The Housing Hail Mary

We are all familiar with the law of supply and demand. When demand is high and supply is low, costs are high. But if you increase supply, costs go down. This is Economics 101 stuff. It makes perfect sense. 

Until you come to Nantucket. 

Here, demand outpaces supply to such an extent that, except in cases of extreme recessionary situations, the cost has never really gone in the opposite direction — even though the island has added about $250 million worth of residential real estate to the market every year for the last 20 years. Affordable housing is continuously getting further and further out of reach.  

In short, anyone who thinks we can grow our way out of this problem is kidding themselves. 

Okay, hold that thought. 

At the 2016 Annual Town Meeting, we voted to create the Housing Bank home rule petition. If it becomes a law, it would set aside a 0.5% fee for every dollar of a real estate sale over $2 million (it only applies to the portion over $2 million). This could give the Affordable Housing Trust the financial backing to do something impactful. At the time, it was something of a Hail Mary thrown at the Massachusetts Legislature. Some folks around the island thought that it had little likelihood of passing because we send so many home rule petitions to the statehouse, lawmakers are beginning to see us as the municipality who cried wolf. 

The goods news: some new players have recently appeared on the field. Several municipalities like Boston, Brookline, and Somerville are now working with us and Cape and Islands State Rep. Dylan Fernandez. These other communities liked our innovative and forward-thinking home rule petition so much, they came up with their own versions and now are proposing a state-wide local option.

So now there’s a chance that our Hail Mary pass could be caught for a touchdown. (That is if the Massachusetts Association of Realtors doesn’t swat it to the ground first.)

This has gotten a lot of coverage off-island but not much in our local press yet. We are keeping a close eye on it.

But, as we said before, we can’t grow our way out of our problems. Even if our Hail Mary works and the Housing Bank comes into being, it’s no silver bullet. It will still be several years before it can have a real impact on affordable housing. There’s a lot more work to be done.

In other words, the game is not yet won. We’re just going into overtime. 

Have a great week. 

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