At a Wednesday meeting, Martha’s Vineyard Commission’s joint affordable housing group honed in on how to encourage Island towns’ select boards to begin considering use of revenue from short-term rental (STR) taxes for affordable housing for year-round residents.
Since the short-term rental tax bill was codified in 2018 and went into effect in 2019, Martha’s Vineyard towns have accumulated millions of dollars from the state-mandated 5.7 percent lodging fee on top of enforcing municipal fees, ranging from 4 to 6 percent on STRs.
With a handful of town administrators vehemently opposed to allocating STR revenue toward creating affordable housing, questioning the consistency of the new influx of money and citing the need to accrue data over time, affordable housing representatives have begun talks on how to aggressively push the issue into the spotlight.
With little help from select boards, the joint affordable housing group is charged with coming up with an effective and presentable plan that will entice residents to support the efforts.
Laura Silber, coordinator for the Coalition to Create the Martha’s Vineyard Housing Bank and newly appointed MVC housing planner, explained that the issue can be broken down into two parts. The first, she said, is how to secure and then use potential funding through the STR revenue; the second is the local ordinances that would need to be in place that would determine future local bylaws.
Silber expressed the need to conduct comprehensive research regarding ordinances that could regulate STRs; one example, she said, is preventing corporations from being able to buy into existing residential housing stock with the goal of turning it into an STR.
Another, Silber offered, would be upping the amount of tax placed on STRs to the maximum amount. Since the beginning of the STR tax collections, Edgartown, Chilmark, and Aquinnah have opted to charge 4 percent for rentals on top of state tax, while Tisbury, West Tisbury and Oak Bluffs require a 6 percent fee.
In Edgartown, for example, Silber said, if given the opportunity to decide, voters may agree to increasing the tax, which could potentially incentivize the town to allow for the additional 2 percent to go toward affordable housing projects.
Regarding the revenues, town administrator James Hagerty has been consistently hesitant to allocate STR collections for anything specific. Instead, the town has chosen to put the money in a stabilization fund. If any changes were to happen, it would have to be on a warrant article and voted upon at town meetings.
West Tisbury affordable housing committee member Jefrey DuBard, appointed by the town’s Community Preservation committee, said he is working up support for a potential warrant article that would allow “a significant portion of the short-term rental tax income be allotted to the town’s affordable housing committee,” and would ultimately be voted upon at future town meetings on an annual basis. “It’s an important thing that we get in place,” he said. “This short-term rental income is kind of going into the abyss right now, in every town.”
DuBard said the goal would be to get his town to put 75 percent of the STR revenue into affordable housing. Originally, he said, he wanted to propose the entirety of the tax collections made its way to the municipal housing trust. “This is the most important issue at hand,” DuBard continued; “this is a source of revenue that was designated because of a practice that is in direct opposition to secure, year-round housing — period.”
Oak Bluffs affordable housing committee chair Mark Leonard responded, relaying his experience with bringing up the STR revenue-funded housing concept to his town’s administrator and select board. Leonard noted that town administrator Deborah Potter has taken to, at every select board meeting, repeatedly citing — verbatim — her position opposing setting aside STR funds for any reason. Mirroring Hagerty’s stance, Potter has been avidly against even discussing the possibility of using said funds. Leonard said he’s met with “massive amounts of pushback” by the town upon broaching the subject.
“It’s an uphill battle,” he said, “and I suggested only 10 percent.”
David Vigneault, executive director of the Dukes County Regional Housing Authority, noted the difference between investment STR properties and owner-occupied STRs. The latter, he said, “is a wonderful thing,” as it does not involve a reformation of neighborhoods, but rather, allows year-round residents extra income by meeting housing demands.
However, Vigneault honed in on the most concerning issue: “the inability of the towns to even make a token statement by putting some funding from the proceeds from STRs into their municipal housing trust funds.”
On the complexities of creating a plan that appeals to towns and also allows for Island-wide collaboration, Tisbury planning board member and MVC commissioner Ben Robinson noted, “We’re at a point where we ought to try.” He said there are plans to hold an all-Island planning board meeting Nov. 9 to discuss how to begin those discussions.