Over the past two decades, year-round rental apartments have all but vanished on the Outer Cape as their owners have discovered how much more lucrative it is to rent their homes and condos to visitors to our beautiful region in the summer and shoulder seasons. The advent of online rental platforms such as Airbnb and HomeAway (now VRBO) accelerated the loss of rental housing for people who live and work in our communities year-round.
A 2018 study, conducted by the Public Policy Center at UMass Dartmouth for the town of Provincetown, documented how workers cannot compete with visitors who are willing and able to pay premium prices for short-term rentals. The simple truth is that property owners stand to earn significantly more through short-term rentals than year-round market-rate rentals.
The study found that renting a unit on Airbnb every night from May through September could potentially net more than $34,000 annually. Renting that same unit year-round to a local worker for $1,300 per month generates only $15,600 in a year — a difference of $18,400. Even if the property owner rented that unit for only half of the summer season, it would still produce slightly more income than it would if the unit were rented year-round.
The only way to solve the year-round rental housing shortage is for local governments to intervene and address these market forces. Fortunately, our towns now have an important tool to counter this threat to the future of a viable year-round community.
The Provincetown Independent reported on Jan. 21 that the four Outer Cape towns collected over $3.8 million in new revenue thanks to the expansion of the rooms occupancy tax to cover short-term rentals of 30 days or less. While it may be tempting for town leaders to use this new revenue to fund growing town budgets, we believe it is critical to dedicate these funds to the creation of year-round rental housing to mitigate the impact short-term vacation rentals have had on the year-round housing market.
Despite significant challenges in siting and financing new, affordable rental housing, all four Outer Cape towns are working hard to address the lack of year-round rental housing for working families. More resources are needed, however, particularly to meet the needs of our low- and very-low-income neighbors, as well as families that earn too much to qualify for traditional affordable housing but still can’t afford housing prices that have been driven out of sight by the vacation rental market.
Time is running out for addressing our region’s rental housing shortage — a shortage that threatens the success of local businesses and the health of our year-round communities. We call on municipal leaders to dedicate a minimum of 50 percent of this new revenue for housing initiatives. This new funding stream will allow our towns to partner with developers to address the broad range of housing needs on the Outer Cape and ensure that year-round, affordable housing is available for a diverse populace.
From the senior struggling to live on Social Security, to the young family with two incomes earning too much for traditional affordable housing, too many of our neighbors who have grown up here or whose families have lived here for generations are now being priced out of the Outer Cape and forced to leave. We have a rare opportunity to make significant investments in the future of our towns by using the rooms occupancy tax revenues to leverage additional state and federal funding, and to bring an end to the housing insecurity that threatens so many residents.
Jay Coburn is CEO of the Community Development Partnership. Hadley Luddy is CEO of the Homeless Prevention Council.
