I don't think they've definitively said he lives in Delphi. They've listed that as a possibility along with previously lived there, works or previously worked there, or is familiar with Delphi. So that covers a lot of ground.
Also I don't think they've said the public is definitely not in danger. The sheriff has said he hopes no one in Delphi would live their lives in fear, looking over their shoulders every minute. But to me that's not the same thing. Other LE in the case have said numerous things indicating that, as this individual hasn't yet been apprehended, people need to maintain a state of awareness, especially over their children.
Edited to add: just wanted to bring forward these statements about the potential danger in the community. These span the time period from immediately after the bodies were found up until the three year mark:
"
Be cautious and careful and be parents...know where your children are and what they are doing."
ISP: Delphi Amber Alert wouldn't have helped
Detective Kevin Hammond: "Things have changed for us all...
I am more vigilant with my own children since this happened."
The best of humanity in the worst of times | Carroll County Comet/
Interviewer: "This community has never had a double homicide, Sergeant, from what I understand, and it has been years that Delphi, a community of 3000, has ever had a murder. What do you say to this community tonight because a...killer is on the loose, a double murderer?"
Sgt. Riley: "Well, we tell people, like we've been telling people since this has all started,
you need to be safe out there. We are working 24/7 to try to solve this
horrendous crime."
CNN.com - Transcripts
Three Years Later: Everything we know about the murders of Libby German & Abby Williams in Delphi
“
I can’t say there’s not a threat to the community,” Indiana State Police Sgt. Kim Riley told RTV6 at the time. "We have not caught the person yet. Is the person still in the community? We don’t know.”