PROVINCETOWN — Time is running out for Borislav Ivanov and his family. On May 15, the lease expires on the Commercial Street apartment where he, his wife, Iliana, and their three-year-old son have lived since October.
Lease to Locals
MARKET-RATE RENTALS
Provincetown Takes Steps to Sell Harbor Hill
The town also allocates $348,500 to Lease to Locals program
PROVINCETOWN — The town is looking for a real estate broker to help sell or lease the town-owned apartments at Harbor Hill, the 28-unit former timeshare complex where 55 people now live.
An invitation for bids from qualified brokers that the town issued in January had a deadline of Feb. 15. Two brokers applied, according to Year-Round Market-Rate Rental Housing Trust chair and select board member Austin Miller: John Ciluzzi, owner of Premier Commercial, and Doug Grattan, president of the Christie’s International affiliate Atlantic Brokerage, which covers the Outer and Lower Cape and Nantucket.
Whichever broker is picked will have the job of recruiting outside parties that would rent units to “qualified applicants earning between 80 percent and 200 percent of the area median income” — the same income range the apartments are currently structured to serve. The invitation for bids also says any buyer would need to “maintain the property as a going concern serving the Provincetown community.”
The search for a new owner or leaseholder will be subject to Massachusetts 30B procurement laws, which means the rental housing trust will issue a request for proposals with “bids that will be public and openly debated, with no commitment to accept any,” said Miller. “The broker we are hiring will help to craft the RFP to meet our needs and attract a bidder at the right price, with the right commitment to the property and its mission.”
The bid invitation says that Harbor Hill would be conveyed with deed restrictions consistent with the legislation that created the Year-Round Market-Rate Rental Housing Trust — but it does not include details about how the rents paid by tenants at Harbor Hill would be set. That legislation gives the trust the authority to establish “alternative or additional definitions for ‘market-rate’ ” rent, however.
Members of the trust have disagreed about how much rent the tenants at Harbor Hill should be paying. They rejected a proposal last November to raise rents by several hundred dollars per month. Town Manager Alex Morse weighed in on that debate, telling trustees that the town had “a lot of resources at its disposal” and that the town’s goals at Harbor Hill were “less focused on what the rents would be and more focused on the incomes of people who live and work in town.”
Morse suggested that the trustees look at the income of the town’s median earners and work backward from there to a rent schedule rather than using current listings of rental apartments to define “market-rate rent.”
For the 55 tenants at Harbor Hill, how much rent they would have to pay a new owner would almost certainly depend on the wording of the town’s deed restriction.
The Community Builders, the nonprofit developer that is constructing 65 apartments, including four market-rate units at 3 Jerome Smith Road, conducted a study that found a “market-rate” rent of $1,480 per month for a one-bedroom apartment in Provincetown.
Just down the street at the old police station on Shank Painter Road, a redevelopment proposal from Christine Barker and M. Tatiana Eck for 40 market-rate apartments includes a rent schedule of $2,500 to $2,750 per month for a one-bedroom apartment.
The tenants in Harbor Hill’s one-bedroom units are currently paying between $1,040 and $1,550 per month. That means their rents could go up by $1,200 per month and still be considered “market-rate” under Barker and Eck’s rent schedule.
The legislation that created the Year-Round Market-Rate Rental Housing Trust gives it the authority to buy and sell property without a vote of town meeting. Miller said the trust will hold a public hearing to discuss any offers it receives to buy or lease Harbor Hill.
‘Lease to Locals’
The town is also moving forward with a program from Placemate.com called “Lease to Locals.” The company, founded by a former marketing director at Airbnb, provides subsidies to property owners to turn their short-term rental properties or vacation homes into year-round rentals.
“The idea of Lease to Locals is we are converting existing housing stock to new long-term rentals for the local workforce, and we are doing this in tourist towns around the country,” Placemate CEO Colin Frolich told the select board on Jan. 8. “Our strength is our ability to find vacation-home owners, second-home owners, short-term rental owners, property managers, and real estate agents and get them to do something that is different and that has a financial benefit to them.”
The subsidies are based on the number of tenants who sign a one-year lease and are funded by the town’s share of the rooms tax on stays in hotels and short-term rentals.
Placemates typically requires that tenants in their subsidized properties work in the county, but at their Feb. 12 meeting select board members said that people who work remotely but are involved in the town’s civic life should also be eligible.
Prospective tenants must earn less than 150 percent of the area median income in Barnstable County, which is $126,975 per year for a single person or $145,125 for a couple. The amount of the subsidy depends on how many working tenants are on the lease and ranges from $6,000 per year for one working person in a studio apartment to $20,000 for three working tenants in a three-bedroom unit.
The rent that property owners can charge for a property with a Placemate lease is also capped. Studio apartments may be rented for up to $1,600 per month; one-bedroom units may be rented for $2,200; two-bedroom units for $3,000; and three-bedrooms units for $3,800.
Select board members had initially worried that the rent caps were too high. At their Feb. 12 meeting, however, Morse said that using the “30 percent of income toward rent” rule — which derives from housing legislation introduced by U.S. Senator Edward Brooke III in 1969 — median earners would be able to afford those rents.
A person earning 80 percent of area median income would be able to afford $1,693 in rent, according to the 30-percent rule, while a person earning 100 percent of AMI could afford $2,116, Morse’s data showed.
The board accepted that argument and voted unanimously to move $348,500 in rooms tax money from the town’s Housing Fund to the Year-Round Market-Rate Rental Housing Trust Fund to pay for a one-year Lease to Locals pilot program. Trust members were set to vote on the program on Wednesday, Feb. 21, after the deadline for this edition of the Independent, with the program itself set to begin on April 1.
HOUSING
Workshop Offers a Preview of Town Meeting Agenda
Zoning changes and a ‘Lease to Locals’ program are on the docket
PROVINCETOWN — The town’s “housing workshops” — periodic joint meetings of four committees plus town staff that began in 2021 — have become a kind of drafting room for town meeting, a place where policy ideas can be discussed and refined before they are placed on the warrant for voters.
Proposals that have passed through these workshops have fared exceptionally well at town meetings, including the short-term rental bylaw that was written by town counsel and passed overwhelmingly by voters on Oct. 23.
In the wake of that vote and the town’s purchase of nearly an acre on Nelson Avenue, there was a relatively short agenda at the Dec. 4 housing workshop, which took under 90 minutes. Members of the select board, planning board, community housing council, and Year-Round Market-Rate Rental Housing Trust expressed a broad openness to the zoning measures and “Lease to Locals” incentive program that town staff presented.
The meeting opened with a discussion of the housing needs assessment survey that the UMass Donohue Institute is preparing to undertake next spring. The assessment is slated to cost $53,200 and will attempt to define how many units the town needs “to meet the demands of municipal employees, essential workers, year-round residents, and other target populations.”
Nearly every board that deals with housing has complained recently that it does not know enough about the income levels of various kinds of workers in town, making it hard to allocate resources between “affordable housing,” which serves people making up to 80 percent of area median income (AMI), and “market-rate housing,” which serves people making between 80 and 200 percent of AMI.
(In Barnstable County in 2023, the 80-percent-of-median-income threshold that divides “affordable” from “market-rate” housing was $67,700 for a one-person household and $77,400 for two people.)
The town currently has $1 million in rooms tax money allocated for housing, Town Manager Alex Morse said, and workshop participants agreed that to allocate that money wisely the town should know more about the people it’s trying to serve.
Several participants said the town should use the survey to ask how much rent people were paying in privately owned rentals in town — but not necessarily to develop a target for the town’s market-rate rentals.
“We need to collect data and understand the current market-rate rents — that’s valid, and we should know that,” said planning board chair Dana Masterpolo. “But I think we should start with the people who are currently without housing, the EMTs and police officers and schoolteachers, and ask what they earn.” Setting rents relative to those peoples’ wages “so that they can live, not just survive” should be the goal, she said.
“I agree,” said Morse, “and the goal of the survey is to collect income information and work backwards to find the appropriate rents for people that are housing insecure.”
‘Lease to Locals’
Provincetown’s Deputy Housing Director Mackenzie Perry described “Lease to Locals” — a cash-incentive and tenant-matching program designed to persuade the owners of short-term rental properties to lease their homes to long-term tenants instead.
“People would have to currently be using their property as a short-term rental, and then we would offer the monetary incentive for them to convert it into a year-round lease for folks who work in the area,” Perry said. There would be caps on what the owner could charge in rent, and there could be a bonus payment if the owner agrees to rent for a second year.
“We don’t think this will meet 100 percent of the need, but it could be a bridge to the new construction that’s slated to be online in a couple of years,” said Morse. Even one or two dozen new leases would be significant, he said.
Placemate.com, the company that administers the program, was founded in Truckee, Calif. by Colin Frolich, a former marketing director of Airbnb who moved to Lake Tahoe in 2018 and was surprised he could not find a year-round rental.
The financial incentives are typically funded with short-term rental tax revenue and range from $5,000 for a one-bedroom unit in Eagle County, Colo. to $18,000 for a one-bedroom unit on Nantucket.
Nantucket’s program began last August and is the first to be entirely funded by private donors. Additional rules state that the tenant must either work on the island or be disabled and cannot be employed by or related to the property owner.
“We’ve asked them to submit a proposal,” Morse said, “where based on other communities with a program, they do some predictive analysis on how many units we might get in the first year and what it would cost.
“Then that’s something we can all look at and tinker with” at the next housing workshop in January, Morse said, “and really consider if this is something we want to invest in.”
Zoning Measures
Community Development Director Tim Famulare presented six zoning measures, five of which would liberalize rules for the use of residential parcels.
One would allow small accessory dwelling units, or ADUs, to broach the setback areas at the edges of residential lots under the same rules applied to garden sheds. Another would allow two-family housing by right in the Res-2 district, rather than by special permit from the planning board, and three-family housing by right in the Res-3 district.
A third measure would slightly reduce the number of projects in the Res-3 district that require site plan review. A fourth would relax the lot size requirements that restrict the placement of two or three homes on a lot in the Res-2 and Res-3 zones, while a fifth would allow inhabited recreational vehicles on driveways in the Res-1 zone.
The sixth measure, an amendment to the town’s inclusionary bylaw, would increase the number of units required to be affordable in new residential developments from one-sixth (16.67 percent) to one-fifth (20 percent).
“I feel like I say this every time we come together, but I don’t think we should have single-family zoning in town anymore,” said select board member Austin Miller. “I think we should make this go a little further and have two-family, or two single-family dwellings, in Res-1 in addition to Res-2.”
Denser housing sells for less than single-family homes, Miller said, making it more “naturally affordable.”
Masterpolo asked for a bylaw that would specifically allow large market-rate rental projects, such as the one slated for the site of the old police station on Shank Painter Road, to be built. That project relied on a four-story allowance on Shank Painter that does not exist elsewhere in town, Masterpolo said, and it also had to include affordable units to qualify under the town’s inclusionary bylaw.
“I would say, ‘Stay tuned,’ ” said Famulare. The town is working with the Cape Cod Commission to develop a model year-round rental bylaw that could be ready in time for spring town meeting, he said.
Morse closed the meeting by asking the boards to come up with more ideas and send them to town staff before the January housing workshop.
“If there’s certain ideas or language you want us to take a look at, we’re happy to do some legwork and help them get to a better place,” he said.