With Massachusetts in the throes of a housing crisis, many are focused on building more homes.
But not John Abrams. In Martha's Vineyard, where he lives and works, he says the solution is consistent, long-term funding.
A career in building has taught Abrams a lot about housing, and 50 years on the island has given him a front row seat to its soaring unaffordability. Now he and other locals think they’ve identified a way to generate that funding: A regional housing bank funded by a real estate transfer fee.
It's a solution that could work in other communities too, Abrams said. Particularly places with housing challenges that are exacerbated by second-home owners and a seasonal influx of visitors.
Like the Berkshires.
In vacation destinations like Martha's Vineyard, Nantucket and Aspen, Colo., seasonal rentals and people looking to purchase a second— or third or fourth — home have driven up housing costs so high that working- and middle-class housing has disappeared.
The Berkshires, too, is a seasonal destination for vacationers. Its vibrant arts scene, rural countryside, quaint towns and a host of recreational activities — all in close proximity to two major cities — draws both visitors and those looking to purchase another home. With them has come housing challenges which, while not to the same scale, are similar to those facing Martha's Vineyard and other vacation hot spots.
On the Vineyard, a proposed 2 percent transfer fee would apply to houses priced over $1 million.
Proceeds would be funneled to the housing bank, where elected commissioners would distribute the funds with an eye toward increasing housing accessibility and affordability.
That could look like assisting first-time homebuyers with assembling a down payment or incentivizing people to build accessory dwelling units. The housing bank could also use the funding to purchase and convert short-term rentals into deed-restricted, year-round housing, Abrams said.
“For example, if you own a house that you’re renting short term because you need that income, the housing bank might say to you, 'We’ll give you $250,000 cash if you’ll make that permanently year round,'” Abrams said. “For very small money, you get an actual dwelling unit without building.”
In Great Barrington, Select Board Vice Chair Leigh Davis has proposed something similar— a 1 percent real estate transfer fee on sales over $1 million. She told legislators earlier this year that a transfer fee would help locals who work in the town's cafes and hospital afford to live where they work.
In 2004, legislation to create the housing bank funded by a transfer fee took its first wobbling steps toward Beacon Hill. It came close to passing, Abrams said, but pressure from the real estate lobby ultimately killed it.
This year, Abrams and the coalition of islanders behind the proposal tried again.
The transfer fee made it into Healey’s housing bond bill as a statewide measure that towns and cities could choose to opt into, but was stalled in the Legislature. Legislation introduced last year to establish the housing bank has been referred to the Massachusetts House Committee on Steering, Policy and Scheduling.
While both houses are divided on the legislation, it has garnered widespread support throughout all six towns on the island, Abrams said.
Maybe because it addresses what is specific to the Vineyard's housing crisis.
On Martha’s Vineyard, the median sale price jumped from $875,000 to $1.15 million between 2019 and 2020, and kept climbing. In 2022, the median sale price hit $1.52 million. It’s since leveled off at $1.55 million, the Vineyard Gazette reported.
During the summer months, the average vacation home rents for $6,500 a week.
The island’s housing affordability has catapulted into another universe in recent years, but the challenge is over 30 years old, Abrams said.
“There was always what’s known as the island shuffle. If you say that to any islander, they know what that is,” said Kimberly Angell, a steering committee member for the housing bank coalition. “It’s schlepping in the spring into a summer rental — could be a shed, could be a tepee, could be a sleeping bag in the state forest. And then moving back into a year-round rental.”
Like the Berkshires, the Vineyard’s housing crisis has a distinct seasonal character.
Wealthy individuals, families and investors are drawn to the Vineyard for the same things locals treasure about the island: serene beaches, flaming sunsets, laden farmers markets, fresh seafood and centuries of history.
As they’ve purchased second houses on the island, these seasonal residents have introduced elements year-rounders don’t treasure, among them high cost of living, soaring median home prices, and unaffordable seasonal rents.
And they’ve sent many locals off the island — for the summer or for good, Abrams said.
That’s where the transfer fee and the housing bank come in.
“We figure if you’re buying a $2 million second home, you can chip into [local] housing costs,” Abrams said.
One issue second-home owners haven’t introduced, according to Abrams, is housing stock scarcity.
“We need a lot more housing stock all over the country," Abrams said. "We don’t here; What we need [here] is housing accessibility.”
Developing affordable housing won’t provide that accessibility — at least not to everyone, Abrams said. Those projects are usually federally funded, which means that they’re restricted to people making a certain percentage of the area median income. That leaves out people making over $93,410, who still can’t afford a $1.55 million home.
“Right now we probably have 150 units of subsidized housing on the drawing board to be built in the next few years,” Abrams said. “And it won’t make a dent.”
Even if these developments could bridge the gap, building the necessary thousands of units would introduce an environmental crisis on the island, Abrams said.
What the island needs is consistent funding year after year, Abrams said. And for that, the transfer fee is the best mechanism he knows.
“We see the transfer fee as the umbrella that can allow all these different solutions to work,” Abrams said.
The housing bank coalition is already building up for the next legislative session. Abrams said they’re ready to fight again — this time, for a local, not statewide, transfer fee.
If they can pass legislation for the transfer fee funded housing bank in the Vineyard and it functions as they envision, Angellsaid it could become a blueprint for other communities.
“If we can get this passed and get proof of concept, we could take it on the road,” said Angell.
Are you on the frontline of solving your town, county or state's housing challenges? Do you have ideas for how Berkshire County can address its scarcity of affordable homes? Email me at cocallahan@berkshireeagle.com.
