• ACK-Now has overlooked other “revenue positive” solutions. The main “poster child” for their complaints are multi-property owners and non-resident investors, even though these constitute a small fraction of the 2,000+ homeowners who do short-term rentals. Massachusetts law allows for an additional 3% “Community Impact Fee” for multi-home owners, which could increase the de facto Nantucket short-term rental tax from 6% to 9% for the 2nd or 3rd properties owned by that small segment. If an added 3% tax was levied on additional homes owned & rented, that would allow the island to continue to generate tax, all of that revenue could be directed to affordable housing, without harming everyone else and potentially reducing town revenue.
• ACK-Now cites neighborhoods such as Cato Lane, Miacomet, Finback/Grey Lady Lane, etc. Could you designate certain areas of the island as “Affordable Housing Zones” (“AHZ”). In those areas, could you dampen forces that may accelerate price increases, such as limit the purchase of 2nd homes by part-time residents as well as vacation home rentals. Subsidize home purchases?
• In any area designated as an AHZ there would have to be consideration to grandfathering existing home owners who may be unhappy that either they may be unable to pursue vacation rentals or their properties may not appreciate as elsewhere because they are in a designated AHZ. An AHZ is most effectively established in new areas of development, or if a substantial majority of owners in a neighborhood area agree to become an AHZ.
• Could the Land Bank increase transaction fees, directed towards affordable housing? Could they release limited parcels of land that may be appropriate for the establishment of affordable housing zones?
• Could a larger percentage of the new found 6% short-term rental tax proceeds go to support affordable housing?
Analysis & Observations: This is not exhaustive, but touches on pieces of analysis, anecdotal observation and assertions made by ACK-Now.
1. For the town of Nantucket, during the first year the new 6% short term rental tax was in place, it generated 72%, or $5.76 million out of the total $7.98 million generated in Room Occupancy Taxes, which includes tax from hotel, inn and B&B rooms. In the first 6 months of FY 2022, those numbers continue to grow substantially. ACK-Now's proposed Article 43 bylaw puts this new, growing revenue at risk, potentially reducing funds that could go to affordable housing. ACK-Now has presented nothing to address what would replace this direct tax loss, in addition to the much larger indirect loss of vacationer spending on island.
2. In order to create alarm, ACK-Now circulated a highly misleading email on February 1st, 2021 stating that the Massachusetts short-term rental registry grew by 10% from June – December 2020, asserting this underlines the worrying trend of removal of housing stock to convert to short-term rentals. These numbers were wholly taken out of context to suit ACK-Now’s goals. In 2019 the MA short-term rental registry was at 0, because there was no requirement until tax became due for leases post July 2019, so compliance only began that year. 2020 was the first full year of the new short-term rental tax, thus, it was fully expected that growth in the registry would accelerate throughout 2020, as short-term rentals came into compliance. A lag in compliance is always typical when a new tax is enacted. Furthermore, if a homeowner, in particular a family that has been financially harmed during the pandemic, decides to put up their house for rent when they’re not there, it’s not removing housing from the economy. It is generating tax revenue (and vacation spending) for the town, and helping that family to keep their home. And the current state registry count remains at around 2,200 as of March 2022. No, the sky is not falling due to short-term rentals.
3. Few, if any, owners who rent are aware of ACK-Now’s push and proposed restrictions, directed at a small friendly audience and Nantucket town committees, occurring in winter and in the midst of a pandemic when most part-time residents are off island. These approx. 2,200 full time and part-time resident homeowners who offer short-term rentals pay 4 taxes: a. annual un-discounted Nantucket real estate and personal property taxes, b. MA 5.7% and Nantucket 6% short-term rental taxes Thus, part-time residents who conduct rentals currently bear larger taxation, with little to no representation on this issue. They deserve to be pro-actively informed and heard on an issue of such material consequence.
4. If a Nantucket Bylaw was proposed restricting hotels, B&B’s and Inns, and those owners were not informed to express their view or have a chance to defend against a harmful bylaw, there would be an uproar. We fully support the creations of a working group that would include representatives from all constituents involved in the short-term rental discussion, working together towards a solution that does the most good and the least harm.
5. ACK-Now asserts they have many supporters, but it’s unclear who they are, if they have a vested interest and who may be against. The overwhelming 2-1 vote against last year's ACK-Now sponsored bylaw (Arcticle 90) showed a lack of support for severe short-term rental restrictions, yet that did not stop them from proposing an even more onerous one this year (Article 43). That doesn't signal a 'come to the table and work for the common good' attitude. Instead, and along with the lawsuits filed against short-term rental owners, it signals bullying and harrassment.
6. ACK-Now tries to give comfort by saying they don’t want to eliminate short-term rentals, only restrict them. Of course, not pushing the nuclear button is a plus, but they overlook the fact that a small economic impact can have a material effect on an economy. The Great Recession of 2008/09 saw a GDP fall in the U.S., peak to trough, of only 4.3%. This caused enormous pain, especially for hourly employees and those with little savings. National unemployment grew to 11%. Real estate values fell nationally; on island the decline was 15% - 25% from 2007 to 2010.
7. The MA Short Term Registry currently lists approximately 2,200 short term rentals registered. However, the number of “active listings” appears to be far less (most homes have multiple listings with websites and real estate agencies and the state registry lists any property that ever was registered with no ability to delete inactive listings): a. AirBnb, lists 302 (55 are single rooms, rest are hotel or single family homes) b. VRBO lists 417 (1br:4%, 2br:11%, 3br:21%, 4br:32%, 5+br:32%) c. Maury People 660 listings, not all are active. (70% are 4+br) d. J Pepper Frazier, 760 listings, not all are active (74% are 4+br).
8. One question to be determined is how much of the housing stock has been converted to short-term rentals, and could that stock be targeted as “affordable housing?” 64%-74% of the stock are 4 bedroom or larger homes. If we consider a 6 bedroom Eel Point property valued at $6 million. How does reducing Eel Point rental tax revenue and stopping vacationers from staying there and spending money on island help to solve the affordable housing crisis? There are six anecdotal examples of big sales price increases in ACK-Now’s presentation, but many of those would not be “affordable housing.” Two had private swimming pools, most appeared to be 4+ bedrooms, two of six were priced above $2 million. Should “affordable housing” include properties valued over $3 million? $2 million? If these would not be affordable housing remedies, should they be included in rental restrictions and risk to Town revenue?
9. Another question is: Has year round housing really been lost or is that another anecdotal concept? In a presentation by the Planning Department to the Select Board, the Planning Department cited a study of several R-10 zoned year round neighborhoods, looking all the way back to 2008. They compared the property owner records to voting records and noted no significant change at all.
10. ACK-Now is correct when it states demand jumped for self-contained, single family house rentals during the pandemic, but that’s not the fault of homeowners or investors. This occurred not just in Nantucket, but nationally, and likely saved many Nantucket businesses the last two summers. As reported in the news, during the pandemic there was a jump in demand for home rentals globally as they provided a safe alternative to mixing with groups of unknown persons in large congregate settings such as hotels, Inns or B&B’s.
11. Why the anti part-time resident bias? The majority of businesses around the nation and on island, large and small, have non-resident owners, from Walmart, to Rite-Aid, to hotels, shops, restaurants, and car rental agencies, all of whom provide valuable services and employment to locals. Furthermore, many iconic long-term Nantucket businesses have non-resident owners. Non-resident ownership: i. Marine Home Center (owned by Intercontinental in Boston) ii. Stop & Shop iii. Nantucket Boat Basin iv. Nantucket Hotel & Resort v. The Wauwinet vi. Jared Coffin House vii. The White Elephant viii. The Summer House … and many others The measure of a business to a town, especially one centering on tourism, should be the value it delivers to its customers, the employment and revenues generated for the town, both via direct taxation, and the spending on island by vacationers.
12. ACK-Now asserts “The bulk of rental income is going off-island.” The opposite is true. Short-term rental homeowners are the de facto primary importers of revenue and Income to Nantucket, as they offer the majority of island accommodation, 3X to 6X what is offered by hotels, B&B’s and Inns. The bulk of homeowner rental income is used to pay their mortgage, home insurance, Nantucket annual real estate and personal property tax, MA and Nantucket short term rental taxes, Wannacomet Water, Nantucket Energy/Yates Gas, landscapers, tradesmen, rubbish removal, caretakers and cleaners, etc. Then, the families to whom they rent spend money on airline and ferry companies, souvenir shops, clothing boutiques, island restaurants, taxis, bike and car rentals, coffee shops, stores, pharmacies, food stores, etc.
13. ACK-Now asserts home rentals are “Unregulated businesses operating in residentially zoned districts” and have funded two lawsuits against the town and property owners who operate short term rentals. However, short-term rentals have been a Nantucket tradition (for year round and part-time residents) for over a century and are dramatically different in the number of guests, facilities and volume of turnover compared to Inns and B&B’s. When the decision was made to move to a tourist based-economy years ago, Nantucket's strategy was to house tourists in private homes rather than permit large scale hotels and resorts on the island. Unless Nantucket residents wish to change their economic engine once again, hotels and resorts need to be allowed or short-term rentals need to be specifically legal (Article 42).
14. In ACK-Now’s presentation, all home owner types are bundled and restricted in equal measure, families who have owned 1 home for decades, those who own many, investment companies, vacations clubs, etc. Remedies are not tailored to different categories. It’s a “one size harms all” approach.
15. ACK-Now highlights what have historically been affordable, long term residential areas such as Cato Lane, Lover’s Land, Miacomet, roads off Bartlett Road, Beach plum village. But they are proposing targeting and restricting rentals everywhere. If these are designated “affordable” zones which are suffering rapid gentrification, why not focus efforts there?
16. ACK-Now cites police reports of unruly behavior and noise. This anecdotal concern was also investigated by the town and reported to the Select Board in November 2021. Their study of the police records indicated that of the 557 noise complaints from May 1-October 1, 2020 showed that 97.1% of the short term rental homes were not the subject of any complaints. That doesn't mean there are none but it does mean we need to deal with residential noise issues even-handedly, as a community, regardless of its source.
17. “Learning from other communities”, ACK-Now cites NYC, Hawaii, California, AZ and The Hamptons as examples. Many of these are not relevant, they either have broadly diversified economies, larger land masses and multiple, dense hotel, resort and time share complexes. The Hamptons are also not directly comparable, being predominantly a wealthy commuter suburb for those from New York City, dependent on NYC’s diversified business base. Hawaii is characterized by large multi-building hotel resorts and time shares, anathema to Nantucket.
18. The most relevant location is Martha’s Vineyard, however, there are distinct differences in density and cape access that have to be considered. Though it does makes sense for a reach out between Nantucket Town representatives and similar towns on how to address housing affordability and regulation of the short-term rental market. Other island or remote communities similar to Nantucket (ski towns like Aspen?) should be identified and share ideas.
19. ACK-Now states they have a lot of support, including by impacted parties. How many of the 2,200 home owners support their actions? Real estate agencies? Restaurants? Once you start to poke around, and speak to many islanders who work with these homeowners, virtually no one supports their proposals. The vote in 2021 confirmed these suspicions ….. Article 90 was bad....and Article 43 is worse.
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