PROVINCETOWN — The 28 apartments in the former timeshare complex at Harbor Hill will not be sold by the town — at least for now.
That’s the decision reached earlier this summer by the trustees of the Year-Round Market-Rate Rental Housing Trust after a year-long exploration of how to structure the sale.
Trust chair Austin Miller, who is also a select board member, told the board on June 10 that the trust’s decision came after the town’s bond counsel pointed out an issue with the bonds that financed the purchase in 2017.
“Because they are nontaxable municipal bonds related to community housing, if the housing were sold, the bonds would become taxable,” he said. The bonds can’t be repaid until June 2027. If the sale didn’t fully cover the outstanding debt, the town would have to allocate more money to pay them off — or reissue them as taxable bonds.
“This could all come up again in 2027, but it makes very little sense to sell the property prior to that,” Miller told the Independent.
Not the Usual Affordable Housing
The trust and the apartments it manages at Harbor Hill represent one of Provincetown’s most unusual efforts to respond to the housing crisis.
The complex is fully occupied — as of December, there were 46 adults, 8 children, 12 dogs, and 3 cats living there — but because there is almost no state or federal money available for median-income rental housing, the town has borne the costs of the purchase and of maintenance and management on its own.
Voters endorsed $10.7 million in borrowing to buy the apartments in 2017. Town meeting authorized $310,000 for roof replacement in April 2023, and more maintenance spending is ahead, according to Miller — about a million dollars for exterior walls is next on the list.
To avoid saddling townspeople with further costs, the trust began researching the possibility of selling the property last August and chose John Ciluzzi of Premier Commercial as its broker in April.
The idea, Miller said, was to deed-restrict the property to preserve its current mission: year-round rentals for people who earn too much to qualify for state-subsidized affordable housing but who still struggle to find a secure home in Provincetown. Year-round rentals have all but disappeared here, and the median single-family house price in 2023 was over $2 million, according to the Cape Cod and Islands Association of Realtors.
The trust’s charter is to address the housing needs of people who earn between 80 and 200 percent of the county’s median income; 80 percent of the median is $70,950 for a one-person household or $81,050 for two people, while the 200-percent threshold is $177,400 for one person and $202,700 for two people.
In preparing to advertise the complex, the trust wanted to leave the specifics of price and deed restriction as negotiables, Miller said — including whether the apartments should be limited to people in certain income brackets or how quickly a new owner would be allowed to raise rents on current tenants.
How to do that was what they hoped to discuss with Ciluzzi, Miller said: “What are the potential trade-offs between the public purpose of the project and avoiding displacement of current tenants versus how the town can recover its investment and redeploy those funds.”
Those trade-offs could have been measured in millions of dollars, as strong deed restrictions would likely depress the price buyers might have offered.
Bringing Management in-House
The decision to explore a sale had partly come about because the town has had trouble arranging for property management services at Harbor Hill.
The nonprofit Community Development Partnership was the only bidder on the town’s first request for services in 2018, and nobody bid when the town put out a new request in 2021, said CDP CEO Jay Coburn.
The CDP’s contract was extended under its original terms several times, but in August that agreement will end, and the town’s newly expanded housing office will handle Harbor Hill’s waitlist and income certifications. The town will seek bidders for a maintenance-only contract soon, Miller said.
Kristin Hatch, who has been the part-time executive director of the Provincetown Housing Authority since 2018, was hired for a part-time position supporting the trust and the housing office in March. Like Rachel Butler, who was hired by Eastham to help manage that town’s affordable housing, Hatch has years of experience with the arcana of income certification and procurement law.
“I called Rachel shortly after I was hired, and she said that Eastham had taken property management in-house and was also using rental income from the town-owned units to help pay the salary of a new person in their DPW who does maintenance at their properties,” Hatch said.
“I think it would take time to do something like that, and we need to go out for proposals for maintenance right now,” she said. “But I do think in-house work is like paying a wholesale price while going out to bid is like paying the retail price.”
Coburn said that there are risks to towns that go into the property management business, particularly when key people retire. The nonprofit Preservation of Affordable Housing has 30 staffers doing property management on Cape Cod, he said. “There’s redundancy there, a deep bench of people,” which Provincetown and Eastham won’t have, Coburn said.
