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,
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.