Housing on M.V. 101: A primer on our crisis

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We all are painfully aware we have a humongous housing crisis on Martha’s Vineyard. (“Webster’s” defines humongous as “extremely large.”) What causes this crisis, and what can we do to solve it?

Nary a week passes when I don’t receive a few calls from a friend, a child of a friend, a friend of a friend, or even a total stranger recommended by someone. More often than not, these reach-outs are seemingly born from my real estate activities and advocacy for myriad Vineyard housing pathways. To date, these conversations have included a fair representation of the Island’s socioeconomic spectrum — an Islander wisely planning ahead of a known lease expiration, another in need of a bigger house for an expanding family, most in immediate crisis to find year-round housing due to a myriad of reasons. Interesting to note, each is employed year-round, and most face the reality that finding housing they can afford precludes their continued living on the Vineyard.

Unless effective progress is made to address the crisis, our quality of life on the Vineyard will, very soon, become altered. No one needs a crystal ball to foretell, in just a few years, so many of the people who work on the Vineyard will arrive by boat in the morning and leave by boat in the evening. In sum, the myriad of good people who make our community work cannot afford or find housing on our Island. Is there anyone out there who thinks housing on Martha’s Vineyard is available and affordable? Of course not, because we have a humongous crisis.

So many of our friends, neighbors, and town and Vineyard officials have been doing yeoman’s work to combat this crisis. It is meaningful, appreciated, and helpful, but just nowhere near enough to provide significant relief for our crisis.

We are not unique, as many communities from Boston to San Francisco have a real housing problem. The critical difference is in most other communities, people can reside in less expensive outlying towns and readily commute to work. We are an Island, so that does not work very well for us. OK, so we all know we have a real problem, but just what really is affordable housing, why do we have this housing crisis, and what can we do about it?

 

Definition of affordable housing

First, contrary to so much you hear and read, there exists no universal definition of affordable housing. Some folks will say affordable housing costs should be based upon AMI (annual median income). Affordability is, they say, 70 percent or 80 percent or 100 percent, or even 120 percent, of AMI. The generally accepted factor is folks can pay 30 percent of that AMI, or whatever their gross annual income actually is, for housing.

We know the single person making $30,000 cannot afford Vineyard housing without some special discounted housing availability. Thus, they require affordable housing. What about the family of four with two incomes totaling $125,000? Guess what? This family can neither find nor afford appropriate Vineyard housing. Accordingly, they need affordable housing. Who are these people who cannot locate or afford housing? They are the town employee or the reporter for the newspaper or the policeman or the teacher or the nurse or doctor at the hospital or the clerk in the store, the server or chef in the restaurant, etc., etc., etc. We need housing for working people, the folks we rely upon to keep the wheels of our community going every day. The only universal definition of affordable housing is housing that home seekers across all income groups can afford. Simple, but oh so profoundly true.

 

Cause of our housing crisis

The real cause of our housing crisis is surprisingly simple. It is supply and demand. The MVC and six-town Vineyard study resulting in the recent Martha’s Vineyard Housing Production Plan 2018-2022 tells us, “Sixty-two percent of all housing units on Martha’s Vineyard are for seasonal or vacation use.” That means, of all the existing housing supply on the Vineyard, only 38 percent is available for year-round housing for the folks who work and live on our Island year-round. Is it any surprise we have a crisis because the 38 percent supply of housing is much lower than the demand? Fundamental economics tell us when available supply is low and demand is high, prices go up. Think of the children’s game of musical chairs. When you take away a chair, someone loses out.

 

Elements of our housing crisis

We need affordable housing, workforce housing, senior housing, empty-nester housing, and so much more, but these are only smaller parts of our housing crisis. What we desperately need is so very much more year-round housing.

 

Solution to our housing crisis

The solution is quite simple, at least conceptually. If we can substantially increase that 38 percent of available year-round housing supply while significantly diminishing the 62 percent number, housing that people can afford will become increasingly available. Our primary goal must be to dramatically increase the supply of reasonably priced year-round housing. Many will say the solution is not so simple. It is that simple. It is the manner and speed that we elect to affect an increase in this year-round supply that is complicated.

 

How can we solve our housing supply problem?

If every town and the MVC can cause new housing to have a permanent restriction requiring the housing will always remain among our year-round housing stock, we will be well on our way. If every developer of housing, even the single-home spec builder, will do the same, we can begin to really increase our year-round housing supply and effectively diminish our crisis. And the real catalyst will be if Vineyarders embrace the newly proposed Housing Bank at forthcoming town meetings, we will finally have an ongoing, reliable, and practical source of funds to really diminish our Vineyard housing crisis.

 

Robert Sawyer is the author of “Massachusetts Real Estate Principles, Practices and Law,” a real estate instructor, consultant, developer, and former county commissioner.

21 COMMENTS

  1. You correctly state that the cause of the “housing crisis” is simple – 62% of housing is for seasonal and vacation use. That’s because the Vineyard has a seasonal economy – it’s called tourism. It is the attempt by too many business owners and people who want to live and work on the Island year round – despite the lack of a year round economy – that has led to a “housing crisis”.

    There simply is no crisis – if a person can’t afford to pay whatever the market rates are for housing then they should leave. If a business owner can’t run a business by paying whatever wages are necessary for their employees to live on MV then they should close.

    Any attempts to build housing so people can “afford” to live here are misguided. There is no right to live on Martha’s Vineyard or anywhere else in the world. If you can find a way to make it work financially – great. If not – there are lots of other great places to live in the world.

    • Unbelievable rebuttal to a well laid out and thoughtful op-ed. Vineyard Mack do kids go to school only during the tourist season? Do people visit the hospital only during summer? Should laws only be enforced by police in the summer? Do you think the multi-million dollar homes for wealthy summer residents are only being constructed three months out of the year? I’ll agree this Islands economy is mainly generated in the summer, however there is still a year round economy crucial to this island and the community that lives here. We don’t put a closed sign on the vineyard and cease to exist for the remainder of the year after summer. Tradesmen, cops, teachers, nurses and store clerks simply can not afford to buy a home on the island, and I think telling them all they need to do is make more money or move off island is absurd. We need more options and we need them now.

      • What god given right is there to ‘buy’ a home? Lots of people are renters. Every cop teacher or nurse that I know here owns a home. Tradesmen here are raking in the cash, and own homes here (and vacation homes) thanks to the wealthy summer residents willing to overpay for average or mediocre work. I’d like to live in Palm Beach but I cant afford it. Do the residents there owe me anything? Do those who live here owe YOU anything? Did your parents just decide they like it here and moved here? Or were your ancestors long time natives that laughed all the way to the bank when the rich folks from CT were willing to pay them a huge premium for the land your relatives got for cheap? The wages here are excessive. That is why the morning boats are full of willing hard workers who make the commute to make more money than they could on the mainland. They don’t ‘deserve’ to live here. Nor does anyone else. In the ‘real world’ people commute 2-4 hours a day to higher paying jurisdictions for the wages and choose to live in a cheaper place. People drive 2 hours in each direction from cheap places in NY state or PA to get the big $$ from NYC. I don’t see the them complaining about the ‘right’ to live in that pricey zip code. A relaxing 45 minute boat ride each way is preferable to a 2 hour drive.
        If you really think people ‘deserve’ to live here, how about advocating for a trailer park, aka ‘manufactured homes’ community. But its too snobby for the big mouths here. Maybe some ‘youths’ should work 2 jobs and save money, instead of going to the bars at night, and stop buying a fifty thousand dollar 4×4. Then you have a down payment for a house. Theres plenty of MOTIVATED people on this island. I can name quite a few who started with a lawn mower and a pickup truck and became millionaires. Do you expect them to subsidize you?

        • Ok first of all I’m not calling for a hand out from the wealthy seasonal residents who clearly have the “right” to live on the island and “deserve” to be here unlike middle and lower class people according to you. I think affordable housing complexes would be great for the island, and guess what they would not require public funds to build. They do however get railroaded all the time because wealthy residents or islanders who bought homes when it was actually feasible are concerned about traffic or noise. classic NIMBYism. You clearly need to get out more because I know plenty of teachers, cops, town employees, and tradesmen who do not own homes but instead pay high rent which makes saving up for a down payment difficult. And yes general contractors and company owners make a lot of money, but this certainly doesn’t trickle down to their workers. I get it this is America, cash is king and capitalism rules, you are right no one has a “right” to live here. There is however a need for housing on this island that is being ignored, and your short and simple argument of no one “deserves” to live here does little to address the complex and urgent issue of housing on this island.

        • not new here– I don’t see where anyone is saying people have the “right” to be here, or “deserve” to be here– what kind of rhetoric is that ?
          Radical right , I think– watch much fox news ?
          But, while no one is saying anything about people deserving to live here except people who somehow think quoting that word, will give their argument some weight. Let me tell you — people do have a right to live anywhere they want– they don’t “deserve” ( nor do they think that ) to live anywhere they want. What “they” have is the constitutionally protected right to live anywhere they want. If they can make it work, good, if not, they have the constitutionally protected right to move somewhere else.
          your comment introducing words like “deserve” or implying that somehow working poor people are demanding something from hard working people who have it, are dog whistles to the right wing racist .

          • Dondondon12 do think for once you could make a comment without using your left wing playbook and tossing ‘right wing’ or ‘racist’ or ‘fox news’ out there when you disagree with a post? Stick to the topic for once. Nobody deserves to live here. Nobody has a right to expect those of us who worked hard to achieve our goals to give them a free pass. Anyone who chooses has a right to try and make it work. If not, there’s plenty of places in this country to live.

      • You completely missed the point – no one has a “right” to live on MV. It is the very attempt to have a year round economy that is the problem. You cannot build houses for all the people who want to live here but can’t pay the rent. It’s the same as a big city – if you need to commute to Manhattan for a job you take the trains and buses – same as Boston, DC, Philadelphia etc. If workers need to come over by the ferries every day then that’s called a commute.

  2. Vineyard Mack you have stated the problem to a T. If you can’t afford to live here why are you here? The attitude that you are entitled to live here is a Liberal lie. Owners of businesses that gouge the public because they can are a major part of the problem. This attitude that it’s not bad because it only affects the Tourists Will be the downfall of the Island. When the Tourists stop coming the golden eggs will be gone ,then the only thing left to decide will be who will be the last ones job to turn out the light

  3. Permanently restrict all new housing, and seize more tax? Rubbish. Our towns should put all new revenue derived from short-term rentals toward lowering property taxes, while rejecting any chatter about “permanent restrictions” on new housing. The current reality is: if one wants to work on Martha’s Vineyard but can’t afford the cost of real estate here, there’s plenty of much less expensive housing on the mainland not far from the boat. I have many friends – including ones that grew up here – who take the ferry to work from their very affordable homes in Falmouth, Mashpee etc. And it’s a lot more pleasant commute than, say, that of my two sons off-island, who both fight urban traffic a couple hours every day getting back and forth to work… because, like millions of others, they simply can’t afford to reside in the affluent towns where they’re employed. They ain’t whining about it though. They accept reality.

  4. Edgyouth, it is not the wealthy that are stopping affordable housing it is the Selectmen and the MV Commission and all forms of regulation including environmental, sewage, plovers, erosion and all the rest of it. There is plenty of room on MV. People in Aspen and Vail and other tourist destinations solve this problem. Yes everyone agrees it is very expensive to live here but if the invisible hand in the marketplace was allowed to function the problem would be solved. The wealthy will either stay and get their food and medicine brought to them or they will leave. No one else needs to be here.

  5. I am very sympathetic to the plight of the people who work on the Island to find affordable housing. I think that all voices should heard and new ideas taken seriously. However, the cause of the “crisis” is the fact that the Vineyard has become known globally as a beautiful and unique vacation destination. This brings money that supports jobs and bids up housing. Once upon a time land was not expensive but there were few jobs. Now that there are jobs the land is not cheap. We should explore ways to increase the supply of year round housing but I do not believe that it is simple or fully solvable. I fear that for every new unit of affodable housing, we will get another unit of demand for affordable housing. Further placing restrictions on the use of new housing will discourage supply rather than increase it. As many commenters have said, some people will just have to find housing elsewhere and many workers will have to commute.

  6. OK instead of trying to address people individually I’ll just say this. To people who think ignoring the housing issue (I will not call it a crisis) on the island and hoping that like water it will find it’s level I say that you are simply sticking your head in the mud. Over the past 30 years inaction by local government and commissions has brought us to where we are now, and if you think it will get any time soon or in the future you are nuts. It’s only going to get worse. If its this bad now what will it look like in 20 years? And lastly I think the spirit of this island will be turning in it’s grave when Martha’s Vineyard is nothing more than a seasonal resort for those that can afford it and is employed by people who travel here just to earn wages and then return home to the mainland via boat at night. That’s a very sad thought, and I’d like to think that those that hold the vineyard as a special place in their heart and consider this place special can realize that.

  7. This article is kinda sorta correct but misleading. AMI goes out the window with tourist destinations.
    More importantly the real “cause” of this “crisis” is artificially surpressed interest rates.
    Low interest rates mean banks want to make more money by providing larger loans, which they can because interest payments are lower. This means because banks gaurantee or pre qualify a larger amount for a buyer, home prices reflect that gaurantee. We are exponentially affected because we have very sought after property. This suppression hurts buyers even more because they cannot deduct as much mortgage interest from their taxes, like they would with a high rate loan, and instead are battling a huge principal amount with a higher personal income tax rate .
    This is nearly the same reason colleges are so expensive.
    But no one wants to hear this… especially if they want a grant/tax payer funded salary to be an affordable housing staff person.

  8. There is so much misinformation out there. Most states charge a short term rental tax. MA was in the minority for that. It will not change a tourist’s plans to visit. MV is special, is known internationally, and there is only only one MV. The use of the funds in a Housing Bank does not mean a building boom for affordable and deed restricted year round housing. It may mean more density in certain areas, the redevelopment of properties from a single use to multi us, a single home into a duplex or triplex. Some new building will occur too. Trying to create a diverse economic base is the goal. Anyone that buys a plane ticket or has rented a car see lots of add-on taxes. When looking for revenue, that does not hurt the year round residents, the short term rental tax makes an enormous amount of sense. The Housing Bank is asking for an allocation before those funds are absorbed by the towns. Still the towns will have more money and can use the new funds to reduce taxes, improve or expand infrastructure, or add to the general fund. There will be a state level registration. If we were smart as an island, we would centralize that at the County level. Let all towns coordinate. I know, an insane idea we would all work together for a common good. Forming task forces is crazy as well. MA Department of Revenue has put up a FAQ. All the selectmen have to do, is read it! https://www.mass.gov/info-details/short-term-rentals-frequently-asked-questions

    Part of being human is having compassion. We are all equal in the sense we are flesh and blood. Beyond that, no we are not equal. We have different abilities. That should be embraced and not frowned upon. Housing is good for mental health. The virtuous circle. A person with housing, whether rental or ownership, that is year round, has better mental health, better physical health (misses less work), if married or living with someone, less household conflict, if they have children, the children have less sickness and do better in school. All for having a roof over their head for a reasonable amount of money.

    We as a society have many strata. None is more important or less important then any other. In the famous words of Rodney King, “Can’t we all just get along?” Your neighbor does not want a hand out, we are proud and hardworking on this island. You neighbor may need a hand up. That is the reason for the Housing Bank! Stop the insanity, help make a difference. Vote for the Housing Bank at the annual Town meetings.

  9. The year round large Brazilian community here has seemed to figure out how to find affordable housing. All new arrivals, and none asking for something to be provided to them. Money is cheap, interest rates are low. Prices are higher here but so are the wages. The wages are exponentially higher, and there is no shortage of work for skilled and unskilled labor. If employers can’t find workers, they provide housing alternatives. And when I built my home, the interest rate for an adjustable rate mortgage was 13.75% and fixed rate was 18%. I was thrilled to eventually be able to refinance at 9.75% and eventually paid it off. Interest rates today are half of what many of us paid. My friends who worked hard, had 2 or 3 jobs, rented rooms to strangers for the summer were all rewarded eventually with home ownership. But lets not forget the disaster of the economic meltdown/financial crisis that was caused by forcing banks to lend money to those who could not be expected to pay back the loans. It created a real estate boom, with climbing prices, because there were more ‘buyers’ (thanks to liars loans that the government forced upon the banks). And the crooks on wall street ‘monetized’ these loans into worthless securities that caused the meltdown. But this is the result of government intervention in a market. We should learn from past mistakes. Why affordable housing proponents so afraid of manufactured housing? Things have come a long way from the ‘trailer park’ negative connotation. Its a simple fix to this ‘problem’. Not everyone ‘deserves’ a 3000 square foot house on a 1/2 acre.

    • So your saying that not following the laws of the United States over crowding houses, taking advantage of: free health care, free child care, employment centers mascarading as churches, driving unlicensed, running businesses that do not pay insurance or taxes is something to be applauded. Yes the Brazilian Community Leaders have figured out how to manipulate their people and our laws to their advantage. Have you ever been to a Brazilian Housing, the average Brazilian is paying inflated rents to live in over crowding unhealthy housing while the island towns elected and paid officials turn a blind eye, or directly profit. Learn about realities of living on Martha’s Vineyard before using national figures then you can lecture me on the housing crisis.

      • Read my post. I said the Brazilians figured it out with respect to affordable housing and apparently they have. If as you indicate every Brazilian is breaking the law then its up to the elected officials to enforce the law and if Islanders who are landlords ignore the law then THEY are creating the problem, by removing otherwise available rental housing stock from inventory. If as you indicate they are paying inflated rents, that’s an unfortunate supply/demand situation of the market that will only correct itself if the laws are enforced and landlords play by the rules. (good luck with that) And don’t lecture ME on the housing crisis. I rented, saved, bought without any handouts while living here on Marthas Vineyard *while hearing about the same “crisis” for all my life*.

    • I’ve some history in banking. Nobody forced banks to lend money to those who could not be expected to pay back the loans. CRA did not require making loans, it said banks could not reject for non-financial reasons and required banks to track rejections; because I’ve a friend/co-worker who managed the CRA application, that’s how I know. But some banks were greedy. They took advantage of the graces offered by the “American Dream Downpayment Act” and set unreasonable goals for lending officers. The bank got its application fees, then sold the mortgage on the secondary market, dumping the risk and losses on Fannie Mae and Mac.

      Enough with banks forced to lend. Each bank decides how to focus their business.

  10. There is a lot of confusion and lack of knowledge regarding the short term rental tax. It is an onerous tax that will drive away tourists and greatly reduce the dollars spent at Island restaurants, shops etc.. The Vineyard is difficult and expensive to visit – visitors do not have unlimited budgets. Beware of killing the golden goose.

    Here are the facts:
    The STATE passed a 5.7% tax on all short term rentals. ALL this money goes to the STATE.
    The STATE has IMPOSED an additional tax of up to 6% depending on whether a town had an existing hotel tax.
    This additional tax was not voted on by any of the taxpayers of any town. The STATE has given the Island towns the right to add another 2.75% for Cape and Island water protection. I assume this will be voted on later this spring.
    At this time the tax burden for short term rentals is:
    Oak Bluffs – 11.7%
    Vineyard Haven – 11.7%
    Edgartown – 9.7%
    Chilmark – 9.7%
    West Tisbury 5.7% No existing hotel tax.

    At the Town Meetings the taxpayers of each town should vote to repeal the local portion of this misguided tax or dedicate 100% of the revenue to reducing property taxes for year round owners. It’s time to start lowering the tax burden on the families that make up the fabric of the Island.

    • Vineyard Mack, I totally agree that no one has a right to live on the island. There are other great places to live that are more affordable. Commuting is an option as it is for many high priced areas in the country. Thank you for clarifying the short term rental tax and what it means to each community on the island. It has been a bit confusing. I think using taxes from short term rentals on affordable housing would only benefit a small segment of the population, while applying it to all island property owners as tax relief would make everyone’s property a little more affordable. I think that would definitely be a better use of the money. I am not sure, however, why you don’t consider off island property owners as part of the fabric of the island community considering they contribute 62% to the tax base and provide thousands of homes for vacationing families to stay and spend their vacation dollars on the island. Be fair to your off island property owners and include them in the tax relief plan. They sound like a pretty important part of the fabric of the island to me.

  11. Vineyard Mack I agree with most of your post with the exception of Using the tax ONLY to reduce the tax burden on year round residents.In Tisbury seasonal residents are already paying higher taxes and are being asked to collect more taxes for the Town. Mavbe if they all decided to not rent for a year or two and just used their homes for themselves many problems would be solved, Long backups at Five corners,crowed stores, to many people at the beach hard times getting ferry reservations. It might be sort of like a Navy Two Dollar Pay Day(in a Navy Town every once in a while everyone got paid in two dollar bills,the end result was before to long the town would be awash in two dollar bills,just a small reminder of where the butter for their bread was coming from.

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