Highest home sales in Nantucket could help finance affordable housing

BOSTON – With support from Beacon Hill, Nantucket is looking to collect fees on sales of its most expensive properties to help increase the island’s affordable housing stock and help residents year round.

State Representative Dylan Fernandes, D-Woods Hole and State Senator Julian Cyr, D-Truro, are co-sponsors of a bill to allow the city’s proposal, which would force property sellers to pay an additional 0.5% on the amount of a sale greater than $ 2 million (with some exceptions). The fees would be in place for at least 10 years and the funds would be deposited into the city’s Affordable Housing Trust Fund.

“ Profound unaffordability ”

“Nantucket has experienced a price shortage, and the workers who run the island and keep it vibrant during the winter can’t afford to live there,” Fernandes said. “There is a huge need for affordable housing funding on the island, and without it Nantucket simply will not be a sustainable community.”

The average cost of a home in Nantucket County is around $ 1.8 million, more than 3.5 times the Massachusetts average, according to the Zillow real estate website. There were roughly $ 2 billion in real estate sales on Nantucket in 2020, Fernandes said, and local home values ​​have increased about 7% in the past year.

The city’s proposed fee would likely generate around $ 4 million a year, according to Tucker Holland, the island’s municipal housing manager. According to the bill, a handful of property transfers would be exempt from the surtax, including those within a family, to the government, and to charitable or religious organizations.

Housing crisis before COVID

“Everyone here would agree that Nantucket had experienced a housing crisis all year long before the pandemic hit,” Holland said. “But the pandemic has brought the problem to even more acute attention.”

Holland said the funding would help Nantucket build enough housing to meet, and possibly surpass, the state’s Chapter 40B requirement that 10% of its year-round housing stock be considered affordable. Currently, the city has met only 4% of that requirement, he said, although there are other projects underway.

The money would also be used to start a down payment assistance program that would help residents year round be able to afford home ownership, Holland said. Although locals can afford a mortgage, he said, the down payment can often be too high, even for those earning a good salary.

Hundreds of people come to Nantucket for work every day, he said, including at least two of the city’s firefighters. The region’s median income for a family of four is around $ 116,000, he said.

Housing Nantucket, a local nonprofit, had 85 households on a waiting list to rent a one-bedroom unit earlier this month, Holland said. There were also around 100 households listed as waiting to rent two-bedroom accommodation, he said, and around 60 listed as waiting for three-bedroom accommodation.

Preservation of open spaces at an additional cost

Fernandes and Cyr’s bill is based on legislation that in 1983 created the Nantucket Land Bank, Holland said, a program that supports the preservation of open spaces through a surtax on property buyers. About $ 400 million has been collected for the Land Bank since its inception, he said.

Several other towns and cities have asked the legislature to authorize local real estate transfer fees this session. Provincetown demanded a 0.5% buyer fee to support the city’s capital improvement stabilization fund; Boston has offered fees of up to 1% on buyers and sellers to fund its neighborhood housing trust.

And more than a dozen lawmakers have co-sponsored a bill tabled in the House and Senate last month that would allow similar fees to pass statewide. The bill provides for fees of up to 2% on transactions above the state house’s median sale price, which is around $ 480,000, according to Zillow.

Fernandes said that in addition to waiting for the green light from the state to enact these surcharges, communities like Nantucket facing a housing crisis must continue to find solutions to strengthen access to affordable housing.

“We need Beacon Hill to give us that option so that our local towns can adopt if they want to,” he said. “But it’s also just a tool in the toolbox.”

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