Improving Nantucket Municipal Workforce Housing

 

Sponsor: Nantucket Town Manager’s Office tmo-picture
Sponsor Liaison: Gregg Tivnan
Student Team: Reid Billings, Jenna Troio, Michael Griffin
Abstract:

The purpose of our project was to provide recommendations to the Nantucket Town Manager’s Office and the Nantucket Board of Selectmen to increase the housing stock and assist municipal employees in affording housing on Nantucket Island. These recommendations were developed from reviewing previous housing reports, interviewing prominent stakeholders, identifying successful examples of workforce housing on Nantucket Island (including public and private sector), and reviewing housing strategies practiced in similar communities. Key recommendations included developing a workforce housing policy and a workforce housing trust to designate housing to municipal employees, as well as increasing seasonal and year-round housing stock.

 
Link: Final report: ack16-tmo-final-report
Final presentation: ack16-tmo-final-presentation-powerpoint-pdf

 

Executive Summary

Background

Nantucket is in the midst of a housing crisis and has been since at least 2002 (Office of the Town Manager, 2016). The term housing crisis does not have a strict definition but is often characterized by an inability for average citizens to own a home, high rental prices, and a lack of affordable housing production (Sisson, 2016).

Along with gentrification and an influx of wealthy summer residents, conservation efforts by private organizations have increased the current mean house price to $1.7 million (Raveis, 2016), far beyond the reach of many municipal employees. The average salary of a Town employee is $84,652. On that salary, with a $100,000 down payment and an interest rate of 3.92%, the maximum mortgage amount an individual can qualify is $536,700 (Affordability Calculator, 2016). Home ownership is cost prohibitive for 90% of the island’s year-round residents (Nantucket Cottage Hospital, 2015).

Over a third of Nantucket’s renters spend 30%[1] or more of their income on housing and 17% are in a scenario known as ‘worst case housing needs’, spending at least 50% of their income on housing costs (Nantucket Workforce Housing Needs Assessment, 2015; Nantucket Cottage Hospital, 2015). Monthly rents and mortgage payments on Nantucket are similar; however, with a significant portion of an individual’s monthly income going towards rent, it’s rare that a municipal employee is able to accrue enough money to afford a down payment.

Officially, Nantucket is the fastest growing county in the state of Massachusetts (Weaver, 2015), with 14% growth from 9,520 residents in 2000 to a U.S. Census estimated 10,925 in 2015. However, there is evidence that points to the year-round population being even higher. Through voter registration data and additions to the town street list, the Nantucket Town Clerk can count as many as 13,000 year-round residents. Including individuals who cannot be counted, she estimates the actual number to be as high as 23,000 (Graziadei, 2016). Whatever the actual number, there is abundant evidence that the island’s year-round housing stock has not grown nearly as quickly as the island’s population, leaving a gap in which many town employees fall. Of the 11,650 housing units on the island in 2015, 34.9% or 4,066 total are year-round units (Nantucket Cottage Hospital, 2015). In some cases, people are living in illegal ‘apartments’ that are in reality a bed in an unfinished basement with four to five other ‘rooms’ separated with a hanging sheet or a bed in a hallway next to a refrigerator. People living in these areas are at times sent to the hospital with a myriad of health problems, including twelve people from one home sent for carbon dioxide poisoning. The Nantucket Health Department works to shut down these unsafe spaces, including the apartment shown in Figure 1 (Santamaria, 2016). These apartments are the direct result of housing stock not increasing to accommodate the population increase.

Figure 1: Nantucket Illegal Apartment Dwelling

The Massachusetts Affordable Housing Law (Chapter 40B) allows developers to bypass local zoning regulations if 10% of all housing units in a town are not affordable.[2] These projects are often controversial amongst the community in which they are built. However, a town government can resist the developer’s efforts if they are taking meaningful steps towards creating affordable housing. The challenge to the Town is that a majority of municipal employees earn well above 80% of the Area Median Income (AMI). In recent years, the Town of Nantucket has worked with developers by providing land or zoning changes to build housing units with a mixture of income restricted units and market priced units in such a way that all units qualify as affordable under Chapter 40B. These so-called ‘Friendly 40B’ projects have allowed the Town of Nantucket to demonstrate progress and thus far keep control of the process of affordable housing construction, but if the Town does not work to increase these developments, ‘Unfriendly 40B’ developments may come to the island and bypass zoning and density restrictions (Morrison, 2016).

Nantucket Town Government lacks the resources to provide housing support for critical employees, especially during the summer when the population on island reaches between 60,000 and 70,000 people. During the summer, the Town of Nantucket looks to hire extra seasonal workers to adequately service this surge of population on island. In 2016, the town budgeted for and sought to hire 130 seasonal employees: seasonal police officers, lifeguards, Department of Public Works employees, endangered species monitors, etc. Yet, the town was able to hire only 100 employees, mainly due to a lack of seasonal housing. Some effects of the shortage of seasonal workers are beaches without a lifeguard on duty, an increase of complaints about a dirty downtown area, and longer emergency response times (Tivnan, 2016). Nantucket’s Human Resources Department conducted exit interviews with police officers leaving the island, and determined that a leading reason for their departures was the lack of affordable housing. In recent years, an average of three police officers have left each year to take a job at another police department on the mainland, creating a ‘revolving door’ that hinders community policing efforts. Each officer that leaves costs the Nantucket Police Department an estimated $70,000 in training costs, uniforms, ammunition, etc. (Pittman, 2016).

While the Town of Nantucket cannot house every one of its 700+ employees, it currently provides some year-round and seasonal housing. The Long Range Aid to Navigation (LORAN) Coast Guard radar station in Siasconset is used to house up to 36 seasonal Community Service Officers (Pittman, 2016). The town owns four housing units for Department of Public Works Wastewater employees per the conditions of the permit of the operations of the plant (Gray, 2016). Three homes are leased from the Nantucket Islands Land Bank that summer lifeguards live in (Tivnan, 2016). Additionally, the Town of Nantucket owns one home for senior level department employees. Used as a recruiting tool, this home on West Chester Street is offered to incoming senior-level staff as part of their contract. It has been occupied in recent years by the Police Chief, the Assistant Town Manager, and the Fire Chief (Tivnan, 2016). The Town routinely struggles to hire senior management due to the lack of affordable options, whether town or privately owned (Tivnan, 2016).

Potential solutions to this municipal workforce housing shortage may be found in other similar seasonal communities, such as Provincetown (Provincetown Housing Playbook, 2015) and the Hamptons (Euler, 2016), as well as colleges and universities in high-cost communities (Harvard, 2016; Stanford, 2016), such as Boston and San Francisco, all of which struggle with affordable housing issues. Nantucket can replicate the successes found in these communities. Additionally, private institutions on the island have identified workforce housing as a strategic issue and have taken steps to assist their employees. Some small business owners on the island house employees in their homes so that they can run their business in the summer (Bridges, 2016). Larger businesses on the island are spending millions of dollars building dormitories to house their employees (McEachern, 2016). This disparity between the public and private sectors in forecasting and investing in workforce housing has led to a recruiting disadvantage for the town. In summary, the town can draw from its own experience, as well as other communities and the private sector on Nantucket for housing solutions.

Project Goal, Objectives and Methodology

The goal of this project was to assemble information on municipal housing options used on and off island to address housing challenges and offer recommendations for the Town of Nantucket to consider.

 

To accomplish this mission, we pursued the following five objectives:

  1. Assessment of the current state of workforce housing.
  2. Assessment of municipal housing needs and perspectives.
  3. Exploration of housing solutions found in similar communities and the public and private sectors on Nantucket.
  4. Provide the community with the opportunity to learn more about workforce housing.
  5. Develop short and long term recommendations for addressing workforce housing needs.

 

The following methods in turn underpinned how we addressed each objectives and sought to further understand municipal housing on the island:

  1. Reviewed previous Nantucket housing reports:
    1. Nantucket Housing Production Plan (2009)
    2. Workforce Housing Needs Assessment (2015)
    3. Community Health Needs Assessment (2015)
  2. Reviewed housing reports from applicable communities.
  3. Interviewed key stakeholders regarding municipal housing needs and perspectives.
  4. Conducted site visits of both the existing municipal housing infrastructure and private sector housing solutions.
  5. Appeared on local radio, prepared this report, and delivered a presentation to the community (available online).

Findings and Recommendations

From our time on Nantucket, we arrived at the following conclusions:

  1. Residents recognize municipal housing as a critical concern; 95% of interviewees felt that this was a key issue in the community.
  2. The Advisory Committee of Non-Voting Taxpayers (seasonal home owners) are in support of developing workforce housing, revealing that both seasonal and year-round residents recognize this issue, and many in principle support taking action to improve matters.
  3. The Town has a housing system in place to house some employees; these workers are mostly lifeguards and Community Service Officers.
  4. Private businesses on Nantucket have found successful solutions to the housing crisis, particularly larger businesses such as the Nantucket Yacht Club and Nantucket Community Sailing.

We recommend to the Town the following items, which address both housing stock and housing cost, as steps that can be taken to address the challenges of municipal workforce housing:

  1. Partner with island organizations to increase housing stock; these organizations have or are building seasonal housing units.
  2. Repurpose unused town properties to increase seasonal and year-round housing stock, such as the Siasconset Fire Station and the second floor of the sheriff’s station.
  3. Build dormitory style buildings to create seasonal, short-term, and year round stock, using models from private Nantucket businesses as a basis for these developments; use vacant town-owned land, to develop these buildings, such as the property at 6 Fairgrounds Rd.
  4. Work with developers to maximize ‘Friendly 40B’ developments on Nantucket to ease the burden on the housing market and increase housing stock.
  5. Establish a homeownership assistance program to aid in addressing housing costs by issuing housing grants and loans to assist municipal employees in purchasing homes.
  6. Create a workforce housing trust to manage housing projects and alleviate housing costs, using a model from other seasonal communities.
  7. Develop an overarching policy regarding workforce housing and hire staff to implement it to address both present and future municipal housing stock and cost. Without a workforce housing policy, the Town cannot choose who to provide housing for, what types of housing to purchase or construct, etc.

A complete explanation of our findings can be found in Chapter 4 of our full report and a complete explanation of our recommendations can be found in Chapter 5 of our full report.

The Town of Nantucket will continue to thrive with the addition of more seasonal and year-round staff, and the Town and the Board of Selectmen should work to increase municipal housing stock and decrease housing costs for employees.

 

 

WORKS CITED

Affordability Calculator. (2016). Zillow Group, Inc. Retrieved from https://www.zillow.com/mortgage-calculator/house-affordability/

Bridges, J. (2016, November 11). Personal Interview.

Euler, L. (2016). What Should Be Done about the Hamptons Housing Crisis? Retrieved from http://hamptons.curbed.com/2016/5/5/11597646/hamptons-housing-crisis-open-thread

Gray, D. (2016, October 25). Personal Interview.

Graziadei, J. (2016, Winter). United Nations of Nantucket. Nantucket Magazine.

Harvard University. (2016). Retrieved from http://www.huhousing.harvard.edu/faculty-and-employee-real-estate-services

McEachern, P. (2016, November 14). Personal Interview.

Morrison, P. (2016, November 15). Personal Interview.

Nantucket Cottage Hospital. (2015). FY15 Community Health Needs Assessment and

Implementation Plan. Retrieved from http://nantuckethospital.org/wp-

content/uploads/2015/08/NCH-2015-CHNA.pdf

Nantucket Workforce Housing Needs Assessment. (2015).   Retrieved from http://housingnantucket.org/wpcontent/uploads/2016/04/Workforce_Housing_NeedsAssessment.pdf

Office of the Town Manager, Town and County of Nantucket. (2016). Retrieved from http://www.nantuckettownmanager.org/index.html

Pittman, W. (2016, October 28). Personal Interview.

Provincetown Housing Playbook. (2015).   Retrieved from http://www.provincetown-ma.gov/documentcenter/view/6072

Raveis, W. (2016). Market Trends. Retrieved from http://www.windwalkerrealestate.com/realestate-research-nantucket-trends

Santamaria, R. (2016, November 17). Personal Interview.

Sisson, P. (2016). Why the rent is too damn high: The affordable housing crisis. Retrieved from

www.curbed.com: http://www.curbed.com/2016/5/19/11713134/affordable-housing-

policy-rent-apartments

Stanford University. (2016). Retrieved from https://fsh.stanford.edu/faq/index.shtml

Tivnan, G. (2016, September 6). Phone Interview.

 

 

[1] The Nantucket Workforce Housing Assessment (2015) denotes 30% of income as the threshold that households should spend on housing; spending over 30% of income on housing a year is defined as a housing cost burden to the household.

[2] Affordable is defined as able to be purchased or rented by a family making up to 80% of the Area Median Income (AMA).