In Provincetown, housing is top priority

The Martha’s Vineyard Commission’s Housing Action Task Force held its second-ever meeting Thursday, hearing from Provincetown representatives on what that town has been doing to combat their community’s housing crisis.

Provincetown, a small coastal resort town located at the tip of Cape Cod, is a popular vacation destination. Like Martha’s Vineyard, Provincetown’s population swells during the summer months, real estate prices have skyrocketed in recent years, and year-round residents have struggled to avoid displacement. 

But new leadership in Provincetown have made it their mission to address the town’s housing problem. Since prioritizing an array of ambitious housing initiatives, the town’s done more in the past two years than had been done in a decade, Provincetown select board member Leslie Sandberg said Thursday. 

Sandberg said it took some time for town leadership to reach consensus on addressing housing issues, but they eventually agreed that implementing new initiatives was paramount.

“The can had been kicked down the road so much, you couldn’t kick it anymore,” she said.

As municipal leaders, ”we’ve got to make sure that we have a community that is a vibrant community,” she said. “That means we need more than just a lot of second homes.” 

“We’re losing really good people,” Sandberg said, which had prompted the town to work to secure “attainable” housing for all income levels.

Provincetown has a population roughly between that of Tisbury and West Tisbury, at around 3,700. The town has around 4,900 housing units total, compared with Martha’s Vineyard’s 17,000.

The median single-family home sale price in Provincetown has reached $1.96 million. Town officials say that just like in other resort communities around the country, the global pandemic exacerbated the housing crisis.

But unlike Martha’s Vineyard, where now around half of Island properties are vacant for part of the year, Provincetown has an even higher proportion of seasonally vacant units. 

Alex Morse, Provincetown town manager, explained that to address issues, leadership has narrowed in on a number of initiatives in the past two years, including increasing local incentives, upping property tax exemptions, approving zoning changes, establishing year-round deed restrictions, making use of the public property inventory, collecting data on sewer and wastewater and short-term rentals, and broadening housing efforts for seasonal workers.

At special and annual Town Meetings, Provincetown voters have approved a slate of housing articles, including amending the rooms tax receipts distribution to go toward a new category dedicated to housing efforts.

Unlike most Martha’s Vineyard towns, where 100 percent of lodging fees enter the town’s general fund and have yet to be distributed for any specific purpose, 30 percent of all rooms tax collected by Provincetown is allocated to housing initiatives through its housing trust. 

That effort, Morse said, “was a very clear example of the town saying, ‘We have other tools at our disposal to reallocate that money to what our priorities are.’” 

Also unlike Vineyard towns, which collect more money through taxes on short-term rentals (Airbnb and VRBO) than from that on traditional lodging like inns and hotels, less than half of the rooms tax collected in Provincetown comes from short-term rentals.

In addition to the rooms tax collections, Provincetown has upped its certificate fee for short-term rental registration — something Island towns have yet to create. Alone, those funds exceed $1 million in additional collections per year.

Still, the town has adopted a 3 percent community impact fee for short-term rentals, along with amending local zoning bylaws to allow housing projects in the commercial district to have a fourth story. 

Provincetown has also created a year-round market-rate housing trust through a 2016 home rule petition, which allows the town to use both town funds and private funding to pay for the cost of market-rate housing. This statute has also allowed the town the option to alter its definition of market rate, which has been changed to 80 to 200 percent area median income (AMI). This is meant to help include residents whose income may have been too high to qualify them for affordable housing in the past. 

Provincetown and Nantucket, similarly faced with complicated housing problems, both have housing trusts capable of serving community members with AMIs up to 200 percent. Currently on the Vineyard, town housing trusts max out at 150 AMI.

At last year’s town meeting, voters approved a warrant article devoted to purchasing private property for $1.5 million that would be used for future housing development. They also approved funds to hire development consultants to look at town-owned properties and their potential for housing development. 

This year, Provincetown voters approved $3 million to go to an additional community project. Those funds were made available through lodging taxes or room fees. They also voted to fund the conversion of a defunct firehouse into town employee housing, expand the residential tax exemption for year-round rentals, and to allow the housing trust to enact year-round housing occupancy restrictions. 

In Provincetown, the Massachusetts Subsidized Housing Inventory, which measures low or moderate housing stock throughout the commonwealth, is only half of a percent away from the recommended 10 percent. Not even including in-progress projects, the town boasts the highest percentage of subsidized housing throughout Cape Cod. In contrast, the town of Oak Bluffs, the site of a handful of affordable housing developments, is currently at around 5.5 percent. 

In the near future, Provincetown leadership will be looking to adopt a bylaw regulating fractional ownership, banning corporations from obtaining short-term rental certificates, and exploring possibilities of an accessory dwelling unit program.

Although a few Vineyard towns have begun discussions on some of those items, they’ve yet to make significant headway.

Similarly, millions of dollars generated through rooms tax on the Vineyard has yet to make its way to affordable or attainable housing initiatives. 

But in Provincetown, the money approved by voters to go annually into the town’s housing trust means that allocations don’t have to be approved every year at Town Meeting. It’s “a guarantee in perpetuity that there’s going to be money dedicated to housing, even if the current policy leaders aren’t going to make those decisions,” Morse said.