HARWICH — An effort to secure more housing for working people on Cape Cod took a step forward last week when the Cape Cod Commission announced it would hold a series of meetings to establish a nonprofit community land trust here. The first public meeting will be on Oct. 16, although the time and location have not yet been announced.
Establishing a community land trust was one of the key recommendations to emerge from the Commission’s year-long effort to produce a regional housing strategy, which it published in May.
Chloe Schaefer, chief planner at the Cape Cod Commission, said her organization would not run or control the new land trust; instead, it has brought on consultants to run the meetings that will guide “local stakeholders” through the process of forming one.
Two sessions at the Commission’s OneCape conference last week were focused on the project.
Nonprofit land trusts have been used in a variety of places, including Burlington, Vt. and Martha’s Vineyard, said consultant June McCartin of Outwith Studio. They aim to purchase properties at somewhat reduced prices and then resell them to year-round residents at greatly reduced prices, she said.
In such sales, the land trust retains ownership of the land and sells only the home and a “ground lease” to use the land. Because land is about half the cost of residential property in many coastal markets, such arrangements can make possible sales at a steep discount compared to market-price housing.
In places like the Outer Cape, where annual incomes of $400,000 or more can be required to afford a median-priced single-family home, being able to offer stable housing at below-market prices is now seen as a key strategy for retaining a working population.
“The business that we’re going to have to get into in a place like Nantucket and on the Vineyard and the Outer Cape is not just affordable housing for people making below-median incomes,” state Sen. Julian Cyr said in a speech at the conference. “The path before us in the coming years is that we’re going to have to subsidize housing for all year-round working people who don’t already own a home or stand to inherit one.”
“Peer communities” such as Aspen and Vail in Colorado and Truckee in California have successfully created a “middle market of year-round housing” to address their housing crises, Cyr said.
Purchasing year-round occupancy deed restrictions, or requiring them to be included in new developments, have been the primary strategies in Aspen, Vail, and Truckee, but the Commission identified a nonprofit community land trust as an important parallel strategy for developing “middle-market” units.
On Martha’s Vineyard
The Island Housing Trust on Martha’s Vineyard has developed 156 units of below-market housing since 2006 and is currently developing another 150 units, said Philippe Jordi, CEO of the Trust, in another speech at the OneCape conference.
The nonprofit has been able to buy properties at below-market rates because the value of the discount from the market price can be considered a charitable donation for tax purposes.
In such “charitable sales,” Jordi said, some owners are able to “sell their homes at less than market price and capture the difference in tax deductions.”
In one such case, the Island Housing Trust purchased an eight-room guesthouse for $950,000 in 2019 and then spent another $950,000 renovating it into seven apartments that are now run as rental housing for year-round Islanders.
The Trust renovated a second guesthouse and rented it directly to Martha’s Vineyard Hospital as employee housing, Jordi said.
The Trust has also built clusters of duplex and single-family homes on land it purchased at a discount, selling the structures to year-round families at below-market prices while retaining ownership of the land.
Banks can lend money for those homes, and the federal government has published guidelines on how mortgages involving community land trusts should be written and sold.
The pace of development has been limited by funding sources, Jordi said. The Island Housing Trust has primarily been financed with Community Preservation Act funds from the six towns on the Vineyard, along with charitable donations and one-percent interest financing offered to the Trust by “social impact investors.”
Jordi and other leaders on Martha’s Vineyard lobbied hard for a local-option real estate transfer fee, he told the Independent in June, because it could have provided an exponentially larger funding stream to purchase and develop year-round housing.
The 156 units the Island Housing Trust has created are “nothing compared to what we could have done if we had the transfer fee 20 years ago,” Jordi said in June.
Neither the state House of Representatives nor the state Senate included a real estate transfer fee in their housing bond bills this year, although Cyr has told the Independent he expects the issue to return in next year’s legislative session.
If the eight Outer and Lower Cape towns were all to vote for a 2-percent transfer fee on the portion of real estate sales over $1 million, they could collectively raise $9.9 million per year, according to an online calculator created by the nonprofit Mass. Budget and Policy Center.
In a question-and-answer session at the conference, the Commission’s consultants said it was important that a broad spectrum of community members join the planning process for the community land trust, both at the Oct. 16 meeting and at a community land trust advisory council that would likely be formed afterward.
Laura Silber, housing planner for the Martha’s Vineyard Commission, said that getting town leadership on board was an important first step. In her experience, “It was engagement with the municipalities that brought the voters on board,” Silber said.