By Ryan Castle, CEO, Cape Cod & Islands Association of Realtors
While a lot has been written about the exploding markets as to the new demand from those looking for respite and refuge across Cape Cod, Martha’s Vineyard and Nantucket, not a lot of focus has been on the lack of inventory — which is sellers reluctant to sell, but also more than 20 years of underproducing housing coming to a head.
Let’s look at just the Cape Cod submarket of that larger region. For the last several years, Cape Cod has hovered on an average of about 2,000 single-family homes for sale at any given time. That was a historic low — at the time — and we were warning of inventory shortages then. Fast-forward to 2021, and we are averaging just 438 single-family homes for sale each month.
It’s not just that demand is up — new listings are way down. Discounting 2020, new listings in 2021 for the year through May are down by 700 from what we normally would see on the market when compared to 2019. Imagine what our market would look like today if those 700 additional new listings had come on.
Markets around the country will restore their balance as lumber prices start to go down, permitting picks up and new inventory is created. However, that is not the case here. We are not building or permitting the ability to build new housing at any significant scale, and haven’t done so for more than 20 years.
Cape Cod was well on its way to being a place where local salaries did not keep pace with local incomes and communities. Martha’s Vineyard and Nantucket are already there.
Many want to simply put the blame on short-term rentals, but that is not the case. That is the easy thing to target, rather than taking a larger look at the systemic issues. The dynamic that led to this crisis is fueled by decades of restrictive land use laws and a lack of investment in infrastructure to properly build any new housing at any real scale.
With the median sale price in Barnstable County topping $630,000 in May, our region’s economic recovery from COVID-19 is threatened unless a solution is found to allow the Cape to sustain a year-round workforce.
Now what can be done?
Realtors are right in the middle of trying to fix the situation. In order to deal swiftly with the region’s housing crisis, a comprehensive plan should include:
- Placing all the aspects of newly passed housing choice legislation on town meeting warrants immediately so zoning and housing legislation can pass with only a simple majority vote;
- Allocate at least 50% of the revenue being derived from room occupancy tax (which includes short-term rentals) to housing, waste water and broadband efforts;
- Use this room occupancy tax money to fund innovative projects that help build the “missing middle” housing that is market rate and not deed-restricted on price or income;
- Dedicate at least 50% of your town’s CPA funds to housing needs;
- Accelerate your wastewater plans to ensure we have the adequate wastewater capacity to handle our current and future housing needs;
- Lastly, overhaul zoning to reduce minimum lot size, remove barriers to development and get unnecessary obstacles out of the way, and let the market build the housing it needs to sustain a future for Cape Cod.
We have a lot of interests that compete for attention on Cape Cod: the climate crisis, the water quality crisis, the lack of year-round paying jobs, poor broadband service — but in the end, it all doesn’t matter if we cannot house a year-round community. We need to stop making excuses and realize it’s the lack of available housing that is the problem.