Judge Chandler's Speech at Lewes Historial Society/Lewes Presbyterian Church 

SUSSEX COUNTY:  PARADISE LOST (With Apologies to John Milton)

Remarks by:  Chancellor William B. Chandler III, September 7, 2005

       I appreciate the opportunity to be with you this evening in this beautiful, old church.  And I am quite excited about the plan of action that ultimately will emerge from Lewes’ “Your Town Workshop.”  I’ve been reading about the convening of the Workshop, and the nationally recognized authorities helping in this effort.  Now, you may have heard or read that the title of my address tonight is:  Sussex County:  Paradise Lost.

       For some reason, when I was asked for a title, John Milton’s epic poem came to mind.  But don’t panic—this speech isn’t as long as Milton’s epic poem!  I borrowed Milton’s title, not so much for its tragic implications in the fundamental conflict between good and evil, but for its hopeful implications concerning redemption and salvation.  “Paradise Regained” was, of course, the sequel to Milton’s “Paradise Lost.”

As you may know, I grew up in Dagsboro, here in Sussex County.  I live there still, in the same house where I was raised.  Dagsboro was once the head of navigation on Peppers Creek, a small but locally important port.

In the 1950s and 1960s, it was a sleepy agricultural town with a stable population.  Currently, Dagsboro’s town council is wrestling with issues of housing density, residential planned communities, and open-space set asides for new development, as well as worsening traffic congestion and noise pollution problems.  L. P. Hartley, in his novel “The Go Between,” famously said that the past is a foreign country.  Well, the Sussex County I grew up in is as foreign as Mongolia to this new world of urban planning, skyrocketing property values, and  gatherings like this one—where strategies to control growth and to preserve our natural heritage—are the challenges to be addressed.

       Now, I was raised to be patient with my elders.  So, in that vein, let me illustrate just how old I am, hoping you’ll show me the same courtesy. 

I am old enough to remember a Sussex County where “a house-a-building” was a rarity to be commented on; where the main roads were paved but the countryside was farms and woods and fields; where sand road crossed sand road; where the shores of the inland bays were wooded to the water; and where watermen raked clams or worked gill nets.  The Sussex County of my youth was a place where the poorest of people often lived in the most glorious of places, where “water access” was not a concern of urban planners, but a fact of everyday life.  I can remember endless fall days walking across miles of soybean fields, crisscrossed by ditch banks and hedge rows, hunting quail and pheasant, or walking through pine woods, across a floor of pine needles mixed with crows feet and teaberries, down to the marshy grasses of the Indian River, watching my two English setters “freeze up” before a covey of quail.  Those are a few of the memories I cherish of growing up in Sussex County.

Now, when I was a few years younger than my own teenage children, the population of Sussex County was a relatively stable 75,000 people.  Half the land area of this State for 75,000 folks.  The meaning of the word Rehoboth is “room enough.”  And there was room enough for all of us then, and what we called “tourist” development was just a broth of yeast along the coast, well removed from my home at the headwaters of Peppers Creek.

       I don’t mean to idealize the Sussex County of my boyhood.  We had our problems here, grave problems.  As I look up at the gallery of this historic and beautiful old church, I am reminded that the schools and other institutions of old Sussex County were segregated by race, and African-Americans were not integrated into the social or economic life of the majority community.  There also was considerable poverty.  Outside the towns (and even in some towns), public sanitation was poor:  water came from shallow wells, and cesspits (even outhouses) were common ways to handle wastes.  All those problems, if not completely remedied, are much improved.

       While we were living our lives, however, a fundamental change took place, taking hold before we really noticed.  Much has been made in the literature and lore of this small state about the differences between  “upstate” and “downstate.”  We bear the label, as we often hear, of being “slower, lower” Delaware.  And there has been a difference, but it is perhaps more than can be explained in simple terms of urban and rural.  In his book, “Albion’s Seed,” on the importation of English folkways in the settlement pattern of the United States, David Fischer describes the culture of New England, the Middle Atlantic states and the Tidewater South as being quite different in their concepts of liberty and democracy, based on different traditions in the areas from which settlers of those regions originally came.  In the Tidewater South, in which Fischer includes, demographically, Kent and Sussex Counties, notions of “freedom” were linked strongly to freedom of the individual from the interference of his neighbors or his government.  Fischer contrasts this with the more communitarian understandings of freedom and democracy as found in New England and the Mid-Atlantic region, which included New Castle County.

This Tidewater spirit of independence—and its resultant coloring of notions of what freedom and democracy represent—was a notable aspect of the Sussex Countian of my youth, and it remains so, albeit in diluted form today, despite the fact—and it is a striking fact—that over half the people living in Sussex County today were born not just outside Sussex County, but outside Delaware!  It is a spirit of independence that is strongly protective of the rights of private property and suspicious of government interference with those rights, a hallmark of the individualism of Sussex Countians.  It is a philosophy consistent with private ownership of tracts of real estate, consistent with an economy based on farming, fishing, and small business.

       The ground, however, has shifted beneath us.  Every year, the economy of this county is based less upon agriculture, fishing, or manufacturing, and more upon the so-called service professions that cater to the majority of the county residents who have moved here in recent years, many of them elderly and needing (and able to pay for) many services.  The consequences of this have been profound.  There are many new jobs, but they pay poorly and do not lead to advancement.  Growth in family income is near stagnant and the disparity between the poor and the wealthy parts of our population has grown.  That condition is exacerbated by the booming population growth that causes a corresponding boom in real estate values, enriching a few but driving rents beyond the reach of many.  The waterfront communities of poor people that existed in my youth are no more. 

       In the face of these changes, a majority of the people of Sussex County have stood by, largely passive.  A few have been outspoken, but not many.  Why is this?  It may be due, in part, to the tradition of independence, freedom and the strong respect for private property I mentioned earlier.  It may also be due, in part, to the fact that the true costs of rapid development remain largely hidden from Sussex County taxpayers.  Fareed Zakaria has written a powerful book, “The Future of Freedom,” on the link between “oil economies” (like those in the Middle East) and political immaturity.  His thesis is that because oil extraction pays most of the government infrastructure costs of many Middle Eastern states (what he terms “trust fund states”), the people in those states do not directly confront the costs of governmental mismanagement in their tax structure.  History teaches that such arrangements breed complacency and apathy toward government.

       I am not suggesting that anything so dramatic is happening here.  But it is noteworthy that Sussex County continues to be funded by property taxes at extraordinarily low rates, based on assessments years or decades out-of-date, while the brunt of increasing county governmental expense is met from taxes on newly developed (and appraised) properties together with the largely invisible realty transfer tax.  Being insulated in this fashion from the costs that massive development is placing on our county arguably may have bred complacency here as well.

       So what happens when our county is “built out?”  Are we mining our main resources—inexpensive developable land and unparalleled physical beauty—any differently than, say, the ghost towns of Nevada did with their veins of silver ore, or the blighted and depressed areas of the English Midlands did with their mines of coal?  Looking far ahead, what would be the political consequences of such a “mining out” of the beauty that was the heritage of Sussex County?

       One of the smallest independent countries on earth is the Island of Nauru in the South Pacific.  Nauru was once an idyllic place with fertile land and surrounded by coral reefs, but Nauru had the fortune, or misfortune, to exist literally on a lump of bird lime, a rock of phosphate so valuable that European powers located thousands of miles away fought small wars over it.  When independence came to Nauru at the same time I was growing up in Dagsboro, it finally controlled its own resources, or more precisely, its resource, the mountain of fertilizer on which it stood. 

       The phosphate of Nauru was developed, and by some standards, and for a few years, its citizens were technically the richest people on earth per capita.  And then, the great rock of phosphate ran out.  The money was gone and, more importantly, most of the island was gone.  Today, Nauru exists as a fringe of ground along the ocean surrounding a gigantic and sterile pit that was once the center of the island.  The government of the island of millionaires now relies on foreign aid for its budget.  What will the children growing up today say of their elders on Nauru?  What will our children and our children’s children say of those of us who were at the helm in perhaps the decisive moment in Sussex County?  Will they praise us for setting forth principles under which development can be beneficial or at least benign; or will they damn us for mining the beauty of this land and squandering the proceeds?

Many years ago, the people of this state made a decision that we would reject industrial development in order to preserve the beauty of our coastal areas.  In many ways, this has been an immense benefit to Sussex County.  But like every action, it caused a reaction.  By excluding most industry, we encouraged another, the tourism/retirement industry that now dominates this area.  We mine our past–our poignant and vulnerable beauty–and create for ourselves and our children a very different, and in many ways poorer, future.  Despite its reputation, the industry of providing housing and services to tourists and retirees is not a “clean” industry.  It monopolizes huge amounts of land, and the needed infrastructure and resulting effluents create a myriad of problems—what economists call externalities.  Nor is it an industry that produces high-skill, highly-paid jobs.  Our unemployment rate is low, but the jobs available are as service workers to our new residents, jobs that pay little, require minimal skills and provide meager hope for advancement.  The result is a community increasingly divided by social class.  One of the blessings of the rural Sussex of my youth was that poor families and what passed for wealthy families inhabited largely the same society: we went to school together, shopped at the same stores, worshiped and worked together.  The growth of Sussex County has not been kind to this tradition.  The County is increasingly divided into two classes: first, those relatively wealthy individuals who come here (or locals who make immense profits selling out to large development companies), and second, the children of the local population, who make a living serving the first group.  Increasingly, locals cannot afford to live in the towns in which they grew up, and the County struggles to provide low and moderate-income housing amidst a building boom.  This stratification—this economic bifurcation—cannot be a positive thing.  I note that the article in the local paper promoting this very conference was just a column-inch above a realtor’s advertisement announcing two million-dollar homes.

       I said earlier that Sussex Countians historically have valued independence, privacy and private property rights.  I share those values strongly.  In one of the most profound and important works in modern economic theory, Garrett Hardin described the “tragedy of the commons,” the ruinous overgrazing of English village commons that occurred because the land was owned in common and thus no one had an incentive to act as its steward.  The solution, according to Hardin, was to privatize the commons, so that the profits and losses of any actions taken on the land were incurred directly by the landowner.  In a sense, the “tragedy of overdevelopment” to echo Hardin perhaps overdramatically, is attributable in a sense to the same problem.  The physical beauty, and the sense of community and freedom, that were such a part of my boyhood were enjoyed in common.  The opportunity costs of maintaining that beauty and lack of development fall only on the landowner, however; or conversely, the profits of overdevelopment inure only to the landowner, while the loss occasioned by that over development falls on everyone.  The results of this “market distortion” tragedy, if that is what it is, are concrete and all too widely known.  If I am right, how can the incentives be changed in a way that doesn’t invite government coercion that becomes a remedy more oppressive than the disease itself?

       How should we respond to this challenge?  That, of course, is the central question for all of you.  I note that one traditional response to the kind of market distortion that I have described is the imposition of government regulation.  This is self-evidently true in the area of land development.  Sussex, of course, has a zoning code.  Each of the municipalities has a zoning code and other requirements limiting the ability of a landowner to develop his property.  Government action is not a panacea, for a number of reasons.

These remarks are not the place to get into a discussion of all the challenges (and even failures) that arise from attempting to control development using the regulatory approach.  Let me mention two obvious ones:  first, because regulation must apply to areas and classes of development rather than individual properties, it can result in remarkable market distortions and inefficiencies.  And second, the application of the best-intended regulations can have unintended and unfortunate consequences.  Recently, the town of Lewes enacted an historic preservation ordinance.  As a result of the desire on the part of a landowner not to be subject to the requirements of the ordinance, a building of historic importance that probably would otherwise have been saved was demolished just before the ordinance took effect.  In other words, a regulation designed to preserve historic structures appears to have had as its first effect the destruction of just such a building.

       Relying on a regulatory approach also imposes tremendous burdens—burdens that are, frankly, unfair—on the local governments of this County.  Our local governments are composed of citizen-legislators who are paid a token, if at all.  These local councilmen and women, who stood for office out of a desire to do good and to help their neighbors, in years past deliberated whether the revenue of parking meters would offset the costs imposed on local merchants, whether the town’s Christmas decorations should be replaced, or whether to float bonds to upgrade storm sewers in the business district.  These same people are now faced with decisions that profoundly affect the quality of lives of town residents and which can make, or break, fortunes for landowners and developers.  They must make these decisions amid often shrill demands from local residents and under pressure from influential and often-sophisticated developers and their lawyers, with potential litigation always a threat.  These pressures—brought to bear on good folks who are, in some instances, unprepared by training or temperament to withstand them or, in other instances, hopelessly conflicted by personal interests—have led unsurprisingly to development decisions that are often inconsistent, arbitrary and ad hoc, and in too many cases, frankly, unwise.  Both landowners and the public have at times suffered the results. 

       If regulation is not the answer to controlling development, or at least the entire answer, what else can be done?  Before governmental regulation dominated the field of regulation of land development, such development was largely regulated by private action.  That is, a landowner’s use of his property that did damage to his neighbors could be the subject of a nuisance or trespass action.  Landowners also used, and continue to use, contractual arrangements and deed covenants to reciprocally bind one another to limit or direct development of real property.  Individuals, or government for that matter, can purchase certain property rights such as development rights in order to preserve desirable aspects such as open space for the benefit of neighbors or for the public at large.  Because, perhaps, of the pervasiveness of the regulatory approach, private actions have not been fully exploited to try to apply market solutions to the problems of development.  I say this not to disparage the regulatory process, which has a vitally important place in the area of land development and preservation, but to encourage you to be creative in your consideration of how to ensure that the continued growth of the county is beneficial to its citizens.  I said earlier that I fear that we may be mining the natural beauty of Sussex County for short-term gain, in a way that will draw our grandchildren’s condemnation.  What we must do is find a way to instead preserve that beauty as a renewable resource that, if tended, bestows its benefits on generations yet to come as it has upon us here.

To offer a simple example, I have talked already about the real estate transfer tax, and about what may be the pernicious effects of insulating the citizens from the true costs of their government.  Currently, the State and the County are debating whether that tax money would be better returned to the State government (from whence it came) and put to other uses.  In effect, the transfer tax receipts have become a marker for the scope of the development of the County, rising as the County sinks under the weight of increasing population and urbanization.  The transfer tax is, in effect, a kind of tax on destruction.  What more fitting source, then, for a fund to implement programs to ameliorate this destruction?  In a host of ways I am sure you will discuss here, whether through purchase of development rights, preservation of open space, or one of a myriad of other ideas I am sure I have not yet considered, the transfer tax could be used to create a remediation fund to ensure the quality of life of future generations of Sussex Countians.

I know there is a value to living in a place that retains its natural beauty and some of the rhythm of rural life, and that this value is keenly felt by those who live in such a place, although it is not reflected in the sales price of a parcel of land for development.  There is a value to looking out your kitchen window of a morning to watch the early light spread over your neighbor’s fields.  There is a value to riding to work or to school past the beauty of fallow fields and growing crops, through the shadows of oak thicket and pine woods.  There is a value to knowing the smell and the taste of the natural world as it passes through its seasons.  There is a value, after all, that makes people uproot their lives and move here, paying housing costs that would have seemed frankly lunatic scant years ago.  That value is real.  The problem is making that value, the benefit of its preservation and the cost of its loss, part of the calculus of development decisions. 

       I am hopeful that, working together to advance this common goal, we will lay aside our differences and come together as a community—a community of Sussex Countians.  Your job, our job, is to act as trustees for the beauty and heritage of Sussex County—for the generations who will follow and who one day will judge our stewardship.

       Thank you for your attention, and for inviting me to be with you this evening.  And good luck in your efforts.