that was a problem. In the meantime, the market turned downward and eventually the foreclosure crisis was impacting us in a big way. Something had to be done quickly.”
Enter the Housing & Economic Recovery Act’s Neighborhood Stabilization Program (NSP). At the federal level, and against the advice of numerous affordable housing advocates, NSP was developed with rigid parameters and a “spend-quickly” mandate. Understandably, Congress wanted public funding to start making an immediate difference. It mandated that jurisdictions receiving money use it one way: to purchase vacant, foreclosed homes, fix them and refill them — classic foreclosure recovery.
In Delaware, NSP caught the state by surprise. At first, it didn’t anticipate receiving money—foreclosures hit Delaware later than many states and at lower levels. But it did—$19.6 million. As funds began to flow, only two of Delaware’s five local subrecipients had prior experience acquiring, refurbishing, and reselling foreclosed homes. For rural counties like Kent, while NSP was a potential solution, the knowledge gap was formidable enough that championing it proved difficult. Local government was wary of the responsibility, and most jurisdictions had real fears and concerns surrounding financial accountability and implementation, especially given the short time frame to utilize the funds.
“When the NSP was first considered by Kent County, there was some debate and skepticism that was largely tied to ‘Can you really make this work from planning through to completion? Success? And in such a way that we can account for all the money as it flows in and out?’” said Keifer. “We knew we were taking a risk. At the same time, I knew this was an opportunity to do something big for affordable housing — an opportunity to seize.”
At this intersection of funding, knowledge, and know-how, Diamond State Community Land Trust — one of the nation’s first statewide CLTs — knew it could not only help in the short term, but give jurisdictions ways to move beyond simple foreclosure recovery and into prevention.
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