New UMass Study Supports Transfer Fee For Affordable Housing On Nantucket, Martha's Vineyard

A new study from the UMass Donahue Institute estimates that a fee on high-value real estate transactions to fund affordable and attainable housing initiatives could generate more than $3.8 million annually on Nantucket and over $10 million a year on Martha’s Vineyard.

“The economic benefits of retaining workers and building or preserving housing are significant and long-term,” the study reads in part. “Our economic impact analysis suggests that using proposed transfer fee revenues to support a balanced portfolio of programs has the potential to strengthen both the housing market and the local economy.”

The exact amount of money generated would depend on the size of the tax, which properties it applies to, and whether real estate transactions on the islands continue to follow historic trends. Most recently, Nantucket has asked for a 0.5 percent transfer fee on transactions over $2 million.

A survey of local businesses on Nantucket and Martha’s Vineyard included in the study found that 61 percent of respondents were unable to fully staff their businesses in 2025, 53 percent reported losing employees due to the cost of housing, and 55 percent reported that potential employees declined employment offers, citing housing concerns. On Nantucket, 58 percent of employers said they helped employees secure housing.

The study was commissioned by the Nantucket Planning and Economic Development Commission and the Martha’s Vineyard Commission. The Nantucket Affordable Housing Trust also contributed funding.

“Supporting housing for essential workers and residents is critical to sustaining seasonal communities and the businesses that depend on them,” said Megan Trudel, Nantucket’s deputy planning director. “The institute’s exceptional analysis highlights the devastating economic impact of the housing crisis on Nantucket and Martha’s Vineyard and clearly demonstrates how a real estate transfer fee could help address it with no negative impact to the real estate market. Thorough research, detailed local business surveys, and analysis of the transfer fee’s success in the Hamptons illustrate the benefits of creating a reliable funding source for year-round and attainable housing.”

Political leaders and housing activists on Nantucket and Martha’s Vineyard have long advocated for a real estate transfer fee. They argue that the transfer fee, which would be used to establish a Housing Bank similar to the Land Bank, would provide a reliable stream of revenue to fund affordable housing projects in communities with particularly high costs of living. The islands, as the two communities in the commonwealth with a Land Bank, have often led the charge at the state level, but every effort to establish legislation legalizing the transfer fee has so far failed.

The study reviews the housing crisis on the islands and the potential impacts of a real-estate transfer fee.

While the study acknowledges that “in urban and national markets there is evidence of modest negative impacts of fees on transaction volume, sale prices, and in turn property tax revenue,” it claims that “there is evidence that real estate transfer fee impacts vary depending on housing market conditions and that in resort markets with limited supply and inelastic demand, like the islands and other seasonal communities, effects on transactions and prices will be minimal.”

An economic impact analysis found that the use of the funds obtained through the transfer fee could bolster the economy in indirect ways, including by creating revenue for construction companies, cutting costs for employers who have to subsidize employee housing, and reducing the need to repeatedly train new employees.

The study also surveys successful transfer fee legislation in other seasonal communities, such as Aspen and the Hamptons.

“The unique dynamics of the islands’ housing market means that these fees may be particularly effective at generating revenue and having positive economic impacts through building and preserving housing for year-round residents,” the report continues. “The evidence presented in this report supports the conclusion that local-option real estate transfer fees would generate meaningful, stable revenue for year-round housing on Martha's Vineyard and Nantucket without materially reducing transaction volume or suppressing prices.”