Last week the Inquirer & Mirror reported on our short-term rental bylaw article to help protect year-round housing and island neighborhoods. Here’s a letter ACK•Now’s Chair, Tobias Glidden, sent to the Letterbag in response:

To the Editor,

Your recent coverage of the licensing bylaw proposed by ACK•Now to stem the impacts of short-term rentals on the community did not explain to readers what the bylaw is all about and led them into thinking it would unfairly impact year-round residents.

After months of research, here’s what we know. Investor-owned short-term rentals changed the vacation rental scene. They are a new breed of investors looking to turn homes into short-term rental businesses. It’s a phenomenon across the island – did you know one company owns 14 properties and pays residential tax rates? Most people agree investors buying up the housing supply is terrible for year-round housing, terrible for the peace and tranquility of neighborhoods, terrible for the community, terrible for the environment, and terrible for the long-term economy.

So what can we do about it? We can’t stop anyone from buying property on the island. But the voters can put reasonable limits on the way a property is used. After all, most short-term rentals are businesses operating in residential areas. That’s where our licensing bylaw is a proposal to help us regain control of the housing supply, of neighborhood quality of life, and our community.

It goes to great lengths to ensure a year-round resident can rent his or her home to make ends meet while giving them an edge when buying a home. It offers a second homeowner the opportunity to offset some of the costs of a vacation home.

Many other cities, towns, and resort destinations have short-term rental programs, and it works – look at Boston, Salem (MA), and Kauai (HI). We are counting on the community of the island to acknowledge the damage from investor-owned short-term rentals. We are also appealing to realtors to realize reasonable limits are necessary to preserve this community for future generations.

Thank you, Tobias, and thank you to all those who help us by sharing their time, advice, and feedback.

Enjoy your week,

Julia Lindner
Executive Director

After months of researching the transformation of the short-term rental market, lessons from communities across the country, the impacts on Nantucket, and potential approaches for this unique island, we’re ready to share a proposed solution. It’s a local bylaw that will be put before Nantucket voters at the annual town meeting in the spring – all explained in this guide (just click the picture below).

The goal is to foster traditional Nantucket vacation rentals by homeowners while protecting year-round housing and island neighborhoods.

Thank you to all of those who helped us with their advice and feedback. Now the road to Town Meeting begins. We look forward to it! 

Enjoy your week,

Julia Lindner
Executive Director

ACK•Now’s Executive Director, Julia Lindner, met with Monday Scoop host and Sconset resident, Georgia Raysman, to discuss how Airbnb has changed the vacation rental market, the impacts on housing, and neighborhoods, and the tools available for communities. Click the photo below to watch the full interview. Please share it with friends and family.

We hope you enjoy the rest of your week.

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

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

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’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

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

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