Click to see the video: Five things you may not know about affordable housing
Hey there Nantucket it’s GRANT from the Nantucket owners manual here once again. And today let’s talk about Five things you may not know about affordable housing. Okay.
One. Affordable housing does not necessarily mean “housing you can afford.” On Nantucket There are a lot of people who need housing that they can afford but when the town or housing advocates talk about affordable housing they are really talking about housing that people in certain income brackets can afford. What constitutes affordable housing is defined by the federal agency, Housing and Urban Development, based on income requirements. One needs to be making between 50% and 150% of the median household income on the island which is currently anywhere between roughly $41K and $213K depending upon how many people you have in your household. A single person who makes more than $128,700 is not eligible for “affordable housing” and a couple that makes over $147,000 isn’t either. Right now there are no programs for people who make more than $150% of the median household income to buy their first homes outside of mortgage programs from the local banks.
Two. We continue to lose year-round housing inventory. According to Housing Nantucket, the number of owner-occupied year-round homes has decreased by 5.5% since 2000 (640 units) and the number of year-round rentals has dropped as well. Some estimate that we are losing a year-round home (owned or rented) every 5-1/2 days. Although the recent spike in sales may have accelerated this trend as wealthy buyers purchased their Nantucket homes during the COVID crisis. Census figures say our year-round population has grown by over 2,000 people during that time and some estimates peg that number at closer to 8,000. Clearly, a shrinking housing inventory and an increasing population are not sustainable.
Three. We are winning the battle, but maybe not the war. Many people both inside and outside the town government are concerned with solving the problem of 40B developments that disrupt neighborhoods. The state says we can deny 40B permits if we have enough inventory (10% of year-round homes) on the SHI (Subsidized housing inventory) list to remain in “safe harbor.” And that’s a good goal, but it may have the unintended consequence of making the housing crisis worse. That’s because our ability to meet safe harbor is aided by the loss of year-round homes as we talked about above. By making safe harbor the goal, without addressing the growth of seasonal homes and population, we can actually end up with an island that has fewer affordable homes per capita than ten years ago.
Four. Homeownership is not the holy grail. Once islanders own a home, their problems are not over. According to Housing Nantucket, 55% of current homeowners live in a situation where they spend over 30% of their income on housing which classifies them as Housing Cost Burdened. People in this category commonly have problems paying for other necessities like food, heat, and more. An unexpected sickness, equipment failure, joblessness, or downturn in the economy can have dramatic impacts on their ability to remain in their home. There’s very little room for error. Look at the numbers. Let’s say someone is “lucky” enough — lucky in quotes — to buy a home for $1.5 million — below the current median price — and has $100,000 to put down. That still means they have a monthly mortgage payment of $6,600 or $79,000 for thirty years. That means they need a household income of $263,000 just to stay afloat, feed themselves, and save for the future. No wonder so many people are renting out their homes seasonally to make ends meet.
Five. Despite what you’ve heard at Town Meeting, short-term rentals do have an impact on affordable housing. First, according to Housing Nantucket, the trend is that year-round housing is being converted to seasonal vacation use. We don’t know what percentage of these sales are ending up as short-term rentals. It’s likely a mix of owner-occupied and rental investment properties. But it’s happening. Here’s the thing: The increase in short-term rentals and owner-occupied vacation homes requires an increase in people to service these homes. Cleaners, Landscapers, Pool maintenance. Where these people are living is the issue. Many cram into substandard, unsafe situations. So short-term rentals are taking away year-round housing on the one hand but adding people to the population on the other. This year it came to a head with labor shortages due to a lack of places for people to stay. The solutions are not easy to come by. Capping or restricting rentals is very difficult politically with many stakeholders who make a lot of money are pushing back. It’s a mess.
Hope that helps you get a handle on this situation. Very soon, I will publish some solutions that we might want to think about. Thank you so much for watching as always please like and subscribe if you like what you see and also if you really like what you see consider supporting us on patreon or visiting us at Nantucket owners manual.com — OK see you in the backyard.