Housing Bank Legislation Fails Again At State House In Boston

Once again, a small transfer fee on high-value real estate transactions intended to fund affordable housing has failed to pass the Massachusetts legislature. Every year, Nantucket’s housing advocates and elected representatives have pushed for the fee. Yet every year, it fails.

“It is certainly disappointing, particularly because Nantucket and other seasonal communities have been asking the state for a tool that directly addresses a housing market that is fundamentally different from most of Massachusetts,” Nantucket housing director Kristie Ferrentella said. “We have made significant progress locally, but we are also confronting a market where the demand for second homes and investment properties continues to put enormous pressure on housing costs.”

Nantucket’s state representatives, state Senator Julian Cyr and representative Thomas Moakley, had pressed for the transfer fee to be included in a comprehensive bond bill passed by the House and Senate, but ultimately, neither version included the measure.

“I'm heartbroken,” Cyr told the Current. “I am deeply disappointed that, once again, we ended formal sessions without getting this done. That is certainly not for lack of effort. Since I was elected to the Senate, I have championed this policy.”

The proposal backed by Cyr and Moakley this cycle would have allowed seasonal communities to implement a fee on real estate transactions to fund a housing bank for affordable housing, which would operate similarly to the Nantucket Land Bank's transfer fee.

For over a decade, Nantucket has requested the option to impose a similar fee. For over a decade, the state has said no.

“I don’t think the answer is to become discouraged. We have to keep advocating for the tools we know we need. Nantucket has been very clear about what is required to address our housing crisis, and a transfer fee is an important part of that conversation,” Ferrentella said. “I don’t want people to interpret this as Nantucket giving up or pressing pause on housing. We are going to keep moving forward. We have projects in the pipeline, we have significant local resources committed, and we will continue to pursue every available funding source.”

Despite overwhelming support for the opt-in transfer fee on the Cape and Islands, the legislature has remained adamantly opposed. Some blame the powerful Massachusetts real estate lobby. The Massachusetts Association of Realtors has lobbied against the bill repeatedly. But the local Nantucket Association of Real Estate Brokers (NAREB) actually supports the transfer fee.

“They don’t speak for us,” said former NAREB president Penny Dey, who has traveled to Beacon Hill several times to advocate for the transfer fee. She assailed the Massachusetts Association of Realtors for its position, which she said was grounded in inaccurate arguments and a desire to convince its membership that it is doing important work.

Nantucket’s housing crisis remains one of the most acute in the entire country. Reports often cite that Nantucket has one of the highest median home values in the United States, and analysis after analysis shows that, despite the concerted effort of local advocates, housing remains out of reach for many islanders.

“What makes this especially painful is the urgency of the situation. Islanders can't afford to wait another two years for the legislature,” Cyr said. “We cannot abandon the fight for a dedicated revenue source for year-round housing. Without a significant infusion of resources, there is no way Nantucket will be able to solve this problem.”

Ferrentella agreed.

“The cost of creating housing on Nantucket is extraordinarily high, and the cost of land is one of the biggest barriers. At the same time, the people we are trying to house are competing in the same market as buyers with significantly greater purchasing power,” she said. “We need to build more housing, but we also need to preserve the housing we already have and protect it from being lost to the seasonal or second-home market. A transfer fee would give us another tool to do both.”

The transfer fee model has been proven to be successful. The Nantucket Land Bank has used it to great effect, preserving huge swaths of Nantucket as conservation land. In recent years, the Land Bank has even begun to indirectly assist with the creation of affordable housing.

There was, again, no vote on the transfer fee this year, meaning that many Senators have still not been forced to pick a side on the proposal.

“The drawback to [a vote] is that it often will kill the issue. Taking a vote that will fail often will settle the issue, and then we won't return to it,” Cyr said. “Taking a heroic but failing stand on a forced roll call vote would, in reality, harm our future efforts to get this done.”

The transfer fee also has the support of Governor Maura Healey, and a recent study from the UMass Donahue Institute found that a transfer fee would not have adverse impacts on Nantucket’s real estate market.

“Though it’s not the end result we wanted, there are reasons to be optimistic about the future beyond the usual concept that many laws take years to make it over the finish line,” Moakley said. “The Nantucket home rule petition was favorably reported out by the House Revenue Committee; the UMass Donahue Institute dropped an excellent report that will help to combat the idea that a transfer fee will drive up home prices; and more and more towns across the Commonwealth are passing similar home rule petitions, giving Sen. Cyr and myself more allies to push this with in the legislature.”

So far, however, none of this has been enough to secure passage at the state legislature. Speaking with the Current at a town hall earlier this summer and again after the transfer fee failed, Cyr suggested that it might be time for a change of approach.

“I think all options need to be on the table,” he said. “I think we need to think creatively about our approach to the transfer fee, what else we can approve, and what to do.”