IN THE SHADOWS
An update on Nantucket’s housing crisis.
On paper, the numbers are dismal. The median price of a home on Nantucket is around $3.36 million, according to Fisher Real Estate Nantucket. Assuming you have $720,000 for a down payment, the annual salary necessary to qualify for a mortgage at current loan rates is $630,000. The average salary of a teacher, police officer or firefighter on island: roughly anywhere from about $70,000 to a little over $100,000
In real life, the numbers add up to something more dismal still. Middle school music teacher Nick Hayden has moved nine times in the 11 years he has been here, at one point staying in a cottage with no heat. Hayden spends $30,000 of his $70,000 salary on annual rent plus several thousand more a year on utilities, working two or three side hustles to make ends meet. And he will lose his lease in a year and a half. “I have entered a few lotteries for my own home,” says the single father, “one for Habitat [for Humanity] and two for affordable housing through Housing Nantucket. I made it into the final drawing for two of them but didn’t get picked. Before even entering the lottery, I had to write a letter of how I would have gotten the $10,000 down payment. I was going to sell my car.”
The tales get worse. “We have heard stories in recent years of people living in a shipping container,” says Tucker Holland, Nantucket’s municipal housing director, “third world-ish situations here on an island with a lot of abundance.” There have been people living out of their car or in a garage with nothing but a hot plate.
One family of four with a preschooler and a toddler leased a two-bedroom basement apartment because living at ground level would have cost another $1,000 to $1,500 a month. Mold grew everywhere— “fuzzy like a sweater on the slats of the bed frame,” the wife says. The tiles in the always-wet bathroom were blackened.
Her husband was offered a new job with more pay, but their rental unit was owned by his employer, and if he left his position, they would have lost the apartment, so they stayed put. “I got pretty severely anxious and depressed,” the wife says. “I didn’t take to living underground well. I felt sad for my kids, too. They couldn’t run around outside and have me see them.”
It’s not just the ones struggling to hang on who pay a price. Every economic level ends up directly affected. According to Brian Sullivan, chair of Nantucket’s Affordable Housing Trust, 15 percent of the fire department lives off island because they can’t afford housing here. “They come over and they work a 24-hour shift,” he says. “Then they go home. If there are two emergency situations, the department can’t just call somebody into work. And we can’t call the community next door. The community next door is a boat ride away.”
Other vital services, including medical care, take a hit as well. The housing situation on island makes it “more difficult to recruit,” says Nantucket Cottage Hospital president Amy Lee. The entire state of Massachusetts is suffering a shortage of nurses and radiology and surgical technicians, she reports. But Nantucket is at a particular kind of disadvantage because of the lack of affordable housing. “That is a reality,” she comments.
Some 34 positions also remain unfilled in the school department, about 20 of them teacher positions from kindergarten through high school and the rest teaching assistant and custodian vacancies, says superintendent of schools Elizabeth Hallett. Housing for teachers currently on staff sometimes comes in the form of rentals offered by those who own summer homes and are not here during the school year, she says. “We’re grateful for the 10-month housing,” Hallett remarks, but Nantucket’s teachers need “affordable housing and year-round housing. It’s really hard when you want someone to become part of the community as a teacher, and they come for 10 months but then have to leave when it’s the most beautiful time on the island and there are opportunities to get to know people in a different way.”
Beyond the school department, the town, which also employs police officers, firefighters, airport workers and people in many other municipal positions, is actively recruiting to fill 58 more vacancies. Again, the shortfall is all too easy to understand. A recent survey filled out by more than 350 town employees indicated that as many as 1 in 2 is housing-cost burdened, with 1 in 4 respondents reporting an “extreme” housing cost burden, meaning that more than 50 percent of their gross income goes to keeping a roof over their heads.
A patchwork of organizations has worked to ease the crisis. For instance, Housing Nantucket has created 39 affordable year-round rental units over the last 20 years and 113 homes for ownership. And just in the last four years, the Affordable Housing Trust has facilitated the creation of 35 rental units. “We’re marching on the path toward the 490 affordable units required by the state,” Holland says. “We’re currently at 332.” This will continue to improve because from 2019 to 2022, Nantucket voters appropriated an unprecedented $67 million toward housing at Town Meeting, and this year approved a permanent annual $6.5 million allocation for housing funds. If a vote at Town Meeting next spring allows that yearly money to be bonded (that is, used to borrow larger sums), it can pave the way for a loan of as much as $100 million to create yet more units of attainable year-round housing.
Still, the recent infusion of cash is far from a magic wand. “The problem is that we have a $500 million challenge,” Holland says. It’s going to take that much to build the roughly 2,000 units of year-round housing, both rentals and owned properties, that the island needs to house not just town employees but also shopkeepers and others who make Nantucket a sustainable community. “We’re never going to be able to get there at this pace,” he says.
Fortunately, there are solutions in the offing— although one of them is a maybe. Legislators at the State House are considering passing a law that allows a municipality to levy a transfer fee when a home sells for more than $2 million. For any amount above the first $2 million, a tax of half of 1 percent would go into a housing fund. “Had we had it in place last year,” Holland says, “we would have had another $6 million to make housing attainable for year-rounders. Over time, that could be hundreds of millions more.” Other communities have joined in the clamor for this new law. “Chatham, Brookline, Provincetown, Concord, every town on the Vineyard, they all want something similar,” Holland says. “So there’s some momentum.”
But it’s by no means a done deal. “The chances for passage are 50/50,” says Affordable Housing Trust chair Sullivan. “It has been going on for seven years. Realtor association lobbyists, a strong group, are fighting a fee because they don’t want to see a new tax related to real estate.” Sullivan, himself a Realtor on island, says, “I can no longer profit in this real estate market without this being part of the solution.”
Others on island also want to see a transfer fee for the sale of houses over $2 million. The island’s Advisory Committee of Non-Voting Taxpayers, made up of seasonal residents who often have significant real estate holdings, has written to the Select Board on more than one occasion to voice its support, even though the fee would be paid by them should they go to sell (unlike the 2 percent Land Bank transfer fee, which is paid by the buyer). Says the committee’s immediate past chair, Gary Beller, “Nantucket is really a magical island. But the working folks who are in the normal day-to-day jobs of running businesses—plumbers, carpenters, store owners, restaurateurs—they need to have some subsidy from the town in order to bridge the gap between people who are able to afford housing easily and those who are not.”
Another piece of the affordable housing solution is a done deal. A new nonprofit, the Nantucket Land Trust, was founded this summer for the express purpose of creating housing that is attainable for middle class year-round residents. It works in a few different ways. First, if someone wants to sell their home but make it affordable for those in the year-round community, they can offer it to the trust for less than market value. Such a decision does not have to mean actually giving up any money. If a home is worth, say, $2 million, an IRS-approved “bargain sale” to the nonprofit trust at something along the lines of $1.2 to $1.4 million might confer a tax advantage in the form of a write-off. Sellers can work through the numbers with their tax advisors to see if it would work for them. If it does, the house, now in the trust’s hands, becomes more affordable to the next buyer. For example, if the house and land together now cost $1.4 million, the trust can sell just the home to the new buyer for something along the lines of $800,000 to $900,000. Once the home passes into new hands, it remains available in perpetuity to households not earning more than 240 percent of the annual median income—$136,000 in 2023.
The creation of the new trust is a critical step, Holland says, because “we can’t entirely build our way out of the housing problem by creating new residences. Fifty-three percent of the island is in the hands of conservation organizations, and that does not include town-owned land. Less than 4 percent of the island is developable today.” Because the land doesn’t exist to build all the affordable housing necessary, turning existing housing stock into affordable real estate for year-rounders in perpetuity is a practical way to help fill in the gap.
“Thirty years ago, the proverbial fireman or teacher could come here and afford a house for a couple hundred thousand dollars on Hooper Farm Road,” Holland says. “Now they’re retiring. They want to be closer to the kids and grandkids in North Carolina. When they go to sell, their $200,000 home is now worth $2 million. The new fireman and teacher coming in behind them can’t afford that.” But if the retirees sell their home to the Nantucket Land Trust and take advantage of the tax write-off for making a donation to a nonprofit, the next year-rounder will be able to move in, and Nantucket won’t keep experiencing what Holland calls “a drain of people that the island needs.”
The tax breaks alone won’t cut it; contributions directly to the trust will most definitely be needed, too. “Solving the island’s housing crisis is only going to happen with people’s largesse,” Sullivan says. “We need massive funding” to make it happen.
Holland agrees. “There’s no silver bullet,” he comments. “One single approach isn’t going to be able to do everything. But the Nantucket Land Trust helps fill in a couple of missing pieces that we need in order to move faster to sustain a vibrant community.” Seasonal islander/homeowner Rick Hohlt puts sustaining the community like this: “I’m 75. I want an ambulance driver who can afford to live here so he’ll show up when I have a medical emergency.”
For more information on the newly formed Nantucket Land Trust, a 501(c)3 nonprofit, go to nantucketlandtrust.org.
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