Unlocking Housing Potential: Adaptive Reuse of Upper-Story Space in Downtown Nantucket

Sponsor:	Nantucket Housing Department
Sponsor Liaison:	Kristie Ferrantella, Dylan Metsch-Ampel
Student Team:	Jacob Boyle, Caleb Corpuz, Elias Hanford, Sean Smith
Abstract:	The Nantucket Housing Department (NHD) seeks to address the island’s affordable housing crisis. The goal of this project was to identify underutilized upper-story commercial space in downtown Nantucket and explore opportunities for conversion into affordable year-round housing. We created an inventory and maps of current upper-story use, interviewed stakeholders, and identified opportunities and barriers to conversion. We found most second-story spaces are fully utilized and that many stakeholders were concerned about the costs and lost revenue from conversion. We recommend that the NHD seek ways to alleviate financial impacts, explore the conversion of downtown short-term rentals into year-round housing, and focus future research on third stories downtown and other areas of the island.
Link:	Report: Nantucket Adaptive Reuse For Housing B25 Presentation: Nantucket Adaptive Reuse For Housing B25 Presentation

Executive Summary:

The affordability of housing in Massachusetts is a severe problem, which is particularly noticeable in Nantucket, a small island south of Cape Cod. Nantucket’s housing crisis is made more impactful by its geography and tourism-centered economy. The historic preservation requirements also make new development less effective at creating new affordable housing.

First, the median home price rose 116% from $1.48 million in 2014 to $3.2 million in 2023, while the median household income rose only 32% from $82,596 to $108,671 in the same period (Allen, 2025; Federal Reserve Bank of St. Louis, 2024). This high cost of housing relative to income means that even households making more than double the median income are priced out of homeownership (Piercy, 2025). In addition, a large share of renter households are cost-burdened, with 45% of renters spending 30% or more of their income on housing (Piercy, 2025).

Second, constraints on land use make affordable development more difficult. From 1987 to 2018, the amount of developable land declined from 53% to under 6%, creating immense competition, which makes it difficult to alleviate the housing crisis with new development (Barrett Planning Group LLC & JM Goldson LLC, 2021). Third, seasonal residences make up around 57% of the units on the island, further reducing the amount of housing available to year-round residents (Piercy, 2025). Lastly, historic considerations have a large effect on housing and restrict high-density development that could increase the affordable housing stock.

Goals, Objectives, and Methods:

The goal of this project was to identify underutilized upper-story space in a portion of the Commercial Downtown of Nantucket and explore opportunities for conversion into affordable or attainable year-round housing. Figure ES1 shows our area of study and the first story utilization. We achieved this goal by completing three objectives:

1. Inventory existing upper-story spaces in the Commercial Downtown.
2. Engage stakeholders and experts to understand possible opportunities and barriers to downtown
   conversions.
3. Explore similar efforts in other communities.

To complete these objectives, we gathered information from a variety of sources, such as the Town Geographic Information System (GIS), property cards, and interviews with on- and off-island stakeholders.

Figure ES1: First Story Usage Map

Findings:

The data we gathered about usage of spaces in the study area showed that most of the upper-story spaces were already utilized (Figure ES2, Figure ES3). Specifically, we found that 24% of the units are used for commercial purposes, 25% are already used for housing, and only about 4% of the units are empty. In terms of square footage, a combined sum of only 4,356 square feet of empty space, a preliminary measure of the potential opportunity for conversion, was identified on the second and third floors. This measure is uncertain for two reasons. First, we were able to identify current uses for about 88% of second-story spaces, but only 34% of third-story spaces. Second, some empty spaces may not be conducive to conversion to housing, such as attic spaces.

Figure ES2: Second Story Usage Map

Figure ES3: Third Story Usage Map

We found that the primary concern of stakeholders about the conversion of upper-story spaces to affordable or attainable year-round housing was the costs associated with conversion. Building professionals we interviewed estimated that the cost of conversion of a fully finished second-story space currently used for non-housing purposes could cost upwards of $1,500,000.

Recommendations:

1. We recommend that the Nantucket Housing Department conduct additional research in areas of the island that this study did not cover, including a broader area within the downtown as well as the Commercial Mid-Island District, due to the high rate of existing utilization within our study area.
2. We recommend that the Nantucket Housing Department research the prevalence of short-term rental (STR) units in the area of study and gather opinions about converting the spaces to year-round residences.
3. We recommend that the Nantucket Housing Department continue assessing opportunities for converting the third-story spaces about which we were unable to determine current uses.
4. We recommend that the Nantucket Housing Department evaluate existing state-level financial incentive programs, such as the Historic Rehabilitation Tax Credit and Commercial Conversion Tax Credit Initiative programs, to better understand if and how they could be leveraged by property owners to ease the financial burden of conversion.
5. We recommend that the Nantucket Housing Department research possible financial incentives that they could create, as many existing programs operated elsewhere in the state are designed to target larger-scale development projects.
6. We recommend that the Nantucket Housing Department investigate the opportunity for bundling spaces that are planned for conversion into a single project. This would help in applying for grants that will assist with the costs of conversion.
7. We recommend that the Nantucket Housing Department identify property owners and business owners willing to participate in a pilot program for an upper-story conversion project. This would involve getting a property owner who is willing to work through a lot of the unknowns of this type of project.

Conclusion:

We identified current usage of upper-story spaces in a subsection of the Commercial Downtown District, as well as opportunities and barriers for adaptive reuse of upper-story spaces within the buildings in this area. There are relatively few underutilized spaces, and the high cost of conversion is the largest barrier to converting spaces into housing. Incentives to encourage conversion of the underutilized spaces that do exist and reuse of spaces that are already usable as housing have the possibility to create a modest number of new affordable residences. Despite this, adaptive reuse has the potential to be one of the strategies that Nantucket uses to overcome severe inadequacies of affordable housing for its residents.