On October 24th, the Rehoboth Beach Planning Commission reconvened to continue the preliminary review of Oceanside Reserve, a new residential development proposed for 20699 Coastal Highway. 

The 7.74‑acre site is planned to host 33 single‑family homes, a bump from the original 31 lots submitted. 

The meeting, available to watch via YouTube, focused on balancing neighborhood expectations with the requirements of commercial zoning.

Commissioners voiced concern that the zoning could allow homes of up to 7,100  square feet, compared with about 6,000 square feet in residential zones.

Residents, city officials and the developer studied the layout, setbacks, home size allowances and whether covenant restrictions will be strong enough to keep the scale in line with nearby neighbourhoods.

Project Background and History

Oceanside Reserve is proposed by Cape Communities LLC on behalf of Ocean Bay Mart Inc., the property owner. 

The project falls within the C-1 commercial zoning district, which allows larger building sizes than typical residential zones. 

Now, the plan subdivides the property into 33 single-family lots, slightly more than the 31 originally proposed earlier this year.

This site already has a complex history. Years ago, a development called BeachWalk was planned for the same parcel, which ultimately failed after legal disputes with the city. 

Since then, the property has remained largely vacant, making this new proposal a significant step in shaping development along this portion of Coastal Highway.

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Revised Plans and Community Considerations

The developer presented changes aimed at improving neighborhood compatibility and addressing concerns raised in previous reviews:

• Increase in lots from 31 to 33
• Removal of a rear alley from the original design, which had raised safety and emergency access concerns among city officials
• Covenant restrictions, including:
  • Restricting construction traffic to Coastal Highway access, prohibiting use of Terrace Road
  • Adopting front, rear, and side yard setbacks in line with R-1 residential zoning, despite the property’s C-1 classification
  • Enforcing a minimum rental period of thirty days for all homes

Community members and commissioners noted several enhancements, including additional green space and upgraded sidewalks, which contribute to a safer and more attractive streetscape.

Zoning Challenges and House Size Concerns

Despite these improvements, zoning remained a central concern. Because the property is commercially zoned, it allows for larger homes than would normally fit a residential district.

Commissioners highlighted potential issues:

• Under current C-1 zoning, standard lots could allow homes up to 4,300 square feet, compared to a 3,600-square-foot limit under R-1 residential zoning
• Larger lots could allow homes exceeding 7,000 square feet, raising questions about neighborhood scale
• Reliance on homeowners’ association covenants alone may not prevent future commercial development

The Planning Commission emphasized that the project’s restrictions need to address lot coverage, setbacks, and natural area protections to ensure the subdivision aligns with the expectations of a residential community.

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Planning Commission Decision

After careful discussion and review, the Commission did not approve the subdivision plan. Instead, members voted to:

• Allow the developer to pursue approvals from other regulatory agencies
• Keep the subdivision’s preliminary review active, requiring further refinement before final approval

This decision allows progress on procedural fronts while ensuring that zoning concerns remain central to the ongoing review process.

Environmental and Infrastructure Considerations

Stormwater management and site drainage were also discussed during the October 24th meeting. 

The developer stated that impervious surfaces would be reduced from nearly 90% to approximately 40%, improving drainage and reducing runoff into nearby Silver Lake. 

This approach also aligns with the city’s broader sustainability initiatives, including the pending stormwater utility, which aims to fund infrastructure improvements and better manage stormwater across Rehoboth Beach.

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Takeaways from the October 24th Review

The Planning Commission recognized meaningful improvements in the revised plan, including:

• Improved lot layout
• Enhanced green space
• Better pedestrian access and sidewalks

However, questions around home size, density, and the commercial zoning designation remained unresolved. 

While the subdivision plan was not approved, the Commission voted to keep the review open and allow the developer to pursue other agency approvals in the meantime, providing an opportunity for further refinements before final approval.

Next Steps for Oceanside Reserve

Cape Communities LLC is expected to make additional adjustments and return to the Planning Commission for further review in the coming months. 

Residents and local stakeholders are encouraged to stay engaged as the process unfolds, as the project will continue to influence Rehoboth Beach’s growth and character.

Keep following our blog for updates, join the conversation in the comments, and let your voice be part of the discussion on local development and community planning!

Sources: Delaware Public Media, October 24th Meeting