Loss of rental stock will have a domino effect

0

In the heat of an upwardly trending and active real estate market, Martha’s Vineyard is seeing its already critically tight rental housing stocks dwindle as some of the lowest-end housing sells off to vacationers, homeowners, and investors. To date this year, 182 homes under $600,000 changed hands in 2015. These homes represented lots of different types of housing options, including both year-round and winter rental homes that many families in our Vineyard community were dependent upon.

The sale of homes in this section of the real estate inventory has a profound and dramatic impact on our community. It may not be immediately visible to most of us, but the displacement of the people who lived in these former rental houses has consequences that include the struggle of former tenants to find replacement housing, increased homelessness and for some, a departure from the Vineyard.

I see it as domino effect. The lack of housing impacts many segments of the Vineyard community, which includes our good workforce, and that affects us all.

At last count there were between 250 and 300 families on the revolving rental wait list held by the Dukes County Regional Housing Authority (DCRHA). There are over 400 families on the DCRHA Homebuyer Clearing House, and many of these families are showing up at less than 50 percent of the Area Median Income (AMI), and in truth, many may not even be able to afford the cost of the low-end home buying options.

David Vigneault, executive director of the Dukes County Regional Housing Authority, told me that he sees things getting worse. “There are lower numbers of year-round housing options at all price levels,” he told me; “the resulting impact is that there are more people on all of our waiting lists.”

Other entities, which include the Morgan Woods rental complex in Edgartown and Island Elderly Housing, are also seeing their waitlist numbers rising. At Morgan Woods, as of April the current number of families on the rental waitlist was over 200. Unable to get in touch with the agency, I can only assume that number has grown. For the Island’s older population, there are few good options, and as the baby boomer generation matures, the number of older folks seeking stable rentals will grow.

Looking at Nantucket’s recent embrace of a radical zoning maneuver to allow for affordable housing (Dec. 3, “Nantucket voters approve groundbreaking zoning bylaws”) allowed me to consider how alike and yet different we are from our sister island. Some would say that their willingness to bend zoning radically to embrace this large development is a plan that could also work for the Vineyard, but I think that between our larger-acreage zoning and the Martha’s Vineyard Commission, there is little incentive for any developer. There has to be a profit motive to make it work. In the dusty trail of derailed Island development proposals, we still remember the Kupersmith rental complex proposed for the Southern Woodlands in Oak Bluffs, and of course Cozy Hearth, a private initiative by a businessman to provide homes for his employees in Edgartown.

What can we do? Something needs to change. Somehow we need to wake up and collectively take some actions to protect and grow our rental stock. Our attitudes about what we hold important have to change. We can modify zoning, incentivize smart-growth development, encourage tiny or smaller housing, allow accessory apartments, create tent sites, but we need to do all of this now, in a harmonic effort to create more stability and stem the erosion of our community.

Close to 15 years ago I mentioned to a few real estate broker friends that we should ask our low-end home sellers to offer homes exclusively to Islanders first for a limited period of time to keep the low-end homes from falling out of our rental inventory. I branded the imaginary program “Islanders First” as a radical but not impossible step toward stability. Their reaction was less than favorable. Excuses included “too restrictive to sellers,” or “unfair,” but in hindsight it now seems like a wonderful idea lost to the past. This year, I half-jokingly suggested to a fellow board member at the Island Housing Trust (IHT) that we start a real estate investment trust (REIT) and buy up lower-end homes for year-round rentals. In looking at the sales out there, it seems that there is competition from certain buyers who are already doing exactly this, but for seasonal rental profits instead of year-round homes.

Tom Seeman, owner of Island Source, is implementing a program in which he asks clients to agree to a 1 percent surcharge on goods he sells, which he matches and then donates to housing. This is a great idea. I am donating 1 percent of my office and personal rental income to affordable housing. The owners of rental properties could add a $100 rental housing fee on every lease. We don’t need to wait until the government places a 6 percent room tax on rentals to do something. I propose rental property owners all voluntarily donate 1 percent of profits today while we can still write it off as a tax deduction to help subsidize the rental market in whatever way we can.

Other ideas are out there. We are all capable of doing a mitzvah, or good deed, for our community, and the larger the number who do it, the greater the impact. There is one thing I am certain of: The longer it takes for us to act, the less impact our actions will have, and the more dramatic those eventual actions will need to be.

Jim Feiner

Principal, Feiner Real Estate

Chairman, Chilmark Housing Committee

Board member, IHT