The housing situation on Martha’s Vineyard was already in crisis before the COVID-19 pandemic hit. The worldwide health crisis has made the situation with rentals and homeownership even more dire, because when families fled from crowded urban areas, they either took refuge in their summer properties and worked from home, or they scooped up available properties on the Island — paying cash above the asking price, and driving up prices on all properties. In one year, the median sale price skyrocketed from $800,000 to $1.2 million on the Vineyard.
That’s put the price of housing on the Island, already a stretch for some families even with two incomes, out of reach.
We talked separately to some of the Vineyard’s leading experts: Think of it as a roundtable discussion, except everyone wasn’t in the same room. We discussed the issues that created the crisis, the factors that make building on the Island difficult — environmental issues, climate change, and permitting, among them — and considered some solutions that have worked, as well as how a housing bank could provide the infusion of cash needed to help those not covered by affordable housing guidelines.
We had conversations with an affordable housing advocate, Dukes County Regional Housing Authority executive director David Vigneault; a nonprofit developer, Philippe Jordi, executive director of Island Housing Trust; a banker, Jeanne Ogden of Martha’s Vineyard Bank; a housing bank advocate, Julie Fay, co-chair of the Coalition to Create the Martha’s Vineyard Housing Bank; a planner, Adam Turner, executive director of the Martha’s Vineyard Commission; a real estate agent, Jim Feiner of Feiner Real Estate; and a senior housing advocate, Paddy Moore, the former executive director of Healthy Aging M.V.
What type of housing is Martha’s Vineyard lacking?
Vigneault: There are no rentals on the Island of any sort, for everyone from affordable up through folks trying to buy a week right now. I think the simple fact is that’s been coming for quite a while, and it’s frustrating that the best efforts of many folks to bring attention to that have fallen on relatively deaf ears at the leadership levels in towns, with notable exceptions. There have been some significant efforts to establish the very needed mixed-income housing options at the rental end — Morgan Woods being the most significant.
Jordi: Like a lot of communities that are challenged by real estate values, specifically resort communities, you have a need for housing that is attainable not just for low- and moderate-, but for middle-income people.The funding that is available to create that housing availability is really not focused on the middle-income. We as an organization can serve people in the middle-income because we have that ability through our IRS designation when we were formed, because of bylaws in towns that identified a need for those between 120 and 150 percent of median income. The reality on the ground is, How do you fund that? How do you create the subsidy of financing to serve that need? Pretty much it’s limited to 100 percent of the median income. That’s quite a lot of range that’s not covered.
Ogden: You see teachers, your police officers, your bankers really just trying to find affordable housing, and there is really just nothing on the market under a million dollars. They have good salaries, it’s just finding a property within their reach, and they may make too much money for income-restricted programs. They can afford a mortgage of $750,000, but they can’t find a property … A family of four, at 150 percent of median income, you’re looking at family revenue of $157,000. These are incomes that can support a mortgage; it’s just finding a property.
Fay: Folks who make good salaries — librarians, teachers, nurses, tradesmen, husband-and-wife teams who have incomes over $120,000 — still can’t come even close to a down payment and the kind of monthly cost of housing. That is exactly what we’re talking about. The Dukes County Regional Housing Authority addresses those folks at the low end of the income spectrum, but there is no opportunity for year-round rental or ownership for people whose salaries well exceed those low-income thresholds. They don’t qualify for Dukes County assistance because they have too much income.
Turner: The key problem that the Island has is that it has a limited amount of land, and that land is expensive. People who own the land can find more uses for it beyond putting up affordable housing. If someone buys it, then they have to spend a tremendous amount of money to put something up. And if you spend a tremendous amount of money to put something up, it’s hard to limit how much return you get. It’s an economic question.
Feiner: We would have a bidding war occasionally; now we have bidding wars on 75 percent of properties on the market — especially if they’re priced well. I would say in the phenomenon we’re going through, there seem to be some ebbs and flows. It’s hard to look at it from a microscale, but there are obviously more buyers at the bottom of the market. There are almost no homes for under $1 million. And almost everything under $1 million is a fixer-upper. Some buyers, some brokers are suggesting to their clients that a bidding war may be a way to get you a higher value, and so they are suggesting slightly underpricing the home, and rather than negotiating immediately, having open house formats to bring in numerous buyers at the same time, and encourage multiple offers to come up with a sale price.
Moore: Seniors fall into several groups. There are people at the high end, people with second houses, and we don’t worry about them. They’re positive, because they want to volunteer. Close to 90 percent of seniors own their own homes, but for many of them, it’s their only asset.
What are some of the factors making it difficult to create more housing?
Vigneault: Who knew a pandemic was coming? The absolutely understandable movement of folks to move here to live here year-round in their homes, and the incredible numbers of resales in a shortened COVID year. In a five- or six-month season, we had 500 transfers … They’re fine, they’re understandable, and they’re defensible. It’s the free market. It’s personal use. Nobody argues against it. But on an Island, it just equals more displacement. The direct absence of all manner of, whether it be a seasonal rental or summer rental that somebody can pick up for three or four months for larger bucks, but still work their two-lease system, all of that just pretty much disappeared.
Jordi: Look at undeveloped land. What’s available? Is it suitable? That’s something we’re doing now, working in collaboration with the Land Bank in terms of larger parcels. What we’ve done is in partnership with them, we’re able to use land in a way that’s based on smart growth principles. We’re concentrating these pocket neighborhoods on a larger portion of land, and because of the lack of infrastructure, we need all that land to account for nitrogen credits and count [the amount of nitrogen produced], and even in some cases to have a proper wellhead protection around a public well. So those types of creative solutions work. We couldn’t do that. We could do it — it would cost us more — but we’d still have to conserve part of the property. It really figures into our strategy of how we do these things in a smart way.
In this case, we’re kind of doing two things: We’re partnering with an entity that can come up with a portion of the purchase price, and we’re able to use that land for the permitting. There is still plenty of land available. We’ve identified a lot of parcels; some of them are more challenging, because of title. We’ve looked into this, but frankly it’s harder, because it’s not a project, it’s a program — accessory dwelling units. There are properties on this Island where you could put a small, 400- to 500-square-foot prefab, modular ADU in their backyard and tie into their existing infrastructure. What do we have, 17,000 homes? It could help with year-round housing. A big problem is we’re losing a lot of our housing stock to Airbnb and investment properties. You just ran a story where towns are flush with revenues from [short-term rental] taxes, and it’s having a direct impact on people who are trying to find year-round and even seasonal. We can’t compete with that. There’s no regulations. We don’t license these operations. We have no control.
Ogden: Right now you see the struggles, and that is disheartening. Here’s a prequalification letter, but there’s nothing on the market that will work with it. You do see the struggles of these families just trying to find secure, stable housing.
Turner: Look at the big picture here. You’ve got an Island. You’ve got limited land … If you pay $2 million for a couple of acres, and by zoning you can only put 12 units on it, to make a profit and to build it, which costs more now, you can’t target it to people who are only going to pay $700 per month. It’s just not going to work. But if you can put 30 units on it, maybe it would. So the question is: How can you get 30 units and meet the fleeting character? How do you balance those things?
Fay: The short-term rentals. I think a little under 20 percent of housing on MV is short-term rentals. They average about $2,000 a week. That’s the average. You add to that the fact you have the Marriott Corp. and other large chains coming in and buying up more inventory and renting them out. It’s a terrible problem on Nantucket, and it’s starting to become an issue here. Our whole intent, as far as the housing bank is concerned, is we can influence and reprioritize the existing housing stock and focus on land that’s already been developed. We’re really aware of the wastewater and nitrogen issues. How we shape the legislation will hopefully have some impact on those issues.
Feiner: The COVID phenomenon helped people redefine how they lived their lives and with the outpouring of Zoom users being able to work from anywhere. Now people’s homes that used to be rented for much of the summer can be lived in for longer periods. We have people looking at living here full-time or six months, and splitting their residencies because they can work wherever they are. There are also tons of investor buyers out there, because they see that Martha’s Vineyard is now falling into the same pattern as Aspen, Breckenridge, and Nantucket. That there’s not enough rentals, and if they do the crazy Airbnb rental market, they can make significant profit on their investment. Rentals are going to continue to rise until there’s some kind of correction. That’s certainly not anything we’re going to see in the near future.
Moore: Martha’s Vineyard Hospital has been running around 50 patients at Windemere [Nursing & Rehabilitation Center]. Their license allows them up to 110, and they’ve been running up until this year around 72 to 75. Because they lose so much money on Windemere, they’re hanging on by their eyelashes until we can get the Green House [a campus-style neighborhood for seniors in the planning stages] going. The challenge is going to be to balance Medicaid beds and people who will pay … The minute those beds are full, and we expect to run at capacity, they probably could be duplicated again. You have a lot of people living at home who can’t afford assisted living, and never will be able to … And people who are going to need high-level nursing care who may not be able to find it. There are people coming along who are now in their 60s and 70s, so we need additional homes for elders. Then there’s the population of people who want to downsize, who live in big houses and don’t have the money to transform them, but want to stay on the Island, and can’t find any houses to buy or rent or steal. So they are hit by the same forces.
What are some of the better solutions you’ve seen?
Vigneault: Morgan Woods is a wonderful model that doesn’t get talked about enough. First of all, the clusters are quite lovely. It’s a nice neighborhood. And, more importantly, among their 60 units are options at 110 percent income and 140 percent income. So now we’re talking about family sizes of four at 140 percent is just under $150,000. Now you’re talking about a really significant income and a homemaker, or two decent incomes and children. We need that. That’s one of the bigger holes right now. Whenever Morgan Woods had vacancies, it was those higher-end rentals. Then coming out of the great recession, their biggest growth in the waitlist was at the 110 and 140 percents.
Jordi: Looking at Nantucket, they’ve been able to do some work, but they’ve had to import their development capacity from off-Island. We’ve been able to build our capacity through a state tax credit program called community investment tax credit. We offer our donors half of their contributions back in state tax credits, which is netting us now a half a million dollars. That provided us the ability to build our staff and respond to what’s needed … Using low-interest loans, bridge loans, to buy properties has been huge. It’s the reason why we’ve been able to at least double our housing production.
Ogden: We’re seeing more employers looking to help their employees find housing. Home partnership program. It’s a participation loan for a second mortgage so they can afford a down payment. The employer provides the funding, but we’re the vehicle that does the servicing of the loan.
Turner: It has to be the towns. Really getting serious and mandating and accepting higher densities in certain locations. On the Vineyard, that’s going to be difficult to do … A greater number of units that were truly mandated for middle-income people on a rental basis would really reduce a lot of the pressure.
Fay: I’m just constantly impressed by the work at IHT. Their creative approach to finding opportunities and then turning those opportunities is really remarkable. They’re also very much into conservation issues as they develop housing — worries about wastewater and climate change. That’s part of their whole approach to repurposing facilities. That will carry on with what the housing bank does. We know we can’t just go on a housing spree and not take into consideration those very important issues that will impact the Island in 10, 15, 20 years. Have to be careful about that.
Feiner: I’m chairman of the housing committee in Chilmark. I have bought units that I rent exclusively to our year-round population. We can’t do enough as a community. The community has been undersupported by the real estate market. As a professional, I’ve tried to get other brokers to identify with their sellers, people who are willing to sell to locals first. I even created a Facebook page that I didn’t go live with, called MV First 30, which is the idea that for 30 days Islanders should be given the opportunity to buy a house that is purchasable. But nothing is purchasable anymore. We’ve exceeded the threshold that most normal people who do really well can afford. We need affordable housing desperately. If you have a successful business, you need employees. Your employees need housing, so it behooves them to invest in that. And businesses can charge by the bedroom, which might be more lucrative than renting a house as a house.
Moore: The reason Healthy Aging started the home modification program last year was because there are so many seniors who have limited incomes who want to stay in their homes, and their homes are just not safe. They’re not eligible for bigger kinds of grants that Melissa Vincent has been working on with the towns, where they replace a furnace or a new set of shingles or roof, these are between $3,000 and $10,000. They need ramps, banisters on the staircases, electrical work. There’s nothing fancy to it, but it is keeping people in their homes. We expect by the end of this year we will have done 50.
With other funding sources out there, like Community Preservation Act (CPA), state grants, and private donations, why is a housing bank needed?
Vigneault: Housing bank looks to creatively use them up to higher income percentages. Towns aren’t going to do that, and they have no history of doing that significantly. So they’re not going to move the funds that could be used … so the housing bank is stepping in and looking at the need that’s unaddressed and will continue to be unaddressed. There are CPA funds, and there is other fundraising — Philippe does magic with his work — It’s double-income families who can’t qualify for our rentals.
Jordi: The problem isn’t going away, it’s only going to get worse, and if we as a community don’t want to invest in the solution, you’re going to get what you get. You might be able to do more of what we’re doing, but not at the scale. It’s just going to get more complicated, with environmental regulations and the scarcity in terms of available opportunities … We’re going to have to come up with that investment. It’s not going to come from somewhere else … If we don’t, we’re going to see more situations that are dire in terms of employers. They’re just not going to be able to be open. We’re trying to come up with creative ways. How can we meet halfway with the businesses? It’s not going to involve public funding, because public funding is restricted to certain incomes, and has to be available to the general public.
Ogden: We’ve got to act now, and it has to be a whole-Island collaboration. The M.V. housing bank is a great solution in providing a sustainable revenue that’s dedicated for year-round housing. That’s what we need.
Turner: A lot of employers do find housing for workers. If you look at what employers have to do, particularly to keep their skilled workers here, they’re going to have to find housing. The reason that IHT is one of the few that does is that he’s just good at it, Philippe is good at it. Going over the economic problem, Philippe has figured out a way to get other kinds of funding to where you can do it. It’s difficult for a private developer. You can’t get the tax incentives and all that other stuff that Philippe can get. How he gets his money back is to charge people more. The only way that can happen is if the Island accepted building at higher density.
Fay: The reason for the housing bank is because it’s largely an Islandwide issue. What we’ve seen in the past number of years is there are pockets of success here and there — individual projects, town by town, but there’s nothing addressing the problem on an Islandwide basis. The problem is so acute at this point that absent an Islandwide solution, we will never dig ourselves out of this hole. We’re seeing people leaving the Island. They no longer can afford to be here. It’s causing problems for employers. I know very personally from my time with M.V. Community Services. It was pretty tough losing people because of the housing situation. People who were strong clinicians, childcare workers, or whatever their role was, they had expertise and commitment to that kind of work. Have a full caseload and deal with no housing … it just caused a tremendous amount of disruption. Turnover has its implications for folks. That’s a very difficult circumstance for Community Services.
Feiner: I think a [housing bank] is great. I think our market can handle it. There is enough fat in the profitability on Martha’s Vineyard that people who are buying into the market are not going to flinch. We protect everything on Martha’s Vineyard except for the people, and we need to do more to keep the Vineyard a community we want to be part of, and not a home market catering to people from somewhere else. It’s tragic. I love the Island. I’ve lived here my whole life, almost, but it’s changed so much since 1972, when I moved here. We could see the writing on the walls years ago. Housing is getting challenging, but you could still buy houses for $250,000 to $300,000. We’re going to have to change zoning to create other types of housing situations that might be long-term protections. Our rental market is gone. We’ve lost it. Someone I know had a house that was available, and within less than 24 hours, they had 72 people apply for their house. If you think about the housing problem for the past 20 years, we’ve been applying solutions to fix it, and the solutions are one little Band-Aid here, one little Band-Aid there … CPA comes with strings attached tied to AMI … The housing bank will provide a lot of opportunity for creative solutions, not for today, but for the future.
Moore: I’ve been on the [housing bank coalition] board since it was formed. It’s one of the few rays of hope in terms of the housing situation. The reason I joined early on is that I wanted to make sure people would be thinking of senior housing.
What’s at stake if the housing crisis isn’t solved?
Vigneault: We’re not going to be able to replace the people who are leaving in these municipal positions without the ability to creatively add to the rental and ownership stock at those incomes. Municipal employees, nonprofit organizations, community services are invaluable — they can’t get and keep employees for want of housing.
Jordi: We’re losing ground. It’s not like we’re gaining. We’re losing ground because so much of our housing stock is going seasonal or investment property … When is enough enough for seasonal and investment properties? That’s the real question.
Ogden: It’s a nice community. You don’t want it to be an imported workforce for everything. That’s what we have to try to preserve. That’s a major concern for the Island. We do need to have that mixed demographic. The commute can’t always be guaranteed. The more we can work to make it easier for your cashiers at the grocery store, the tellers at the bank, your teachers and teachers’ assistants. This is the community — not just purchasing a home, but affordable rentals.
Turner: The fact that working people can’t get housing is going to be more and more of an economic drain to this place. You already see restaurants that are not open for lunch, or closed on Sundays, because they just can’t find people. Maybe housing is not the only reason they can’t find people. But if you’re looking for a cook or something, they’re going to want housing for the summer. I tried to hire a person, and they turned me down because there’s just no housing. From an economic standpoint, the Island is going to have to figure it out. People are absorbing the housing. I’m not talking about affordable housing now, I’m talking about people like me. I can afford a house if it were available, but now maybe someone who is telecommuting from New York is living in it.
Fay: This is a big issue for the school system. It’s not unlike community services. You have teachers or special ed teachers who come in and make an impact on the lives of the students and their families, only to decide two years in or 1½ years in the Island shuffle it’s no longer a practical way for them to live. Or a young couple that wants home ownership and they’re forced to live off-Island to do it. Some people try to live off-Island and commute, but it’s not the same as living on the Island, having neighbors and being a part of the community. It’s very different. Think about the worry factor, the anxiety factor — what that does to a family. The pandemic was a perfect example. Folks were used to doing the shuffle, and all of a sudden the shuffle opportunities weren’t available to them, because folks had moved back to the homes that they owned. That’s difficult.
Feiner: We really need to have a long-term vision about this problem to have any kind of solution that’s going to be impactful for the rest of our lives, and the lives of our children and grandchildren.
Moore: There are not a lot of older people who are looking for rental housing who don’t already have it, but there is a group of people — middle-income younger people who are depending on renting, who are going to need rentals. You have a long waiting list for all of the Island elderly housing units … Somewhere in the order of 250 at any time on those waiting lists. One of our next issues is going to push the board of Island Elderly Housing to think of large-scale, and increase housing of that sort. That was almost all federal money. Under the Biden administration, it would be available again.