Updated June 10
New data released by the Martha’s Vineyard Commission documents the growing challenge of providing affordable housing on the Island, even as the Massachusetts House of Representatives appeared to reject a proposal to levy new fees on real estate transfers.
Vineyard housing advocates had ardently pushed for the measure, which would add a 2 percent tax on the sale of properties over $1 million that would be used toward developing affordable housing.
Adam Turner, executive director of the Martha’s Vineyard Commission, said the transfer fee would be a way to buy some houses in seasonal ownership and convert them to year-round housing. “We can’t build our way out of this,” he said.
Despite the setback at the State House, the long-sought transfer fee may not be a lost cause. Vineyard Rep. Dylan Fernandes introduced an amendment Monday to get the transfer fee back in a $6.2 billion housing bond bill that is meant to increase housing production in the state.
The Massachusetts Senate has not yet released its version of the housing bill. Meanwhile, the bill to create a Vineyard housing bank was referred to the Joint Committee on Revenue last year and is still under consideration by state legislators.
Edward Augustus, the Massachusetts secretary of housing and livable communities, who visited the Island Tuesday, told a public meeting at the high school that he still saw “a lot of opportunities to move the needle” for the transfer fee.
“I wouldn’t get disappointed or frustrated yet,” Augustus said. “Nothing works in a linear line.”
The commission presented its latest “State of Housing on Martha’s Vineyard” report to about 100 people at the meeting
Laura Silber, Island housing planner for the commission, told the gathering that the average home price on the Island last year was $2.3 million, and the median home price was $1.55 million. Both are up from the year before.
She estimated that a family would need a yearly income of $650,00 to buy a $2.3 million house, assuming a 20 percent down payment of $460,000 and $16,000 in monthly carrying charges from a mortgage, taxes, and insurance.
“The folks who can afford this, that’s not our year-round community,” Silber said. Even the median home is out of reach for many, she added. A family would need a yearly income of $431,700 to buy a $1.55 million home, again assuming a 20 percent down payment.
“We’re losing a large portion of our workforce and our seniors” who have not seen their incomes rise as quickly as housing costs, Silber said.
Housing costs on the Island have skyrocketed since 2012, when the average home price was $1 million and the median home price was $600,000.
“We have a crystal ball into our future, and it is the island of Nantucket,” Silber said, noting that housing prices there are usually eight years ahead of the Vineyard. Last year, the median home price on Nantucket was $3.2 million, and it’s expected to grow to $3.55 million this year.
According to the report, more than 40 percent of the people in the Vineyard’s 6,899 housing units occupied all year pay more than 30 percent of their income for housing. Most experts advise paying no more than 30 percent for housing.
As of 2020, Martha’s Vineyard has a year-round population of 20,530, Silber said.
Regulations developed off-Island don’t necessarily help Vineyarders. State funding for affordable housing is restricted for those who earn up to 80 percent of area median income. That’s $70,150 for a single person on Martha’s Vineyard.
The Island had 430 such subsidized housing units last year.
Augustus, who is on a statewide tour to gather feedback for a state housing plan, told The Times the Vineyard’s housing challenges are “really daunting.” He said the Island needs affordable workforce housing and pathways to housing for the “missing middle” class.
While the housing bill by the state House of Representatives does not have the local transfer fee, Augustus said the legislation can still help the Vineyard. It includes a proposed seasonal-communities designation that could lead to more grants and programs to encourage development of affordable housing for year-round residents.
“We need new tools,” he said.
But hanging over the discussion before Augustus spoke was getting the transfer fee passed.
“Ultimately, the best [solution] is the transfer fee,” Jim Feiner, principal broker at Feiner Real Estate, said.
A previous version of this story stated the state legislature rejected the transfer fee. The Massachusetts House of Representatives’ version of the housing bond bill excluded the transfer fee but the Massachusetts Senate had not released its version of the bill yet. The bill to create a Martha’s Vineyard housing bank is still under consideration by state legislators.
The article states that the median home price is $1.5 million dollars. So, who is going to be damaged by this transfer fee? The ones trying to buy their first home. I have said it in the past and will say it again, $1m is too low of a threshold, that only hurts those who are buying homes to live in, not rent out. If you are going to insist on a transfer fee please raise the threshold to the average home price to $2.3m. Then at least the first time home buyer isn’t paying an additional $30,000.00 in taxes for the housing bank and then another $30,000.00 in taxes for the land bank. The island is taxing the first time home buyer out of the market. Stop these taxes or raise the thresholds for both the housing bank and land bank. The threshold of $1m was set years ago when the median home price was under $1m. Update your plan with current home values. You are crazy to think the first time home buyer can pay all these taxes with their income of under $200,000.00. Taxachusetts is right.
Would you be happier in a low tax state?
Some place with no income or sales tax?
Some place that welcomes doublewides?
Albert, read my post. I don’t get your questions? They have nothing to do with my post. I still pay taxes but these additional add on taxes, land bank, housing bank, short term rental tax, Port tax, are driving prices up on housing, and goods and services. Now Tisbury wants to install a parking tax for the park and ride lot because they can’t manage the property when the port tax is designed to do just that. Stop with these added taxes, they are just hurting those who live here.
Patrick, Massachusetts is ranked 20th in terms of Tax Burden,
which is squarely middle of the pack.
https://www.visualcapitalist.com/visualizing-the-tax-burden-of-every-u-s-state/
Mary, “Overall, though, Massachusetts is not a cheap place to live. In fact, The overall cost of living index score for Massachusetts is 131, which is 31 percent higher than the national average.” Moving.com. More from moving.com. “Taxes are also high in Massachusetts. According to SmartAsset, “the Massachusetts income tax rate of 5.05 percent is higher than all but one of the other eight states that levies a flat income tax.” Property taxes also tend to be high in Massachusetts. SmartAsset claims that the state’s average effective rate is 1.22 percent, which is the 18th highest rate in the country. Home prices in Massachusetts tend to be plenty pricey as well.” In addition, according to this article “The Top 10 Most Expensive States To Live In For 2023”. Massachusetts is the fourth highest state to live in. So Mary, according to you, Mass is the 20th ranked state in terms of tax burden, but it is also very costly to live in Mass. Not to mention, the increased cost of living on the island. So my points hold true, why are we adding yet more taxes to our already stretched budgets? And, why are they not considering that the increased median home value of houses here is so high, which means, that basically every home sale on the island will incur this 2% housing tax? This just adds to the burden of the buyer of a first time home. These threshold triggers need to be updated to Current Home Values and this should also go for the land bank.
Interesting that no one has mentioned pay scales. Really? Everyone wants “something” for “nothing.” If you need teachers, pay them a living wage. Don’t look over to the neighbors to see what they’re paying, pay what’s needed in our neighborhood. What does housekeeping cost? Landscaping? Someone to change your tires? Run the gas station? (Anyway, put solar panels on your roof and run an electric car, then we won’t need gas stations).
Do we really believe we won’t annihilate affordable housing when we rent short term? If we have two houses side-by-side exactly the same and one rents for $10k per month and the one next door rents for $10k per night, how long will the monthly rental stay a monthly rental? One more season? One more month?
Maybe we need to build up. Or a bridge so the rich people live on the island and the poor people commute to work.
Possibly the most dispiriting headline ever.
Julian, we need to make change! Let’s not take it lying down! Reduce short-term rentals so people have a chance!
Affordable housing also brings many problems. Overcrowding, traffic, waiting lines at stores, increased pollution, much higher property taxes to build schools and infrastructure, Higher likely of a Crime element,
Better to acquire faster transportation to the island such as fast ferries. Keep the island nice, not overcrowded. Lower cost for those already here by reduced taxes on year round residents. Enforce Visa laws for illegal residents. I also wonder if we are increasing our school budgets and infrastructure to accommodate illegal residents?
One of the ways we could solve the housing crisis is put it on the short-term rental owners: If you rent short-term, you must contribute to a fund that provides PERMANENT (and perhaps free) housing for the service workers who must be employed to serve the short-term rental. How many people are required per capita to serve short-term rentals? How many housing units are needed for service workers per housing unit of short-term rental? Please don’t forget related industries like education and insurance. That amount of money taxed to short-term rentals should be big enough that it makes the economic benefit of a short-term rental the same as a long-term rental.
Before the wall came down, the Soviet Union did all the things you mention above and even confiscated Grandmothers apartments and houses for their own ilk. Ms Hansen yes we need some regulations but forcing people to solve an economic problem with their own property is a bit much wouldnt you say?
The population just increased by 8million in the last 3 years. They have to go somewhere why not MV? Build housing projects in the middle of the island like other cities do and be done with it. You can’t keep asking people to come in one breath while in another say not here because we don’t want to change our precious island. Is it hypocrisy or naïveté or all of the above?
Carl, not everyone wants to live year-round on an island, forced to rely on boats or airplanes for connection to the outside world.
Comments are closed.