Appeal for Nantucket fee for affordable housing hits roadblock

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BOSTON >> Nantucket community leaders on Tuesday pressed legislators to support a proposed real estate transfer fee without which, they said, the island town's year-round economy and its ability to provide basic services could vanish.

The proposal, taking the form of legislation (H 4317) approved at this year's town meeting, would establish a 0.5 percent surcharge on the difference above $2 million of any sale of property over $2 million, to be paid by the seller. That money would go into a trust fund that Nantucket officials said would be used to increase the stock of affordable housing on the island. Opponents argued the charge would only drive home prices higher as the entire state deals with a shortage of affordable housing.

"The housing crisis on Nantucket is challenging and threatening our ability to provide basic public safety services on the island," Jim Kelly, chairman of the Nantucket Board of Selectmen, said. "It also threatens the viability of having a long-term, year-round community on Nantucket."

Kelly said Nantucket has trouble recruiting and retaining firefighters because it is often too hard to find a place to live. Last weekend, he said, a "monumental fire" tore through a laundry facility on the island. All 12 available firefighters responded and the fire was contained after several hours, but a mainland community would have had at least 20 firefighters responding to a fire of the same size, he said.

The housing crunch also threatens businesses, like luxury knitwear purveyor Isobel and Cleo. Owner Charlotte Hess told the Joint Committee on Municipalities and Regional Government on Tuesday that she currently spends $16,000 annually to subsidize housing for one employee. Hess said she and employees have previously slept in the store because they had no other place to live.

"The time has come where I have to decide if staying on Nantucket is a deterrent for my business. If changes don't happen soon I will, too, have to leave," she said. "Though my own departure may not be felt by the community, I am one of many ambitious youths that are slowing continuing to disappear and our presence as a whole will be felt."

Janet Schulte, executive director of the Nantucket Island Chamber of Commerce, said the island's economy is driven primarily by tourism and vacation homes, which account for 64 percent of the island's 11,000 houses.

"Each second home requires seven to nine people to keep it going throughout the year. That's a lot of jobs on Nantucket," she said. "That economy and our community is in danger because there is no place to house those workers. The basis of the sound economy and a thriving community is the presence of a reliable, well-trained and available workforce and their families."

The Massachusetts Association of Realtors spoke in "strong opposition" to the bill, saying that while there is no question Nantucket and many other communities need more affordable housing, "creating a new tax is not the answer."

"The legislation would single out home buyers and sellers to pay for something that should be taken on by the entire community," Annie Blatz, MAR president, said. "The proposal is inherently inequitable and discriminatory as it would single out this small segment of the population, specifically home sellers, to pay for a community-wide need and responsibility."

With a median home sale price of roughly $1.8 million, Nantucket realtor David Callahan said adding a fee on top of the 2 percent land bank fee home buyers already pay would drive prices even higher.

"I don't think this is the right move or approach," he said. "Homes are already costly on Nantucket and this new tax proposal will increase the cost of home ownership and, by doing so, create an additional barrier to entry ... this will most likely result in increased prices for an already expensive market."


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