Short-Term Rentals

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Additional Reference Material



The Economics of Fiber

The Economics of FiberWe’re all online these days. Working from home and accessing classes online is our only option. Not to mention, relying on the internet and cellphones to get in touch with loved ones. 

But how’s that working on Nantucket? Having spotty service is a common thing here. Lots of frozen Zooms and choppy conversations. Many have come to accept this as a quirk of living 30 miles out to sea. But maybe it takes a crisis to bring about change.

That’s where OpenCape comes in. 

OpenCape is a nonprofit out of Barnstable that operates an open-access fiber-optic network serving local governments, businesses, and residents of Southeastern Mass, the Cape & Islands. By acting as competition to traditional internet providers, OpenCape has improved service and brought down pricing for its customers. We spoke with CEO, Steven Johnston, and it just so happens Nantucket is high on his priority list.

Steven explained that laying fiber-optic cable across the Nantucket Sound is a lot easier and cheaper than adding a third electric cable. He estimates it would cost $6.5 million to bring “unlimited capacity” to Martha’s Vineyard and Nantucket. From there we could go one of two routes. We could follow in the Cape’s footsteps and grow organically by connecting businesses and others who can afford to run lines. Or, we as a community could build and operate our own network. Just like Westfield, MA. 

Westfield saw the opportunity to invest in a fiber-optic infrastructure as a necessity, like gas and electricity. Today, town-owned Whip City Fiber provides broadband access to over 70% of the community. The demand is so high it’s expanding to neighboring towns. As one resident put it: “It’s a valuable, locally owned utility. No rental fees for equipment, one flat rate month to month with no surprise charges.” It’s fast enough that many customers have gotten rid of cable altogether.

Fiber is also the key to reliable cell phone reception. In fact, it’s critical to 5G mobile networks.  

How much would it cost to build an island-wide network? The CEO of OpenCape thinks between $15-$20 million. Add the cost of laying the cabling in the Sound, and we have an island on fiber for under $30 million. Not out of reach when compared to sewer projects.

Why do we need a stronger connection to the world? Fiber-optic is an economic development tool. We need it to improve a small business’ ability to operate, grow career opportunities for islanders, raise the standard of living, and over time diversify the economy beyond tourism and construction. 

Ultimately, it’s one more step towards a more resilient island. 

The Economics of Fiber

We’re all online these days. Working from home and accessing classes online is our only option. Not to mention, relying on the internet and cellphones to get in touch with loved ones. 

But how’s that working on Nantucket? Having spotty service is a common thing here. Lots of frozen Zooms and choppy conversations. Many have come to accept this as a quirk of living 30 miles out to sea. But maybe it takes a crisis to bring about change.

That’s where OpenCape comes in. 

OpenCape is a nonprofit out of Barnstable that operates an open-access fiber-optic network serving local governments, businesses, and residents of Southeastern Mass, the Cape & Islands. By acting as competition to traditional internet providers, OpenCape has improved service and brought down pricing for its customers. We spoke with CEO, Steven Johnston, and it just so happens Nantucket is high on his priority list.

Steven explained that laying fiber-optic cable across the Nantucket Sound is a lot easier and cheaper than adding a third electric cable. He estimates it would cost $6.5 million to bring “unlimited capacity” to Martha’s Vineyard and Nantucket. From there we could go one of two routes. We could follow in the Cape’s footsteps and grow organically by connecting businesses and others who can afford to run lines. Or, we as a community could build and operate our own network. Just like Westfield, MA. 

Westfield saw the opportunity to invest in a fiber-optic infrastructure as a necessity, like gas and electricity. Today, town-owned Whip City Fiber provides broadband access to over 70% of the community. The demand is so high it’s expanding to neighboring towns. As one resident put it: “It’s a valuable, locally owned utility. No rental fees for equipment, one flat rate month to month with no surprise charges.” It’s fast enough that many customers have gotten rid of cable altogether.

Fiber is also the key to reliable cell phone reception. In fact, it’s critical to 5G mobile networks.  

How much would it cost to build an island-wide network? The CEO of OpenCape thinks between $15-$20 million. Add the cost of laying the cabling in the Sound, and we have an island on fiber for under $30 million. Not out of reach when compared to sewer projects.

Why do we need a stronger connection to the world? Fiber-optic is an economic development tool. We need it to improve a small business’ ability to operate, grow career opportunities for islanders, raise the standard of living, and over time diversify the economy beyond tourism and construction. 

Ultimately, it’s one more step towards a more resilient island. 

Happy Mother’s Day. 

Julia Lindner
Executive Director

Community Resilience

Attempting to get back to normal feels strange right now. While we recognize the preoccupation with getting back to work and opening the island, we also believe this represents a good time to (re)think the future.

Let’s start with a question.

Are we responsible for planning and paying for infrastructure that will benefit the community decades or generations from now? After all, our water system, sewer system, and road system were all built 100 years ago.

It’s been a topic of discussion for the Coastal Resiliency Advisory Committee (CRAC). The committee’s mission is to provide the Town and community thoughtful guidance and data-driven information, all of which consider coastal resilience. But as Chairwoman Mary Longacre explained, “The entire island is affected in one way or another by the impacts of climate change when it comes to public infrastructure and private development, not just coastal areas. “

At last year’s Annual Town Meeting, voters authorized the spending of up to $550,000 on coastal resiliency planning. The Town’s Coastal Resilience Coordinator, Vince Murphy, sought input from the CRAC to put together an RFP seeking consultants to conduct an island-wide analysis, including a risk assessment and proposed solutions. The public will have the chance to weigh in.

Wetland expert and Nantucket Conservation Foundation’s appointed representative on the committee, Jen Karberg, explained that potential solutions could target a specific area or the entire island. They might be innovative physical solutions or more traditional ones, such as suggested changes to zoning, regulations, or upgrades to infrastructure. She mentioned the importance of addressing our transportation network running through downtown in a corridor, particularly at risk (e.g., Washington St).

Before the virus, the committee was getting ready to formulate recommendations to Town boards (e.g., ConCom, Planning Board, Select Board). In essence, while the consultants are hard at work, there is an opportunity to integrate the current science (erosion, storm surge and sea-level rise data) into the planning of private development and public projects.

We see strong potential in the approach of the CRA Committee. Planning and building on the island should always have the future in mind. As Mary put it, “It’s everyone’s responsibility to invest in the community and the future history of Nantucket.”

Together we can collectively shape and build a resilient future. We need to ask ourselves how we interact with our island and what solutions are required. Because in the end we only have one coast, one shore, one island.

Happy Sunday.

Julia Lindner
Executive Director

The Garden Island

In our quest to learn from communities impacted by short-term rentals (STRs), we found Kauai, Hawaii. With most of the island in conservation, Kauai is a tropical paradise. It has a population of about 60,000 locals, 20,000 seasonal residents and 30,000 visitors (on any given day). 

Kauai has long faced familiar pressures: a real estate market that attracts investments from all over, a housing crisis for residents, traffic congestion, water quality problems affecting freshwater and reefs, infrastructure that can’t keep up with rapid development, and so on.

In 2008, coincidently the year Airbnb was founded, residents of Kauai decided they had enough reasons to regulate short-term rentals:1 

  • The “uncontrolled proliferation” of STRs was contributing to the lack of housing affordable to locals and negative repercussions to specific residential neighborhoods. 
  • Vacation rentals built were displacing traditional neighborhoods where people of low- and moderate-income had lived. 
  • From 1990 to 2000, out of 7,405 household units built, 47% were for vacation or seasonal use, 38% for local owners, and 15% available for local families to rent.

After significant community input, Kauai adopted a unique approach towards controlling the growth of STRs. The goal was to restore a balance between local residences and single-family vacation rentals. The island designated a few small Visitor Destination Areas (VDAs) where resort activity was already concentrated and allowed all properties within to operate short-term rentals. In contrast, short-term rentals outside VDAs have strict limitations.

Kauai’s experience offers valuable insight. Single-family houses licensed for short-term rent coexist with properties that aren’t permitted. Over time, this has resulted in market price differences. Outside the VDAs, properties holding a rental license are 20-25% more expensive than others. It’s especially true for entry- to mid-level homes. A strong indication that STRs have a significant impact on house prices.

There’s another difference. In Kauai, property taxes for short-term rentals run like businesses are taxed 3x higher than local homeowners. They are effectively classified as commercial properties.

Kauai’s approach to STRs has proven successful. A solution for Nantucket would undoubtedly look very different. Still, looking at other communities helps us think outside the box and spark conversation.

Happy Sunday.

Julia Lindner
Executive Director

1 County of Kauai, Kauai County Comprehensive Zoning Update, July 2005.

The Airbnb Effect

There is no question this summer will be a “muted one.” But the common theme amidst all this chaos is that the island will recover and hopefully come out stronger. We must take this time to learn from the past and position ourselves for the future.

Let’s start with a popular topic: short-term rentals (STRs). 

Vacation rentals have been an important part of the Nantucket experience for a long time. But didn’t they function more as recurring rentals for families staying for long durations? Didn’t weekend visitors stay at hotels and inns? Nantucket now has 1,900 short-term rentals on the State’s list. That’s about 20% of all household units. The actual number is likely higher. 

What changed? Airbnb (and other online platforms like it).

The popularity of sites like Airbnb have transformed the vacation rental scene. They’ve made it frictionless for visitors to rent for as little as one night and highly lucrative for owners. The question is, how has the “Airbnb effect” impacted our community? 

Research suggests the increased ability to rent short-term has led to higher long-term rental rates and home prices. The growth of Airbnb and other apps like it has shifted housing supply from long-term to short-term rentals. Residential property into commercial property. It has turned every residential neighborhood with Airbnb rentals into a hotel district. The increased ability to make more money by renting short-term has pushed house prices up. Does this all sound familiar?

Communities all over are assessing the impacts of app-enabled STRs. Kauai, The Hamptons, and Aspen are just a few examples. At the top of the list of concerns are impacts on housing, but also local infrastructure, the hospitality industry, quality of life in neighborhoods, and more.

We’re researching the topic to start the conversation. Are STRs hurting the community? What are our options?

Stay tuned.

Julia Lindner
Executive Director

Self-Preservation

The island, like much of the rest of the world, has had to make some significant sacrifices in the face of this virus. It’s really about self-preservation. Which got us to thinking: “What if Nantucket took to solving over-development and year-round housing as seriously as it has COVID-19?” 

Over the long-run, is one kind of self-preservation different from another? 

In the last 20 years, over 7 million square feet have been added to our neighborhoods. That’s equivalent to roughly 3,000 houses if we assume they average 2,400 sq. feet of living space. If you think 3,000 additional houses are too high – it’s an average of 150 per year – consider this: from 2017 to 2019 we averaged an additional 158 single-family homes per year.  And so, no doubt enough houses have been built. But to what end?

Most of us acknowledge and can see the exponential growth that’s occurred on the island. So, similar to how we’ve come together as a community to manage the growth and spread of COVID, together let’s approach future development to get the desired outcome. 

We’re committed to collaborating with experts and local organizations and getting input from the community. The goal is to craft a collective vision without sacrificing the future of the island. It’s an opportunity to take a step back, adjust our sails and set a new course.

Have a great Easter Sunday.

Julia Lindner
Executive Director

A different kind of positive…

Things look different this year and sometimes the word different can mean good or bad. If you were to go into town, you might shudder at the empty streets due to restaurants and stores being closed. In this case, the word different doesn’t feel so great. But a few local businesses are trying to adapt in a way that makes different feel good. 

Lemon Press is no different than other restaurants that have been hit hard. General Manager, Rachel Afshari, says, “People are (still) hungry and although one way of looking at this pandemic is that people suddenly have lots of time, the truth is many are still working full time and taking care of their children.” 

That’s why Lemon Press is offering a meal kit service. They do it all; the planning, prepping, and chopping. And you know what the best part is? They deliver straight to your home – free of charge! 

Meanwhile, yoga and fitness studios that fuel our energy have gone viral moving classes online… 

Supta Yoga owner, Meg Rohrer, has been offering free yoga classes through Instagram. Like others, Meg has felt the strain on her business. She’s also felt overjoyed by the support her studio has received for being available. “People have sent generous donations and even love notes to my mailbox. I’m so thankful for this (social media) platform and our tight-knit community…”  

Nantucket Cycling and Fitness owner Lisa Wisentaner is offering workouts on YouTube. And though Lisa admits, “the online component of teaching to our clients has its challenges, and is something I’ve had to adapt to in a creative way.” She was sure to add that, “connecting with our clients through this platform not only fulfills our clients but it fulfills us (the staff) in ways we wouldn’t have imagined.”

At Cisco Brewers, Kian Ross, a year-round Brewery bartender says, “Things are definitely different, and we all miss seeing our customers, but it feels good to give back to the community.” The Brewery team recently donated over four gallons of hand sanitizer to the Town’s first responders and other personnel.  

The businesses we met with all agreed the island community is the driving force that keeps them going. And so the question is, what can we do to help island businesses get back up once all of this is over? It’s simple – keep it local.

Have a great Sunday. 

Lessons from the last economic downturn

We don’t want to downplay the severity of the current COVID-19 situation. It will likely be very difficult in the near term — we’re beginning to see that already with several cases on-island and the community bracing for more. The difficulty, especially economically, will continue with perhaps the third major economic crisis in the past 20 years. But in the long-term, past evidence points to a strong recovery. 

Prior to the current health crisis, market forces on Nantucket were screaming upward. Just a few short weeks ago we were riding high on one of the longest and most profitable periods of home sales the island has ever seen. Market-value sales were up and affordable rentals and purchases were down. Over the past few years, we’ve heard more than a few people on Nantucket say, “All we need is a good recession to bring the market back into line.”  

But is this really true?

Maybe a look at the past economic downturn will give us some insights into how the Nantucket market behaves during a correction. 2009 to 2011 was a very tough time for Nantucket. We experienced a wave of foreclosures, and more than a few homeowners were left underwater. It was, to put it bluntly, very bad. 

But perspective is everything. If you look at the trajectory of the Nantucket economy from the last 20 years, the fallout of the Financial Crisis was a blip on the way to a massive climb in property assessments, from $5 billion to $25 billion. Over this time, more than 16,000 building permits were issued.

A look at restaurant and lodging receipts (rather than real estate values) shows the town went from collecting about $1 million a year in the early 2000s to nearly $5 million by 2018. Easy to forget there were recessions in between.

Bottom line: The attraction of the island will continue and the market will recover.

There’s a saying in politics: “Never let a good crisis go to waste.” The question is, are we going to use this critical inflection point to reset our goals and actions to make ourselves stronger as a community? Or are we going to recover and just go back to unbridled development, a growing housing crisis, more congestion, and the systematic erosion of our community?

While we recover from this crisis, our short-term goal as an organization is to build a dialog around the former — making the community stronger. Stay tuned.

Have a great Sunday. 

Social (distancing) studies

These are unprecedented times, surely. The vast majority of us have had to change our daily routines and many of us are homebound. (Take the staff at ACK•Now, for example. We continue to work on projects together and see each other every day, but only through a 400 x 600 pixel window on our laptops.)

Many of you who are not on-island, and perhaps a few who are, are likely wondering how we are doing here. You may be asking the question that is on a lot of people’s minds: What does such a social place — a safe haven for family and friends, gatherings and interaction — do during this period of social distancing?

We will be honest. It’s not easy. But the one thing that you can bank on about the Nantucket community is that we know a thing or two about challenges and we usually find a way to overcome them.

The challenges Nantucket faces are similar to what’s happening on the mainland. But in some ways, these challenges are magnified by the boats, the isolation and the fact that the community is not used to having its innate resilience tested in such a way.

But still, we are adapting.

A volunteer group called Nantucket Neighbor sprang up last weekend and quickly grew to 84 volunteers who are on call to help their community around the clock for free. Supta Yoga Studio, and others, are offering free classes on Instagram. Facebook has become an even more important way for people to connect. Many folks have been taking walks and enjoying the open air, meeting many familiar faces (separated by a minimum of six feet, of course). And since the regular Thursday night open mic at the Nantucket Culinary Center could not meet in person, the host has taken the show online instead. With 14 live performances and 30+ people watching. 

This small island community will always find a way to overcome a challenge — and remain social — even from a distance.

Have a safe Sunday.