Stores closing, families leaving: Sky-high housing prices are changing Cape Cod
Housing on Cape Cod is expensive, and the pandemic has only made it worse. The gap has widened between what people earn and what they need to spend for a decent home. In this first of a two-part story, Jennette Barnes reports on how the housing crisis is changing Cape Cod.
At Chatham Hardware in downtown Chatham, owner Michael Colecchi greets customers from behind the counter.
His store has gotten harder to find in the last couple of years. You enter through a nondescript door on the side of the building.
This used to be a classic Main Street shop, with big display windows, but a year ago March, he moved to a smaller space at the back of the building and subleased the front to a high-end clothing store.
“That's how I'm able to stay open,” he said. “Otherwise, I'd have to subsidize the business.”
Colecchi is pretty sure he’s the fifth owner of Chatham Hardware, which opened in 1936, during the Depression.
The downsizing of the store is linked to another economic reality: exorbitant housing prices on Cape Cod. Housing demand, mainly for second homes, is driving up prices, and that’s affecting commercial space, too.
“It's not just the retail shops that suffer with high rents, but it's also — the banks close. Three of them closed here because there's not enough footsteps year round,” he said.
The old model was people would retire to Cape Cod and go to Florida for six weeks. Colecchi says the younger generation is more likely to buy a home just for the summer.
“They're affluent,” he said. “They've got a lot more money, and they’ve got a lot more want, and they’ve got the ability to do it.”
He’s a baby boomer, and he sees the change happening.
“I've got a niece here now from New York,” he said. “She's 33 years old. She's looking for property here as a second home.”
And after all these years, Chatham Hardware is closing, probably by the end of the year, he said. The owners of the building have sold it to real estate investors.
What’s happening here is part of a regional housing crunch that’s changing the makeup of local communities. It’s evident in the economic data.
Kristy Senatori, executive director of the Cape Cod Commission, says demand for housing started to far outstrip supply in April of last year.
“Cape Cod’s second homeowner economy has certainly set the stage for housing affordability challenges, but the pandemic has severely impacted the housing market and exacerbated the crisis for both year-round owners and renters,” she said.
In March of this year, nearly half of the listings on Cape Cod were selling above the asking price, and the median single-family home cost more than $650,000 — a jump of a whopping 48.5 percent year over year.
Senatori says that’s a problem.
“Our housing market doesn't meet the region's diverse needs,” she said. “We have lower than average wages; we have higher than average costs, but we have a lack of choice — limited supply.”
She says the region needs smaller housing units for people trying to make a living here.
To prevent those units from gobbling up land, planners are looking toward redevelopment and putting more apartments above stores.
Rick Penn, president of the clothing company Puritan Cape Cod and owner of the building it occupies in Hyannis, says he welcomes more downtown housing.
“Retail follows residential — I'm a big believer in increasing the density of people living downtown,” he said. “If more people are living downtown, of course, there's more demand for retail.”
Housing Assistance Corporation CEO Alisa Magnotta says before we talk about solutions, she wants people to understand who’s getting squeezed out.
With a median house priced at more than $600,000, she says buyers would have to make $150,000 just to qualify for the loan — to say nothing of their credit or down payment. Median household income on Cape Cod is more like $74,000.
“That gap is huge, right?” she said. “And so when we start talking about equity issues, and investing in the people who live here, that's who we're talking about. We're talking about people who work full time, who live here full time, who don't make $150,000. And that's pretty much most of local Cape Codders.”
So — more units, lower-priced units. But are communities going to take steps to promote that?
Magnotta says she feels the same desire that so many residents feel to preserve the Cape’s beauty and way of life.
But the region has already changed, and she says it’s becoming a place where the children who grow up here have nowhere to live.
“Nantucket is the canary in the coal mine,” she said. “We don't have to look far outside of our region to wonder, ‘What's it going to look like if our housing prices continue to escalate the way they are?’ The Cape is going to be unattainable for anybody who can't afford a million-dollar home.”
In Part 2 of this story, we’ll hear about what some towns are doing — and what more they can do — to lighten the burden of housing on Cape Cod.