Town Eyes $2.5 Million Purchase Of Properties On Surfside Road And First Way For Affordable Housing

The town is looking to acquire two residential properties on Surfside Road and First Way to add to its affordable housing real estate portfolio.

The Affordable Housing Trust is scheduled to vote on Tuesday on a $1.6 million purchase and sale agreement for 71 Surfside Road. The property includes a three-bedroom, two-bathroom home that was built in 2000 on a .11-acre lot.

"This came to the trust - the sellers and realtor came to us before it went on the market to determine if there was any interest in acquiring it," said Kristie Ferrantella, the town's housing director. "We felt it was a good investment. It's been utilized as a year-round rental under year-round ownership."

The registered owner of 71 Surfside Road is Michael Ayotte, who bought the property back in January 2000.

Ferrantella added that if the purchase and sale agreement is ratified by the Affordable Housing Trust and ultimately approved by the Select Board, the town would likely look to rent the property initially but would ultimately place a deed restriction on it and sell it to an income-qualified buyer. The restriction would limit potential buyers to those making less than 240 percent of Nantucket's area median income, and require year-round occupancy.

Funding for the $1.6 million acquisition would come from a bonding authorization for affordable housing initiatives approved by voters under Article 10 at the 2022 Annual Town Meeting. The property, however, would not be eligible to be included on the town's subsidized housing inventory (SHI) list. 

The other property the town is preparing to acquire is a condominium at 19A First Way for $920,000. That purchase and sale agreement will go before the Select Board on Wednesday for approval. The town already acquired 19B First Way for $950,000 in late 2023. At the time, former town housing director Tucker Holland said it would be used for municipal employees.

In both cases, the town would be acquiring properties with existing homes that would essentially be move-in ready, a factor that is appealing given the challenges the town has encountered in developing vacant land it has acquired for affordable housing in recent years.

"That was really what was appealing about this," Ferrantella said of 71 Surfside Road. "We see this approach as being much quicker. It still has the process of going through an RFP if we sell it, but it’s already built and can be utilized immediately."

Along those lines, the town made another significant housing investment last week when the Select Board approved $444,000 in spending on residential leases in the Richmond Great Point subdivision off Old South Road. The 10 separate leases include two studio apartments, three one-bedroom apartments, four two-bedroom apartments, and one three-bedroom apartment, all located on the new Goosebury Place. The leases will run from Nov. 1, 2024, through Oct. 31, 2025.

"It's part of the overall package we've been negotiating with Richmond in their Goosebury Place II development," Ferrantella said. "The overall development is 55 units of rentals, of which originally only 25 percent were restricted to affordable rentals and 75 percent were market. the affordable housing trust negotiated with Richmond and provided a grant to buy down market rate units, and now 50 percent of the units are restricted to affordable levels between 80 percent and 120 percent of area median income. And in that we negotiated for 10 of the market rate units to be utilized through a master lease to the town to be used for municipal employee housing....The goal of the program is to provide stable year-round housing for our staff, and we've been able to negotiate that the town could have an option to renew up to five years on this master lease."

The leases will be held by the town of Nantucket, while its employees utilizing the units would pay a license fee for rent, along with utilities. The funding for the leases is coming from the town's housing budget, but all of it is expected to be covered by the license fees charged to employees utilizing the apartments. 

"This was a big win," Ferrantella added.