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Much of Cape, Islands designated 'seasonal communities' in housing bill headed for Senate vote

A house near Chapoquoit Beach
Liz Lerner
A house near Chapoquoit Beach in Falmouth.

Officials in some Cape and Islands communities say they’re disappointed to see a housing proposal supported by at least 12 local towns left out of a critical bill in the state Senate.

But another element of the bill — designating Nantucket, Martha’s Vineyard, and many Cape Cod towns as “seasonal communities” — remains, and local officials are trying to figure out exactly what that would mean if it becomes law.

Omitted from the nearly $5 billion Senate housing bond bill unveiled Monday was a local-option fee, or tax, to be adopted by municipalities at their discretion on high-value real estate transfers. Communities would use the money for affordable housing.

Provincetown has filed a home-rule petition asking for the fee “pretty much every year” for at least a decade, according to Town Manager Alex Morse. He said the money would go toward buying property for future housing.

“It would have also been used for site development, site readiness, feasibility studies of housing on certain sites, and then direct subsidies to actually build the housing itself,” he said.

Nantucket and Martha’s Vineyard have been vocal supporters as well.

Nantucket would have collected between $4 and $5 million from the local-option fee last year alone, said Kristie Ferrantella, the town’s housing director.

“Nantucket is in the middle of trying to launch a pilot program for year-round deed restrictions, and having this funding source would really help us secure more year-round deed restrictions and competing in the open market,” she said.

Supporters were counting on the Senate to revive the fee after the House omitted it earlier this month. But the fee is out, for now. A Senate vote on the bill is scheduled for tomorrow.

In the meantime, local officials are looking at what the Senate version does include.

For one, it authorizes the Healey administration to borrow up to $50 million to fund housing programs in seasonal communities.

And it creates a new, official designation of what a seasonal community is. The language of the bill specifically names Nantucket and all of Dukes County as seasonal communities, along with any town in Barnstable County with more than 40 percent seasonal housing.

It allows the administration to designate other communities as seasonal based on several factors, including the prevalence of short-term rentals and the seasonal increase in population.

Those communities could accept or deny the designation.

The bill would also allow communities to create year-round occupancy restrictions, developing housing specifically for public employees, and create housing for artists and writers.

It also calls for seasonal communities to allow “tiny houses” and to allow undersized lots to be used for affordable housing, and the bill gives towns the authority to increase tax exemptions on a principal residence.

It would also create a seasonal community advisory council to make policy recommendations to the administration.

Morse, the Provincetown town manager, said he wants to learn more about the details.

I think the communities like Provincetown that would be considered a seasonal community are still sort of curious, like, what that means, and what the benefits will be of being a seasonal community,” he said. “And we're hopeful that it will open up, you know, other funding sources.”

Ferrantella, the Nantucket housing director, suggested that the real estate transfer fee could be revived for seasonal communities.

But the fee has faced significant opposition from the real estate industry.

State Sen. Julian Cyr said the statewide real estate lobby is “out of step” with what most agents on the Cape and Islands support.

“This is a revenue source that will actually allow us to build more housing,” he said. Unfortunately, the statewide groups aren't listening to their constituents on Cape Cod and the Islands,” he said.

The Massachusetts Association of Realtors calls the proposal a tax that would raise the cost of buying a house.

After the Senate vote scheduled for tomorrow, the Senate language will have to be reconciled with the House bill, which contains fewer provisions for seasonal communities.

Cyr said the issue of transfer fees isn’t dead; supporters will continue to work for it.

Jennette Barnes is a reporter and producer. Named a Master Reporter by the New England Society of News Editors, she brings more than 20 years of news experience to CAI.