Nantucket Affordable Housing Status Update

To the editor: Making year-round shelter possible has rallied the Nantucket community. To date, Town Meeting has awarded over $84 million to meet this challenge. While this is a lot of money, we believe this to be a $1.4 billion problem. Though it is fair to ask, is the current strategy working?

The short answer is yes, especially if things go our way at the state and local levels, both of which look optimistic. Our efforts to lower housing costs require an interplay of policy changes at both levels of government.

For commentary on state action, see last month’s review of the Affordable Homes Act. There is commitment to bringing down housing costs on Beacon Hill. In Governor Maura Healey’s words, “For Massachusetts to succeed, every community must embrace the opportunity that new housing affords: For the next generation to invest in their hometown.” Affordable housing is in the highest rung of priorities for the governor, as well as our district’s representation.

At the local level, our efforts are led by Kristie Ferrantella and the Town’s Housing Office who are guided by Nantucket’s Housing Production Plan and Master Plan. Here at Housing Nantucket, we use public and private funds to further the Town’s stated goals on several fronts, including turning Town land into affordable homes for year-rounders.

On February 22, 2024, Ferrantella presented an overview of expenditures (Image 1) within the affordable housing construction pipeline (Image 2) to the Town’s Finance Committee, or FinCom. As referenced above, these projects are the primary use of municipal affordable housing funds. At the presentation’s conclusion, the FinCom gave a unanimous affirmative motion to bond a portion of the Affordable Housing Trust’s (AHT) dedicated annual revenue stream of $6.5 million. Bonding is the process of raising money by issuing debt, or bonds, that are backed by future municipal cash flow. This would create a $45 million lump sum to be invested in new projects. While no new taxes would be introduced, bonding commits the community to a portion of the AHT’s $6.5 million annual expenditure. Voters will make the final decision at Annual Town Meeting this May 7th.

When thinking about measuring progress, a metric Housing Nantucket follows is the percentage of homes in year-round vs. seasonal occupancy. Despite the number of dwelling units on the island increasing overall, the percentage of year-round homes compared to those used seasonally has declined, from 37% in 1990 to 34% in 2021, according to research done by the University of Massachusetts Amherst in 2023. This exacerbates familiar challenges to our island community. We are working to increase the percentage of year-round homes by both reducing those converted from year-round to seasonal, and creating new year-round units.

The Town will seek Request for Proposals (RFPs) to turn pre-existing and newly acquired lots into affordable rental and homeownership opportunities. The timing of these projects is based on a combination of capacity and maintaining protection against unfriendly 40B developments. Unfriendly 40B developments are controversial in that they bypass local zoning regulation. The state’s intention in creating the 40B law was, ironically, to create affordable housing in towns with restrictive zoning. The challenge for Nantucket is that only 25% of the units created are required to have an affordability restriction. Because 34% of year-round occupied homes are occupied today, we can expect a 40B development to worsen the ratio of year-round to seasonal homes. It is a problem unique to seasonal communities. In effect, 40B projects give us greater density alongside a reduced percentage of year-round homes.

In our preferred scenario, the Affordable Homes Act passes which unlocks new tools like a transfer tax and (hopefully) a residency-based deed restriction. As the community continues to support the Town’s housing production plans, the percentage of year-round homes could finally find the balance that has been lacking for so long.

To learn more about what we do at Housing Nantucket or how you can help, email us at info@housingnantucket.org.