The Coalition to Create the Martha’s Vineyard Housing Bank (CCMVHB) will clarify language in its draft warrant article, following a public forum on Saturday morning.
After one year of collecting members and gathering support, the CCMVHB drafted a warrant article that it plans to present to voters at annual town meetings in 2022.
Saturday’s forum, which had more than 60 attendees, fielded questions from the public about how the housing bank would operate, and whom it would serve.
The coalition is working to model a housing bank after the Martha’s Vineyard Land Bank, and collect a 2 percent transfer fee on real estate transactions, paid by the buyer, but only on all dollars above $1 million: A home purchased for $999,999 or less would be exempt from the fee, while a home purchased for $1.2 million would be taxed 2 percent on $200,000.
Since its inception, the coalition has been focused on two things: getting statewide transfer fee legislation passed on Beacon Hill, and creating an Island-wide Housing Bank to receive and distribute those transfer fee funds.
Currently the coalition boasts a 130-member coalition council, a 17-member steering committee, six town select board representatives (several down-Island select board reps were missing Saturday), a Dukes County representative, a Martha’s Vineyard Commission representative, and two representatives from the Wampanoag Tribe of Gay Head (Aquinnah).
The draft article states that four out of six Island towns must approve a housing bank. As drafted, the housing bank would consist of seven elected commissioners, one from each town, plus one at-large member. Each town will have a town advisory board with representation from existing town committees and boards. These advisory boards are consulted, and must approve any project of more than two dwelling units in their town.
Housing bank funds would be available for projects that target applicants with incomes up to 240 percent of area median income (AMI). The housing bank may make loans or grants, may borrow, and may buy and sell or lease property. The housing bank will not develop, renovate, manage, or operate properties.
All the projects are permanently restricted to year-round occupancy, and projects receiving grants will be income-restricted up to 240 percent of AMI.
Projects that reuse developed property, are close to existing services, and address climate change and water quality will be given priority.
The draft article also says the state legislature may adjust, but any substantive changes will require majority vote by select boards.
The warrant article also has a sunset clause built-in that would make the housing bank expire after 30 years unless the majority of the Island’s six towns renewed it. If not renewed, fee collections would continue to cover outstanding debts until all debt is paid.
The draft warrant article can be reviewed in its entirety on the coalition’s website at ccmvhb.org.
Susanna Sturgis asked if there was provision for the housing bank should the Island government change in 30 years, and regionalize to a hypothetical all-Island select board.
Steering committee member John Abrams replied by saying the housing bank sunset clause states even if regionalization happens, the Island could still have villages or townships, similar to the town of Barnstable.
Daniel O’Connell, the former Massachusetts secretary of housing and economic development and a current member of the coalition steering committee, said the legislation is a key piece to the housing bank becoming a reality. “It is very important to have that enabling legislation in place. And then we, the towns of Martha’s Vineyard, the six towns, will be able to adapt that legislation to our particular needs through the warrant article town meeting process,” O’Connell said.
O’Connell said one of the challenges the transfer fee legislation faces at the state level is efforts from the Massachusetts Association of Realtors to block the legislation. Island and Cape Cod Realtors, however, have been supportive of the legislation.
Steering committee member Doug Ruskin said that housing bank funds could be used to fund all types of affordable housing projects. “We would not be subsidizing market-rate homes,” Ruskin said. “But if a developer wants to create 100, 75 of which are affordably restricted, we would be able to contribute some money toward that. And again, that’s not written in stone. The housing bank commissioners and advisory boards would put their heads together on how best to do this.”
The housing bank is also looking at shared appreciation equity loans, which are loans that could go to a person who is on the cusp of purchasing a home, but needs help with the down payment.
“In my mind, what I think of is somebody who qualifies for a bank mortgage because their income is sufficient, but they need a 10 percent down payment, and they’ve got only, you know, 7 percent of it, and they need that little bit extra to put them in a position for the bank to actually make the loan,” Ruskin said.
Once a housing bank exists, Ruskin said they would work on occupancy restrictions that would most likely allow homeowners to rent their home for the carrying cost of the property if it’s an ownership unit, or a portion of the rent for a rental unit.
“The whole point is so speculators and profiteers can’t make money off of it, but yes, people certainly could keep the rent covered while they’re away on vacation,” Ruskin said.
The 240 percent AMI is based on the Aspen Pitkin County Housing Authority. Coalition coordinator Laura Silber said the proposed AMI is high to keep pace with rising house prices.
“[Aspen] established their housing bank in 1989. So we’re talking over 30 years ago, when their real estate market looked a lot like ours. Now Aspen’s median home price is over $10 million,” Silber said. “They were thinking not just what they needed in the next five years or 10 years, but what they were going to need 20 to 30 years down the road.”
Ruskin said there will be some paid staff to operate the housing bank, but asked others on the call if they thought housing bank commissioners should be paid or not.
“My personal belief is that the commissioners should absolutely not be paid. Just like Martha’s Vineyard Commissioners and just like Land Bank commissioners,” Abrams said.
The Land Bank has committed to performing administrative work associated with fee collections, should a housing bank be approved.
The warrant article needs to be ready for town meeting warrant deadlines, which in some communities are at the end of December, Ruskin said. The coalition plans to meet next with select boards, Dukes County, and the Martha’s Vineyard Commission.
“We’re looking to have this [submittable] before Christmas,” Ruskin said. “Between now and then we have to propose to ourselves some language changes, get that in, get that distributed.”
Following discussion and questions from members of the public, Silber said the coalition will clarify language in the warrant article on what income levels are served, if commissioners will be paid or not, and create a definition of year-round occupancy.
“We model this whole thing on the Land Bank because it’s successful,” Ruskin said.