ACK•Now Announces New Leadership Focused on Sustainable Future for Island Community.

Nantucket, Massachusetts – October 23, 2020 – ACK•Now announced a new board chair who will help support the organization’s work to improve Nantucket’s quality of life.
 
Tobias Glidden, who has served on the board since ACK•Now’s launch in 2019, will serve as its new board chair. He is a local business owner with a long family history on Nantucket. He served on the Select Board and focused on improving the island’s sustainability and its community. 
 
“Tobias is a passionate steward of the island,” said Executive Director Julia Lindner. “His deep involvement in the community and personal commitment to living sustainably, Tobias walks the talk. He will strengthen our connection to a younger generation of islanders and to the place we are striving to protect.”
 
Glidden said, “It’s exhilarating to be part of a local organization that is willing to tackle a vision for the next phase of the island’s future – protecting its community while growing its economy in a healthy way. Nantucket led the way by conserving open space, which is why it remains such a beautiful place today. Now more needs to be done to protect the island’s future and its people.”
 
Glidden replaces David Worth, who resigned from the board to take part in the purchase of Nantucket’s local newspaper, the Inquirer and Mirror.
 
Worth said, “It’s been an honor to take part in the creation of ACK•Now. I’m confident that Tobias’ leadership will help the organization to raise awareness and deliver positive solutions for the community.”
 
Glidden added, “On behalf of the board, I want to express our gratitude to David Worth for his contributions to the organization.” 
 
Glidden will serve on the board along with other active members – Bill Liddle, partner in a local real estate firm, Peter McCausland, long-time summer resident and founder of the multinational Airgas, and Linda Holland, pioneer in environmental protection and retired Nantucket Land Council Director. 
 
About ACK•Now: 
A dynamic nonprofit organization with strong leadership, a small, energized staff, an active, engaged board of residents, and a clear direction, ACK•Now’s mission is to serve as a catalyst to engage thought leaders, stakeholders, and community members and bring new, actionable ideas to Nantucket. ACK•Now aims to do the hard work required for change — to ensure that ideas are embraced and actively supported, politically and financially — by both year-round and seasonal residents. The organization’s sincere hope is that, working together, we will improve the quality of life on Nantucket.
 
Contact:
Julia Lindner
28B Easy Street
PO Box 569
Nantucket, MA 02554
508-228-7500

Two types of STRs.

Our research shows communities typically put short-term rentals in one of two buckets: (1) homes that exist primarily to house residents (aka owner-occupied) and (2) investor-owned properties that exist to be rented. With the rise of Airbnb and VRBO, communities around the country have seen a shift in their housing supply towards investor-owned short-term rentals. Residents find themselves competing with investors for properties in residential neighborhoods. It’s not surprising investors generally outbid residents.

There are countless examples of places with stricter rules for investors and more relaxed ones for owner-occupied STRs.

In 2018, after seeing investors buy large quantities of housing units, Boston passed a ban on investor-owned STRs. Mayor Walsh said the city’s goal “has always been to responsibly incorporate the growth of the home-share industry (…) to create affordable housing for all by striking a fair balance between preserving housing while still allowing Bostonians to benefit from this new industry.” Today, only owner-occupied units can apply for a short-term rental permit.

On the other side of the country, Long Beach, CA, is also adopting a short-term rental ordinance that limits the impact of STRs on housing. It includes a registration process for all STRs and a cap (rather than a ban) of investor-owned STRs. Local government surveyed residents and got feedback from stakeholders before crafting a solution.

Why are there accommodations for owner-occupied STRs?

For one, allowing residents to rent their home (or a portion) can help them afford the house in the first place. Another reason is the owner is part of the community. We spoke to a company that monitors STRs for municipalities. It usually sees better compliance and fewer complaints from owner-occupied rentals, probably because owners are familiar with local ordinances and better connected to their neighborhoods.

The goal in trying to distinguish between investor-owned and owner-occupied STRs is to help solve the housing crisis – like the one on Nantucket.

Imagine if we could turn just 10% of the island’s roughly 2,000 STRs into homes. We could create 200 long-term rentals or home buying opportunities for islanders without building a single house. 

Enjoy your Sunday.

Julia Lindner
Executive Director

The road to housing leads to investor-owned short-term rentals.

Anna is our Community Outreach Specialist, and she’s one of the countless year-round residents aspiring to homeownership on Nantucket. We’re grateful she’s sharing her experience.

After being on island for seven years, I thought I knew why owning a Nantucket home was so difficult. But our team’s research made me realize just how much investor-owned short-term rentals contribute to our housing shortage.

A good portion of the short-term rental inventory comes with “exclusive” amenities and accommodates 12 to 20 or more. The number of properties equipped with a pool, a guest cottage, a bathroom to every bedroom, etc. is staggering.

When I look closer, I recognize some of the houses that were for sale three to five years ago. They were listed between $900,000 and $1 million. They were “affordable.” My husband and I weren’t ready to buy at the time, but I thought, “maybe we could buy a house someday.”

Now those same houses are on Airbnb, completely modified to attract large parties and weekend warriors. Cato Lane is just one example of a street that is being transformed.

In 2015, a long-time Nantucket family home on Cato Lane sold for $1.4 million – within reach of some given the cottage could bring steady rental income.

Instead, an out-of-state commercial property manager purchased it, improved with a pool and updated finishes, and turned into a short-term rental. There’s no debate; it’s now beyond the means of a year-round resident.

Further down the street, a property for sale is advertised as a great investment opportunity, with room for a pool and cabana. Most houses on the market either have a pool or are advertised as having room for one. What will happen to these properties?

Once they have pools and fancy interiors, they won’t be in reach of residents like us. Will anyone live in these houses, even part of the time?

It’s no question our housing crisis is complicated to solve. But when looking at short-term rentals in year-round neighborhoods, you start wondering if the cycle will ever end. That’s why we need to consider more ways to put our community first.

Sincerely,

Community Outreach Specialist

We need your help.

We’ve taken you with us on a journey to learn about the impacts of short-term rentals on Nantucket. Now it’s time to share this knowledge with the broader community.

That’s where you can help.

Please send this Fact Sheet to 10 of your friends. Invite them to join ACK•Now’s subscriber list. 

Change will come if we work together.  Thank you!

Enjoy this amazing Labor Day,

Julia Lindner
Executive Director

Options for commercial short-term rentals.

Nantucket is attracting big businesses and investors to the short-term rental market. It’s exacerbating the housing crisis, disrupting the quality of life in neighborhoods, and straining the infrastructure and environment. The pandemic and aftermath will likely accelerate this trend. 

But what are the community’s options?

That’s the good news. Massachusetts offers municipalities a solid framework to regulate short-term rentals. More importantly, it can be customized – even to an island 30 miles out to sea.

The menu of à la carte options includes:

  • A licensing program,
  • Owner-occupied requirements,
  • Location and number of licenses issued,
  • The number of rental days or frequency in a year,
  • Zoning enforcement,
  • Compliance with fire, health & safety codes.

Nantucket’s approach should reduce short-term rentals’ impact on the housing crisis by deterring investors from taking over the local housing supply. In turn, a solution should allow residents to rent their home to compete in the housing market. This strategy would create a more resilient community and economy, help neighbors coexist, and reduce pressures on the island’s infrastructure and natural resources.

Noteworthy 
The gap between what a year-round resident can afford, and what an investor is willing to pay for a property is enormous. Some thoughtful individuals have focused on developing incentives to convince owners to rent year-round instead of short-term. But the gap is too large. Renting on a short-term basis doesn’t only bring in more money; the tax code treats active income (i.e., short-term rental business) very differently than passive income (i.e., long-term rental). It’s a critical reason why a policy addressing short-term rentals is an essential part of the housing solution.

Enjoy your Sunday,

Julia Lindner
Executive Director

Putting Nantucket ahead of investors.

We’ve mentioned that off-island individuals and businesses own 80% of the 2,000 short-term rentals registered with the State. A significant portion are investor-owners who decide Nantucket should be part of their rental portfolio. This group of owners, in particular, puts significant pressure on the island’s housing supply and cost, neighborhoods, infrastructure, and environment. 

But not every investor is alike. Let’s explore a few of the business models out there.

Real estate developers and managers.
This group buys and manages real estate to turn a profit. The Copley Group is the most obvious example – it owns 14 “homes” that can accommodate 140 people. Many smaller companies hold one or two short-term rentals on Nantucket part of a broader real estate portfolio on the mainland. One company out of Plymouth, for example, owns a rental on the island, commercial property on the mainland, and a small restaurant group.

Destination clubs.
Introduced in the late nineties, membership-based destination clubs give members access to luxury homes and hotels. One of these is Exclusive Resorts. It offers its 4,000 members access to over 370 properties worldwide, including three on Nantucket. In turn, members pay an initiation fee plus a flat nightly rate. The club owns most of its properties, but also leases others from owners. 
Inspirato, on the other hand, advertises 156 properties on its site, including seven on Nantucket. Our research suggests the company enters into long-term leases with property owners, then it turns around and offers access to members for shorter-term stays. Inspirato charges a recurring monthly fee of $2,500 to $5,000 based on the frequency of travel.

There are other examples of property management companies that enter into seasonal or long-term leases with owners and avoid having to put up the capital needed to purchase short-term rental properties.

Regardless of the model, these are businesses that operate mini-hotels in residential neighborhoods. What’s more is they pay residential property tax rates while commercial property owners pay 1.7x higher taxes. 

If we keep the floodgates open, investors will turn this place into precisely what they suggest – a club, a transaction, an investment.  

At its core, Nantucket is a lifestyle and a community. It’s time we put this beautiful island first.

Enjoy your week,

Julia Lindner
Executive Director

Off-island owners dominate the market.

Since first publishing our white paper, people in the community have asked thoughtful questions like, who owns the nearly 2,000 short-term rentals registered with the State? And, how many of these have the potential to be housing for year-round residents?

The answers are surprising. Going through the registry and identifying each short-term rental owner shows nearly 80% are off-island residents.

Only one out of five rentals belongs to an island resident – a combination of residents who rent their own home (i.e., part of the time or part of the house) and a few whole-house rentals.

Why are so many investors coming to Nantucket to invest in short-term rentals? If you understand the IRS tax code, you know why investors everywhere in the country have targeted short-term rentals. When treated like a business, they offer significant advantages, including substantial income tax savings each year, and a property that pays for itself over time. The investment proposition is attractive.

There is strong evidence that investors have transformed formerly year-round homes into short-term rentals. In the last ten years, the island lost many hundreds of year-round rentals while the number of vacant housing units grew by nearly 1,100.1 Many properties were upgraded to suit large visitor groups (pool, more bedrooms, more bathrooms), while others stayed largely the same before being listed as rentals.

What’s noticeable is the number of investor-owned rentals that have infiltrated traditionally year-round neighborhoods: Cato Lane, Somerset Rd, Gray Ave, Brinda Lane, and the list goes on.

Given the impacts of this commercial activity on the availability and cost of year-round housing and our infrastructure, environment, and community, Nantucket voters can and should address this critical issue. More on this soon.

Enjoy your Sunday evening,

Julia Lindner
Executive Director

1Office of Policy Development & Research, ACS data (2010-2018), July 2020: https://www.huduser.gov/portal/MCCharts/countyCharts_hc_new.html?countyID=25019&countyName=Nantucket%20County,Massachusetts&dt=July%2017,%202020.

Talking short-term rentals with the Health Director.

In our last newsletter, we discussed how Nantucket lost over 600 year-round rentals from 2010 to 2018 – the same period during which Airbnb ballooned from 2,500 to millions of listings worldwide. A growing number of investors buying properties to turn them into short-term rentals has impacted our community, housing, infrastructure, and environment. But what about our Town resources?

We spoke with Nantucket’s Health Director, Roberto Santamaria, about his relationship with short-term rentals. While neighbors might call the police to complain of late parties, the Health Department receives calls from the renters themselves. Roberto says, “although this year has been quiet, we normally receive 3-5 calls from renters every week in the summertime.” They call to report problems with properties ranging from rodents, mold, lack of running or hot water, to broken appliances. He added that issues typically arise when owners or managers are not on the island to monitor properties.

The result? Numerous time-consuming site visits. There are times when Roberto’s team must contact the police to track down a property owner’s phone number.  

The Town licenses local hotels and inns, so there’s a system in place to easily communicate with each owner and manager. That’s not the case with short-term rentals. Going forward, it seems essential to have a way to share time-sensitive information, such as health and hygiene guidelines, or quarantine requirements for out-of-state travelers. 

Establishing local short-term rental resources, including a registry, would benefit our community, visitors, as well as the Town.

Enjoy your Sunday,

Julia Lindner
Executive Director

Are investor-owned rentals behind the housing crisis?

In New Orleans, San Francisco, and even in Martha’s Vineyard, housing advocates agree that short-term rentals have displaced long-term rentals for many years. Islanders know how difficult it is to find a decent – forget affordable – year-round rental. It’s harder than ever.  

But what do we know about what’s been happening?  

From 2010 to 2018, the Census Bureau estimates that Nantucket lost over 600 year-round rental units – even though we built hundreds of new houses, adding 573 units to the overall housing market. That means the Island is losing on average 65 year-round homes each year. Yet the population keeps growing. It’s like being stuck in a game of musical chairs where we keep adding new players.

What shifted is the split between year-round and seasonal housing, meaning many year-round rentals were converted to seasonal homes or short-term rentals.1 Based on the number of short-term rentals registered with the State, what happened seems undeniable.   

What’s it been like for struggling islanders looking for a place to live?  

Ask Lizza – a part-time teacher and small business owner. She shared her journey in finding housing that began after returning from college when her parents decided to move off-island. Lizza moved more than a dozen times in about as many years. She’s lived it all: basements, couch surfing, outrageous rents, no kitchen or insulation, outside bathroom and shower, etc. Yet she feels lucky compared to others. After a long search finding only rooms in shared homes ranging from $1,500-$2,500/mo, she came across a local highschool friend who offered her a reasonably-priced room in a stable year-round rental. There’s no threat of the seasonal shuffle anymore, no threat of having to move away from her hometown. 

We’ve talked about how STRs are businesses in residentially zoned districts; about their impact on our neighborhoods, infrastructure, and environment. Lizza’s experience is not unique. It is the story of how investor-owned STRs have depleted the supply of affordable homes for year-round residents. There are many reasons why Nantucket needs to limit and regulate STRs, and helping islanders find and keep real homes is a big one.

Enjoy your week,

Julia Lindner
Executive Director

1 Office of Policy Development & Research, ACS data, July 2020:
https://www.huduser.gov/portal/MCCharts/countyCharts_hc_new.html?countyID=25019&countyName=Nantucket%20County,Massachusetts&dt=July%2017,%202020

Communities monitor STRs with online solutions.

Last week, we obtained an updated list of Nantucket’s short-term rentals registered with the State. The list is now close to 2,000 STRs.

With so many STRs, how would the Town enforce any regulations?

There’s an easy answer. In the last decade, several online solutions have emerged to help municipalities with short-term rental compliance. It’s good news for towns and cities everywhere with limited staff and resources, property owners who need to register and comply, and neighbors who live next to a disruptive STR. 

One of these solutions, LodgingRevs, serves over 50 communities, including Telluride, Aspen, Maui, and Big Sky. Their customized packages offer services to:

  • Identify short-term rentals by scanning listings on Airbnb, VRBO, realtor sites and others
  • Automatically notify property owners about the online licensing process and bring them into compliance
  • Give government staff access to dashboards, reports, etc.
  • Offer a 24/7 hotline for support and complaints

Every STR registered in the database also has an emergency contact on file – someone who can quickly get to the property if there’s an issue to resolve. Last week’s front-page story in the Inky described how the Health Director had to fine the owner of 2 Atlantic Ave who rented to guests that refused to comply with emergency orders over the Fourth of July. Access to a database with property owners and contact information is needed.

Enjoy your week,

Julia Lindner
Executive Director