This story appeared in the June 2000 issue of Delaware Today.While property values skyrocket, Rehoboth worries about the character
of its neighborhoods.By Terry Plowman
Gasoline cost 6 cents a gallon, bread was 4 cents a loaf, and lots in Rehoboth Beach could be bought for $50 when the little Georgian farmhouse-style beach cottage was built on the corner of Surf and Oak avenues in the early 1900s.
Its white fish-scale siding, shuttered windows, gingerbread trim and wrap-around porch gave it a classic look that fit nicely with other homes in the neighborhood -- a look that would come to define Rehoboth's residential character.
After serving generations of the Mifflin family for more than 90 years, the little oceanfront cottage was sold to Washington, D.C., lawyer Bernie Nash, who evaluated how much it would cost him -- on top of the $490,000 to buy the house -- to bring it up to modern standards and to improve its ocean view.
Beach cottages of that era were built only for summer use: no heat, no insulation, few amenities. To make the house usable year-round -- with heat, air-conditioning, new plumbing, new electric service, new appliances -- and to enlarge the house and improve the view would have cost about $300,000, Nash says. For about 20 percent more, he could build a new house.
So the little cottage was torn down in 1996 -- much to the chagrin of local residents concerned about historic preservation.
In the house's place sprouted pilings and a modern, much larger beach house. In a nod to the historic structure he demolished, Nash adorned the new house with the upside-down heart-shaped trim that had decorated the peak of the old house.
"We did not want to knock the house down," Nash says. "But the reality is that you cannot buy a house like that and restore it so that it's worth what it cost (to renovate it). That house was an appropriate beach house 50 years ago -- small, no modern systems. But today, who's going to pay $500,000 for a house you can't live in? You know, just as beauty is in the eye of the beholder, so is appropriate scale in the eye of the beholder."
Nash's dilemma represents a struggle occurring all over Rehoboth Beach: Skyrocketing costs for even modest beach homes are leading affluent buyers to demolish older structures in favor of building newer, larger homes.
Concerned about that trend -- there were 16 demolitions in 1999 compared to the usual average of three a year -- Rehoboth Beach commissioners in February slapped a six-month moratorium on all new construction until they can revise the city's zoning code to better protect Rehoboth's "character."
The effort at what they call "neighborhood preservation" isn't new. It's just the newest in a series of similar efforts, none of which has been able to muster enough support to become law.
In 1988 a committee spent months developing a plan for an architectural review board that would decide whether proposed structures had "good scale and architectural character, (and were) harmonious with neighboring structures."
Unfortunately for its supporters, the proposal was dead on arrival when the committee chairman, Commissioner Jack Hyde, cautioned fellow commissioners that it might not withstand legal challenge. Hyde, a lawyer, quoted from a 1964 Delaware Superior Court case: "Aesthetic consideration alone or as the main end do not afford sufficient foundation for imposing limitations upon the use of property."
In 1995 the city again took up the topic when it considered a historic preservation ordinance that promised to protect "the overall character and unique aspects of Rehoboth Beach as a small historic ocean resort." It would have created various historic districts, requiring that renovations and new construction within them be compatible with the general characteristics of neighboring homes.
The idea never got off the ground either, mainly because the ordinance seemed to be written for a town like Cape May, New Jersey, which has a clearly defined architectural style. Rehoboth's architectural history was more of a hodgepodge, and, according to Mayor Sam Cooper, the ordinance seemed to address only those structures deemed "historic," while not regulating all structures in the neighborhood.
While the historic preservation ordinance stalled, development of a long-range plan for the city was gaining momentum. Hundreds of citizens were participating on numerous committees that tackled such topics as transportation, community services and infrastructure in an effort to forge a vision for the city's future.
When the plan was adopted in 1996, it included the first mention of historic preservation that carried the force of law. Six distinct neighborhoods were defined. The plan calls for a "concerted effort to implement a "Historic Preservation/Conservation Ordinance" to protect those neighborhoods. It's that mandate that has Rehoboth Beach on the verge of putting some teeth into preservation -- teeth that may take a bite out of developers' profits.
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Consultant Shawn McCaney patiently guides an hour-long discussion about front porches as Rehoboth planners and commissioners work out the details of the proposed Neighborhood Preservation Ordinance. "We'll have the most sophisticated porch ordinance in the country," McCaney jokes.
Taking a tip from the failed Historic Preservation Ordinance, which would have created districts, the new ordinance would recognize the six "neighborhoods" defined by the long-range plan: the Historic District (roughly the residential streets that border the central business area), The Pines (residential areas north of Rehoboth Avenue), Rehoboth Heights (also called South Rehoboth, the residential area south of Rehoboth Avenue), the Grove/Camp Meeting Area (the western section near the Lewes & Rehoboth Canal), Country Club Estates and Schoolvue (both in the city's southwest section).
In order to avoid the legal quicksand of subjective standards such as architectural style, city officials will rely on measurable standards for each neighborhood, such as setbacks, height and lot coverage.
Based on measurements made during a 1999 study by the University of Delaware, different standards will be developed for each neighborhood -- a departure from the current zoning code that applies one standard to the entire town. In general, the UD study showed that older homes in Rehoboth Beach are not built to the maximum limits, which allow houses to cover half a lot, to be built within 6 feet of the lot lines on each side, and to be 35 feet high.
Another standard is the floor-area ratio, which now allows a house to have a floor area equal to 70 percent of the lot area. A 3,500-square-foot house, for example, could be built on a standard 5,000-square-foot lot. Most homes are much smaller than allowed and have wider side yards.
"The zoning code doesn't reflect the built character of our neighborhoods," says Cooper. "If you took a neighborhood and built it according to the zoning code, people would be appalled at the look they'd get."
In fact, they are getting it here and there, as developers do just that. But the developers complain that they are doing nothing less than following the letter of the city code.
Developers Ronnie Moore and Jim Kiernan aren't apologetic about the large five-condominium complex they are building at Brooklyn and King Charles avenues.
"Some people complained that it's not consistent with a single-family street, but 70 percent of the houses on that street are multi-family," says Kiernan.
But it's actually the massive size of the structure that has brought complaints from some residents, who say it looms over the small cottages around it. Says Moore, "We're just doing what was allowed in the code."
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"Barracudas" is what city planning commission chairwoman Mary Campbell calls developers. "The people who are doing this don't care about Rehoboth. They're just trying to make a fast buck." She's still angry about the phone call she got in July, just days after her husband died; A real estate agent wanted to know if she were ready to sell her Oak Avenue property -- "even before he was buried," Campbell says.
Campbell has been at the forefront of the fight against another tool developers have used more frequently in recent years: "partitioning" large lots into smaller ones.
The standard lot size in Rehoboth Beach is 50 feet by 100 feet, or 5,000 square feet. Partitioning allows property owners who own 100-by-100-foot or larger lots to divide them into the standard size and build on each one. The effect is a more crowded streetscape, critics say.
City commissioners earlier this year overturned the planning commission's rejection of two partitioning requests when the city attorney advised them that there was no legal basis for their denials. The code allows a 5,000-square-foot lot, so creating that size out of larger lots is permissible, he said.
But Commissioner (and former planning commissioner) Patti Shreeve argues that the zoning code supports the planners' position. It reads, in part, "The purpose of these regulations is to lessen congestion in the street, to provide adequate light and air, to prevent overcrowding of land, (and) to avoid undue concentration of population. The regulations are made with reasonable consideration (for) the character of the district, with a view to conserving the value of buildings and encouraging the most appropriate use of land throughout the municipality."
Jamming two taller homes onto a lot where there was one shorter one and replacing lawns and landscaping with the required four parking spaces devalues the neighboring properties, critics of partitioning contend.
"Property rights are two-sided," planning commission member Mable Granke says. "Why should people have their setting degraded?"
But property rights are a hallowed American issue, and one that lawyers aren't hesitant to wave.
In a letter to city officials in March, lawyer and Rehoboth Beach property owner Patrick O'Donnell called the moratorium "a radical, extraordinary and unlawful taking of another's property rights."
O'Donnell, who owns a 100-by-100-foot lot, later said that although he has no immediate plans to seek a partitioning, he wants to keep his options open. "Believe me, they will be in court real fast if people are unable to use their property as they previously could."
But Cooper shrugs off O'Donnell's warning, saying that as long as changes to the zoning code are applied consistently and with measurable standards for all properties, they will withstand legal challenges.
Planning commission member Ed Cerullo adds, "Cities have the right to do planning. We're not pioneering anything here. We not only have a right (to revise the zoning code), but a responsibility to do it. I think it's in the interest of the community at large."
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Despite O'Donnell's shot across the bow, property values -- not property rights -- are at the center of the neighborhood preservation issue.
In just the past three years, real estate prices in Rehoboth Beach have doubled from about $200,000 for an average property to about $400,000. The land value has outstripped the value of the house on it, as evidenced by sales this winter: A small, plain cottage on Columbia Avenue sold for $505,000, an unattractive house on a double lot on St. Lawrence Street sold for $700,000, and a run-down Victorian on a 100-by-125-foot lot in the ocean block of Olive Avenue sold for $900,000.
The cost of demolishing a structure has made vacant lots even more desirable -- two lots carved out of a partitioned three-lot parcel on Bayard Avenue sold for $399,000 and $425,000.
The surging economy, awash in newfound stock market profits, is creating the classic supply-and-demand scenario. The few properties available in Rehoboth's desirable neighborhoods at any one time go to the highest bidder. "When you spend $400,000 on a lot, you want a house with amenities," says Realtor Bob Reed. Most of the homes being torn down are not suitable for year-round living, he says, and many do not have air-conditioning, extra bathrooms, modern kitchens, adequate closet space or other features homebuyers expect.
Reed, who has lived in Rehoboth Beach since he was 4 years old, says, "When I was a kid, Rehoboth was a place to stay in the summer. Now people are coming all year. They want their homes to be available year-round, and they're planning to use them when they retire, so they want to have the same amenities they have at home."
Reed and other developers assert that these new homes are improving the city, not degrading it. "Some of the homes that are being torn down are not livable or attractive. I'm not convinced that you want to preserve everything where, in some cases, you can improve it," Reed says. He believes that the newer year-round homes make Rehoboth even more desirable, which benefits all homeowners. "I doubt that people are unhappy about the appreciation in the value of their property," Reed says.
Moore also bristles at criticism that developers are degrading the town. He points to the project he and Kiernan did on Olive Avenue, where they tore down the old Victorian house and built two Colonial-style homes. "We improved the property value there. That place was a safety hazard. It was structurally unsound, infested with fleas, had cats breeding under it. It sat on the market because nobody wanted it. We built two beautiful houses where we could have built three townhouses. We improved that neighborhood."
Developers and preservationists also disagree about the effect of new construction on the city's "clientele." Moore and others assert that the new houses attract affluent residents who use their properties throughout the year -- "high-quality people," as Moore calls them. But critics charge that traditional family homes are being replaced by new houses designed for large groups and absentee owners.
It's interesting that both sides call on Rehoboth's history for support. Says planner Mary Campbell, "We want to preserve the history of how Rehoboth has developed from camp-meeting (tents) to homes with wrap-around porches. We want to preserve the uniqueness of Rehoboth." Shreeve notes that developers all over the country are trying to imitate charming small-town communities. "We already have a traditional town," she says. "We should preserve and improve it."
But developer Wilma Howett, who has been criticized for seeking partitions of oversize lots, says Rehoboth's history as a summer religious retreat led to the construction of "cabins and bungalows that weren't intended for year-round use. Many of those properties have become somewhat outdated and obsolete."
In cases where an older property has features worth saving, such as hardwood floors or a nice fireplace, Howett encourages renovation. But she also believes developers can build new homes that fit in with the neighborhood. As proof, she points to several stylish 2,000-square-foot homes she has built in the town, including one that may be profiled in Architectural Digest.
"Developers have a responsibility to work within the charm of Rehoboth," she says.
Critics, of course, charge that Howett showed little concern for the neighborhood around 104 Columbia Ave., where she squeezed three houses onto a lot that previously had a small log cabin and lots of trees. "Maybe we should have put more landscaping in there," she acknowledges.
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Despite the disagreements, all parties seem to support the idea of some controls on development.
"We need reasonable restrictions," says Bob Reed. "We need to find the balance between allowing houses that are too bulky for the size of the lot and allowing people to build livable houses."
The proposed restrictions were due to be completed by late May, with a vote on them possible this summer. Proposals may include larger side setbacks, so that houses are farther apart, and a slightly smaller lot-coverage limit and floor-area ratio to prevent overly large structures. Changes may be proposed for the 35-foot height limit or the way it is measured in order to promote pitched rather than flat roofs. And don't forget those front porches -- the front setback rules may be changed to encourage them, and parking will likely be prohibited where front lawns would be.
The goal is to encourage construction of houses that blend with the town's existing homes -- a common-sense goal for the plainspoken Mayor Cooper. "How can you come in and say, 'I love Rehoboth,' then build a huge house out of character with the neighborhood? If you really love Rehoboth's character and charm, you shouldn't ruin it."
Cooper recognizes that previous preservation efforts have failed, but he thinks the time is right for one to pass. "It's my sense that in every neighborhood, people have seen something that shouldn't have happened. If it doesn't (win approval) now, it will eventually. As people see what happens in their neighborhoods, they'll say we need some controls."
Will the changes squash the town's booming new-home market? "I'm not sure that in the end profits are any greater [if you build oversize houses]," Cooper says. "Anyway, I believe property values will be even greater 20 years from now if we do this than if we don't."