Nantucket's long-sought housing bank bill may finally be within reach.
Massachusetts Governor Maura Healey on Wednesday proposed an ambitious $4.12 billion housing plan that includes a so-called local option transfer fee that would tax high-end real estate sales to provide funding for affordable housing initiatives.
It is a concept first floated by Nantucket more than a decade ago but had stalled at the State House in Boston in the face of intense opposition from the powerful Massachusetts Association of Realtors. But just as Nantucket's housing crisis has grown worse, so too have the housing woes of other communities in the state, prompting a growing number of municipalities to seek similar legislation.
On Wednesday, Gov. Healey's administration acknowledged those appeals to allow cities and towns to impose such a transfer fee in its "Affordable Homes Act." Nantucket's housing advocates and state representatives joined a chorus of praise for the ambitious legislation.
"This is a long sought-after tool from Nantucket, and now many other communities, and we're very grateful to the administration for having included this in the bond bill," said Nantucket's municipal housing director Tucker Holland. "It's not a done deal. It still needs to go through the legislative process. But as Sen. (Julian) Cyr said, this is a game changer. Stay tuned. There's more work to do on our part. But this is an important milestone."
Healey's bill would allow municipalities and regional affordable housing commissions to adopt a transfer fee of 0.5 percent up to 2.0 percent, paid by the seller of real estate, on the portion of sale proceeds over $1 million or the county median home sales price, whichever is greater. The fee would be required to be used for affordable housing development.
"With 20-plus years of experience as a realtor on Nantucket, I have seen first-hand the staggering impacts of the housing crisis on the Island,” said Brian Sullivan, a longtime Nantucket real estate broker and board member of Nantucket Affordable Housing Trust who has lobbied lawmakers at the State House in Boston to enact the housing bank legislation. “As a seasonal community, we need unique and innovative tools to sustain our year-round community, and a transfer fee gives us those tools."
Healey's $4 billion bill would support the creation of over 40,000 homes to benefit low and median-income families in Massachusetts while also providing funding to preserve, rehabilitate, improve, or support more than 27,000 existing housing units. If approved, the Affordable Homes Act would be the largest housing investment in the history of Massachusetts.
“These proposed investments are designed to impact those who need support the most,” the administration stated in a press release. “More than 80 percent of the bond authorizations in the bill will benefit low-income households, with up to 50 percent of proposed authorizations benefiting Extremely Low-Income (ELI) households or residents with disabilities.”
The legislation is being proposed at a time when the supply of housing in Massachusetts is struggling to keep up with the demand. The state has determined that between 2020 and 2030 it will need to create at least 200,000 new homes to accommodate growth and “achieve a healthy vacancy rate” as only 1.6 percent of housing units in Massachusetts are currently available for sale or rent.
“On Cape Cod, Martha’s Vineyard, and Nantucket, the housing crisis has caused our region to become profoundly unaffordable,” said state Sen. Julian Cyr (D-Truro). “The Healey-Driscoll Administration’s Affordable Homes Act is a huge step forward in our long-sought efforts to implement a local option transfer fee on luxury real estate, in addition to other creative initiatives such as seasonal designations for communities impacted by tourism and Accessory Dwelling Unit permitting by right.”
Nantucket’s quest for the housing bank legislation has been ongoing for more than a decade, and the concept has caught on with other communities - on the Vineyard, on Cape Cod, and beyond - that have joined the fight. The island has been seeking what Holland calls a modest request: a .5 percent transfer tax on real estate sales above $2 million to fund affordable housing initiatives. Had it been in place last year, it would have generated more than $6 million.
A breakdown of the capital authorizations in the bill includes:
- $1.6 billion for Public Housing Capital.
- $800 million for Affordable Housing Trust Fund
- $425 million for Housing Stabilization and Investment Fund
- $275 million for Sustainable and Green Housing Initiatives
- $200 million for Housing Innovations Fund
- $175 million for HousingWorks Infrastructure Program
- $100 million for Mixed-Income Housing Fund
- $100 million for CommonWealth Builder
- $70 million for Facilities Consolidation Fund
- $60 million for the Massachusetts Rehabilitation Commission Home Modification Program
- $55 million for Community-Based Housing
- $50 million for the Momentum Fund
- $50 million for Neighborhood Stabilization
- $50 million for Early Education and Out of School Time Grants
- $35 million for HousingWorks Housing Choice Grant Program
- $30 million for State Surplus Property Disposition
- $25 million for HousingWorks Community Planning Grants
- $20 million for HousingWorks Smart Growth/40R program.
For details and a rundown on each of these programs above and explanations of the purposes they serve, click here.