Housing bank fails to pass in state legislature

Updated August 12.

An ambitious piece of state legislation that would have created a funding source for affordable housing initiatives quietly failed to pass last month in the State House, even as housing prices soar and Islanders find it more difficult than ever to secure stable accommodation.

Facing strong opposition from the state’s powerful real estate lobby, the legislation for the local option to institute a so-called real estate “transfer fee” was drafted in three separate bills in front of the Massachusetts House and Senate this current two-year session, which began on Jan. 1, 2025. Led by the Cape and Islands’ legislators State Sen. Julian Cyr and Rep. Thomas Moakley, the transfer fee initiatives quietly stalled on the House and Senate floor in July, which Cyr said was a setback for local proponents of affordable housing. 

Cyr and Moakley proposed the bills be included in a comprehensive bond bill called the Mass Wins Act, which was filed by Gov. Maura Healey on April 16, and seeks to address economic challenges and increase housing supply throughout the state. On July 9, the House of Representatives passed its version of the bond bill. Cyr said the transfer fee legislation was not adopted. On July 24, the Senate passed a revised version, which also didn’t include the bills. The two versions of the Mass Wins Act still have to be reconciled in a conference committee before the final compromise bill passes the legislature and lands on Healey’s desk to be signed into law. 

Cyr said it became clear during the legislative sessions in July that the initiative would have to start over again next year. Much like two years ago, when similar legislation for a transfer fee was left out of a comprehensive statewide housing bill, there was opposition by the Massachusetts Association of Realtors, a member-based organization of Realtors and fierce lobbyists on Beacon Hill. The association feared how drastically a fee would affect the housing market.

“It’s been a pretty uphill battle to secure some form of a local-option transfer fee,” Cyr told The Times. “We’re back to square one in a new session next January.”

Cyr and Moakley’s bills proposed a local option to implement a onetime fee of 2 percent on real estate transactions of $1 million or more, which would be funnelled into a housing bank to be used for affordability initiatives. 

Had the legislation passed, it would have operated similarly to the Martha’s Vineyard Land Bank, which funnels a 2 percent fee from real estate transactions, with possible exemptions available to first-time local homebuyers, into a bank to be used for conservation efforts. The Land Bank was established in 1985, and since then has conserved 7 percent of the Island, from walking trails to sweeping parcels of forest. 

A funding mechanism for housing was proposed first in 2005 by Islanders who were concerned about skyrocketing housing prices then, but similarly, it stalled on the Senate floor. In 2022, advocates and Islanders took up the housing bank again, along with Cyr and then–State Rep. Dylan Fernandes, and publicly proposed the initiative. 

“I’ve been making the case persistently and relentlessly to my colleagues that the scale of the housing crisis we face on Martha’s Vineyard, Nantucket, and now parts of Cape Cod, is so acute, and to fix will be so expensive,” Cyr said. “We just haven’t come up with a better revenue solution that would generate the tens of millions of dollars that we need to preserve year-round housing options for Islanders.”

The housing bank was the primary way local housing officials sought to balance the scales of steadily soaring home prices and a community struggling to make ends meet. Year-round, the median home price was $1.5 million in 2025, and is expected to continue to rise; more than half of Islanders cite being cost-burdened by their mortgage or rent; and homelessness rose to 341 people without stable housing on the Vineyard last summer, according to Harbor Homes, the only local nonprofit that assists the unhoused. 

The transfer fee was viewed as a way to fund housing projects outside of new developments. Local advocates maintained that the Island needed this funding source for creative housing initiatives due to the unique environmental concerns and seasonality of the area.

Coleman Lynds, government affairs manager at the Massachusetts Association of Realtors, told The Times in an interview that the association and its 22,000 members have historically opposed the legislation. He said transfer fees reduce housing opportunities instead of expanding them. 

“They discourage mobility. They reduce housing inventory, increase costs, and undermine the very affordability that they intend to approve,” Lynds said. He said that a fee on real estate transactions could have unintended consequences on tax revenue, and could negatively impact the real estate market in the long term. 

In 2024, the housing bank legislation was excluded from the Affordable Homes Act. At the time, Speaker of the House Ron Mariano expressed doubts about the efficacy of the transfer fee, and the Massachusetts Association of Realtors upped their pushback on the measure. 

A seasonal communities designation in the Affordable Homes Act instead allowed for some headway on affordable housing while acknowledging the Island’s makeup. The Vineyard was one of 44 municipalities in the state to receive the designation, which provides special regulation allowances and funding opportunities. 

Lynds said there was a 2024 study on the legislation, on behalf of the Massachusetts Real Estate Community Alliance, that showed that a fee on high-end homes “reduces housing mobility … reduces homes’ value,” and “shrinks the base of existing taxes so much that any new tax would actually lead to a net loss in tax revenue every year.”

Despite those worries by the association, in 2025, transfer fee legislation was again proposed. Islanders and local real estate brokers pleaded with lawmakers to pass it in September, but besides that, the effort was not as publicly visible as it was in 2022. Instead, a study conducted by the University of Massachusetts Amherst Donahue Institute (UMDI), at the request of the Martha’s Vineyard Commission, portrayed the on-the-ground housing realities Vineyarders and other seasonal communities are facing through comprehensive data collection. 

The UMDI study found that a transfer fee would minimally affect the Island’s real estate market by comparing it with another resort destination, the Hamptons. 

Cyr said the study “clearly laid out that in luxury real estate markets like Martha’s Vineyard, transfer fees don’t have the adverse effect that opponents claim.”

While the Massachusetts Association of Realtors historically opposed the adoption of a transfer fee on luxury home sales, some local Realtors have advocated on its behalf. Island real estate broker Jim Feiner lamented the stalling of the legislation, which he said could benefit year-rounders who are in need of affordable housing. 

“I’m personally disappointed on several fronts, but most importantly, that the legislators are swayed by lobbyists to feel that transfer fees are bad for business and property values when we know that they are actually good for our community, and we have proof of it. In my mind, once again, we are putting profits over people at the expense of making our community healthy and strong,” Feiner said in a message to The Times. 

Philippe Jordi, founder and CEO of affordable housing developer Island Housing Trust, told The Times the issue facing Islanders is largely the erosion of the housing stock because of seasonal visitors, and not enough housing protections for year-rounders to ensure that there are still options. “We need to help with creative solutions, and this one is really, I think, what people were hoping for in terms of being able to shore up our existing housing stock,” Jordi said. 

This summer, some Airbnbs are listed at a staggering $300,000 a month; locals have continued to cite high difficulty finding and keeping rentals; and workplace housing has continued to be strained, and sometimes an overcrowded reality for those who are employed seasonally. 

“This has been and remains my top priority,” Cyr said. “I can’t tell you how heartbreaking it is not to be able to deliver a revenue tool that our communities urgently and sorely need to be able to have a hope of having a sustainable future.”

But the transfer fee advocates may have the same hurdles in the future. Lynds told The Times that there are better alternatives for affordable housing initiatives, like modernizing zoning bylaws. When asked if the Massachusetts Association of Realtors would be against the transfer fee legislation in 2027 if it was again brought to Beacon Hill, Lynds said they have “opposed every form of transfer tax legislation in the past.”

“We have not found a version that is something that we have been able to support. I think we’ve really been looking at other forms of policies that will help address this housing crisis that we have,” Lynds said. 

Still, Islanders and lawmakers aren’t giving up. Cyr said he’ll keep fighting for the option to create a funding source for housing for the people who need it most. And local advocates say they plan to launch a reinvigorated campaign.

“The minute the next session starts, we will be there, full force, just the way it’s been for the past five years. And Julian [Cyr] and Thomas Moakley, both of them, are absolutely committed to this,” John Abrams, a steering committee member for the Coalition to Create the Martha’s Vineyard Housing Bank, told The Times.

Editor’s note: This story was updated with additional interviews and information about the legislative process, and to reflect that while 41 percent of the Island is conserved, the Land Bank is only responsible for 7 percent.