Is growth choking Delaware beach towns?

More than 20 million people live close enough to Rehoboth Beach that if they decided to drive there after breakfast, they would get there in plenty of time for lunch. And starting this Memorial Day weekend, as it does every summer, it will sometimes seem like half of them decided to do just that.

The cars are going to stack up 20 deep at red lights on Del. 1. Weekly renters will descend on all the good parking spaces. Restaurant waiting times will stretch for hours.

And thousands of year-round Rehoboth Beach-area residents will once again ask themselves: Didn't I come here for the peace and quiet?

Every summer tourism reinvigorates eastern Sussex County's conversation about growth, a constant point of friction since the 1980s, when money, development and busy-ness began to steadily pile on tranquil towns like Lewes, Dewey Beach, Bethany Beach and especially Rehoboth Beach like sand added to a sand castle.

This friction was the subtext behind the recent tussle between Dogfish Head and the Rehoboth Beach Board of Adjustment over whether the popular brewpub could break a municipal limit on restaurant size to take on a major remodel.

One board member who voted to deny Dogfish Head said it mattered that the expansion would occur on Rehoboth Avenue downtown, "where it's already crowded." For the brewpub, of course, that was a selling point, not a means to deny progress.

You don't have to agree with the board's initial rejection of Dogfish Head's plans – and many did not agree – to wonder if Rehoboth and the region risk being trampled by growth. That includes more traffic, skyrocketing land values, the replacement of small-scale stores with commercial chains and small cottages with million-dollar villas.

Mable Granke worries about it constantly. A Rehoboth Beach resident since 1989, she and her late husband bought a house in town for $95,000 in the mid-1980s, a cottage on a residential street.

A retired land planner who's served on the Rehoboth Beach Planning Commission, Granke said traffic in the region – particularly on Highway One – is approaching a tipping point.

She also worries about the upscaling of Rehoboth Beach's housing stock, the replacement of small homes like hers with grander residences that, from the start, are intended to be rented to groups of eight, 12, even 20 people at a time.

That's a trend the Rehoboth Beach Board of Commissions has been trying to manage, with a moratorium on new pools and enactment of strict noise limits – policies that have their own detractors.

Granke, for her part, thinks the growth has already put Rehoboth and the region at risk. "We're almost to the tipping point of destroying why people want to come here, by making it difficult to come here," Granke said.

Others are more optimistic about the changes. Scott Kammerer, president of the restaurant company SoDel Concepts, says Rehoboth's hustle and bustle is a sign of prosperity, not a symptom of overgrowth.

"Parking scarcity is a result of success of the town," Kammerer said. "The town's at capacity... I don't think it will ever get less busy. There may be people who don't like it, but they'll be replaced by another group of people."

Overwhelming traffic

All the coastal towns are dealing with growing pains to differing degrees.

In Lewes, there's concern about managing a residential development boom on unincorporated land around Gills Neck Road. In downtown Lewes, intense redevelopment is largely checked by its historic district.

Bethany Beach is dealing with the long, difficult process of widening Del. 26, the only artery linking it to western Sussex. The town will soon have a new 112-room hotel that, when it was getting approvals, worried many that the Quiet Resorts would soon start to resemble Ocean City, Maryland, and its dozens of high-rise condos and hotels.

Of all the beach towns, Fenwick Island has probably changed the least since the 1980s; worn-shingle, modest homes on stilts are still the norm there.

It's Rehoboth Beach and its rowdier, younger cousin, Dewey Beach, that have seen the most substantial change. One of the most measurable effects has been traffic.

In the summer of 2000, Department of Transportation traffic count data shows, the average daily traffic count on Highway One near the outlets was 61,000 cars. That was the high-water mark for summer traffic, as bad as the roads got.

By 2014, that peak had become the new normal, with a year-round average daily traffic count at Highway One and Rehoboth Avenue of 61,100 cars. The traffic load for December 2014, offseason at the beaches, was 46,000 cars a day – not too far off what, in 2000, had been a summertime scenario.

The Rehoboth Beach comprehensive plan, which gives its land-use boards and elected officials their broad marching orders, is full of concern and worry about what all that growth on Rehoboth's doorstep could do to livability.

Rehoboth should "avoid outsized and inappropriate development that can crush the fine-grained urban fabric that makes downtown Rehoboth attractive in the first place," the plan pledges. As for traffic, the plan was clear: pedestrian needs should come first.

"Rehoboth is essentially built-out," the plan said. "Rehoboth will accept more people, but it will not accept more cars."

Highway One, however, in unincorporated Sussex County and managed by DelDOT, has been repeatedly expanded to accept more cars. As the comprehensive plan notes, Rehoboth residents who used to patronize stores and groceries in town had little choice but to follow them out of town when those businesses set up shop on the highway, where they're passed by even more potential customers.

At the same time, residential property values inside Rehoboth's city limits are way up as its popularity has increased. It's prompted a boom in rental-property investment. A 2010 estimate by the city suggested the Rehoboth vacation home rental economy alone amounted to $13.3 million annually – more than the city's entire municipal budget today.

John Bloxom lives just outside Rehoboth, and recently, he and his wife bought a residential lot in the resort, intending right from the start to treat it as an investment vehicle by building new construction on it and renting it out. It was a better bet, Bloxom said, than traditional investment vehicles like stocks or mutual funds.

"In this entirely yield-starved environment, we were looking for passive income as we go into retirement," Bloxom said. "And Rehoboth is much more of a resort destination than Lewes. Lewes has no boardwalk, little to no parking. It's more of a traditional coastal town, in my view." Rehoboth, he felt, was a resort through and through.

Rehoboth's elected officials, though, have been turning something of a skeptical eye on its rental economy, because of quality-of-life complaints that year-round residents say fall at the feet of absentee homeowners and their tenants.

The town sends employees out to monitor sound levels with decibel meters; loud households are fined. There is currently a moratorium on new residential pool construction in town, again because some say pool parties often grow boisterous and out of control.

Many point to large, new construction homes as the main culprits, built to be rented and featuring six bedrooms, eight bedrooms or more. Some are only buildable because owners joined two 5,000-square-foot lots to make one megalot. Not all large, new homes in Rehoboth are rented in the summer season, but many are.

Granke and others say these dwellings are especially problematic because they don't need to provide more than two off-street parking spaces. The units add to the crunch of cars parking on Rehoboth's unmetered streets, where seasonal permits are required.

"The latest threat to the character of our city is the proliferation of what have become known as mini-hotels, large homes built in our residential neighborhoods for the express purpose of rental to large groups of vacationers for strictly commercial purposes," said a February letter from a Rehoboth civic group, Save Our City, to the mayor and commissioners.

Bloxom bemoans the city's willingness to regulate the rental-home economy, especially the focus on homes with pools, like his. In workshops, Mayor Sam Cooper and others have discussed requiring homes to put locked covers on their pools when the homes are being rented, which maddens Bloxom.

"There are guys out there building eight-bathroom, 12-bedroom structures with no associated off-street parking. That needs to be addressed," he said. "But my wife and I invested seven digits in retirement income property that Sam is trying to rip away from us."

Granke thinks the dilemma posed by increasingly large groups of renters is acute, largely because of the parking strain.

"We have had the trend – and our commissioners are working very hard on it – where these huge homes were being built and then immediately thrown on the market for rental," Granke said. "The minute you have a four-bedroom home, you're looking at up to eight cars, and they have nowhere to park... People are calling them, and I think it's accurate, mini-motels. They're not homes. This is going to destroy Rehoboth, the reason families want to come here."

Dogfish Head caught up in fight

For many people, the denial of a needed size-limit exemption for Dogfish Head Craft Brewings & Eats on April 27 came as a shock. Few companies are as closely identified with Rehoboth Beach as Dogfish Head, and it struck some as odd that a city board would give them no deference.

But the same worries about mansionization of Rehoboth's residential districts are at play in its commercial areas. In 1991, Rehoboth placed a 5,000-square-foot limit on restaurants – the limit that is Dogfish Head's stumbling block at the moment – and commissioners have declined some repeated invitations to repeal the limit.

"Does 5,000 [square feet] for restaurants even make sense here, in the vacation capital of Rehoboth?" said Mark Dunkle, an attorney for Dogfish Head, in an April town meeting. "It probably doesn't."

Cooper, the mayor, defended the restriction, saying it prevents businesses many in Rehoboth would view as nuisances – sprawling bars in the style of Dewey's Bottle & Cork, Starboard or Rusty Rudder – from getting a foothold.

"It's served the city very well," Cooper said. "I think it's served us so well that we have a very good downtown. Maybe we don't have a problem because we have the ordinance."

On Monday, the Board of Adjustment agreed to revisit Dogfish Head's request, likely at a June meeting. If Dogfish Head prevails, it will be behind schedule in seeking further approvals and moving toward its rehab.

"We were hoping we'd be further along in the process," Dogfish Head CEO Nick Benz said. "It's costing us time. But if we get to a place where we play by the rules, do something great for ourselves and great for the community, then it will all be worth it in the end."

Contact James Fisher at (302) 983-6772, on Twitter @JamesFisherTNJ or jfisher@delawareonline.com.