After years of unsuccessful bids to secure passage of the so-called Housing Bank legislation at the State House in Boston, Nantucket’s housing advocates and town leaders are now turning to island taxpayers for a stable, long-term funding source for affordable housing initiatives.
Voters will be asked in May to approve a permanent tax override of $6.5 million to support the work of the town’s Affordable Housing Trust to create new affordable homeownership and rental units on the island. The concept was presented this week by Nantucket’s director of municipal finance, Brian Turbitt, and town manager Libby Gibson. The approach was developed as an alternative to the citizen petition put forward by attorney Arthur Reade which would divert two-thirds of Nantucket’s room occupancy tax - approximately $8.5 million annually given current room occupancy tax revenues - and allocate the funds for affordable housing.
Turbitt and Gibson told the Affordable Housing Trust this week that utilizing a percentage of the room occupancy tax revenue for affordable housing could potentially be a volatile funding source, rather than a stable one. Their proposal would seek approval from voters at both Town Meeting and on the ballot for a permanent operating override of $6.5 million each year, and the delta between that number and the $8.5 million that could have potentially come from Reade’s citizen petition would be made up with other general fund revenue.
With that kind of dedicated annual revenue, the Affordable Housing Trust could leverage the override to borrow as much as $50 million to pursue its housing initiatives.
“This would provide a stable platform from the tax base of funding revenue to the Affordable Housing Trust as we continue to work through the myriad issues of affordable housing,” Turbitt said. “The trust needs some stability in order to pursue its long-term goals.”
The proposal for a permanent, dedicated revenue stream for affordable housing initiatives comes less than a year after voters approved more than $40 million in spending for island housing initiatives during the May 2022 Annual Town Meeting. That represented the largest sum ever allocated for affordable housing at a single Town Meeting on Nantucket by a wide margin.
But the scale of the problem has only deepened since then amid another huge year in the Nantucket real estate market, with prices continuing to escalate. The average home sale price in 2022 eclipsed $4 million for the first time ever. The affordable housing crisis, according to municipal housing director Tucker Holland, is a “half-a-billion-dollar problem.”
Accordingly, the members of the Affordable Housing Trust not only endorsed the operating override proposal, but even discussed whether they should be asking for more, and whether there was the possibility voters would endorse both the override and the citizen petition to allocate a portion of the room occupancy tax revenue.
“I want a giant firehose to attack this issue,” Affordable Housing Trust chair Brian Sullivan said. “This is an incredibly exciting spot that we’re in, that we’re having a conversation for an override of $6.5 million that is going to potentially bond. Do I think it’s a solution number? No, I don’t. I know our problem is way greater than that. Is this is step in the right direction? This is way better than when we went looking for $600,000 five years ago.”
While there was unbridled enthusiasm for the possibility of a dedicated revenue strem for affordable housing, there were also some members of the Affordable Housing Trust and the Select Board who raised some concerns about the public’s appetite for additional spending given the economic headwinds and the public’s perception of progress made (or not made) on housing initiatives.
“We all need to get on our horses and start spreading the word and getting the facts out there,” said David Iverson, the Nantucket Planning & Economic Development Commission’s appointee to the Affordable Housing Trust. “I think we have an uphill climb at Town Meeting. I think there’s going to be a lot of very uncomfortable questions asked, just people misunderstanding the process and wondering why there’s not more heads in beds.”
During Wednesday night’s Select Board meeting, Matt Fee also questioned whether voters had the appetite for further override spending, and urged the Trust to pursue more rental initiatives rather than homeownership.
“We need to fund housing, but one of my concerns is are we prioritizing properly from the town’s perspective?” Fee asked. “It’s great to do home ownership, etc. etc., and that’s great, but if we end up funding homeownership and we don't have employees to run the town, we haven’t helped ourselves. I think rental housing, until we have a substantial supply, could be a priority. At some point there’s going to be some pushback on these overrides, and I would hate it to be pushback against housing.”