WHEN ALISA MAGNOTTA first got her place in Orleans, she did what many a Cape Cod resident might do in the prime vacation months: put the house up for rent and camp out in her mother-in-law’s backyard.
It was more than two decades ago – years before Airbnb was even a twinkle in the eye of Silicon Valley roommates – and it was fairly normal practice for people on the Cape to hand off their homes to summer renters to help pay for expenses the rest of the year. Even nine-month rentals, where people used a house as a summer home but rented it out during the off-season, were common, Magnotta said, which ensured these small towns had a vibrancy and fairly steady population around the calendar year.
But, after the short-term rental industry and pandemic patterns reshaped seasonal communities like Orleans, Massachusetts is grappling with what it means for a state with a crippling housing crunch when almost 120,000 units sit vacant at any given time because of part-time or seasonal use.
Some of that use is still in line with the long-term renting patterns of old, but state housing officials say seasonal community homeowners who may have previously made unoccupied units available for year-round rentals now lean toward short-term higher-revenue rentals. Plus the pandemic ushered in more wealthy vacation home buyers with no need to manage a tenant during off-seasons.
“It’s not that there’s a shortage of housing units, it’s a problem of how they’re used,” said Magnotta, still a year-round Orleans resident and CEO of the Housing Assistance Corporation, a non-profit focused on housing access on the Cape and Islands. Population dwindles in the off-season, but areas like the Cape are home to people throughout the year, and Magnotta says “a lot of housing is not being used in a way that makes sense for year-round communities.”
Gov. Maura Healey’s sweeping housing bond bill included several provisions that help or target this type of community, creating a seasonal communities designation and Seasonal Communities Advisory Council. Seasonal communities automatically include all municipalities in the counties of Nantucket and Dukes, including Martha’s Vineyard; plus municipalities with over 35 percent seasonal housing units in Barnstable County and more than 40 percent in Berkshire County.
It’s something of a riff on the state’s Gateway Communities designation, said state Sen. Julian Cyr, who represents the Cape and Islands and championed the policy, in that municipalities with common histories and conundrums can get targeted policy and funding support.
“It’s applying that framework to towns with high vacancy rates and fluctuating populations,” Cyr said of seasonal communities. In a state where many local initiatives need buy-in from an entire state Legislature, Cyr describes the seasonal communities program as crafting a “toolkit, so that towns do not have to go through the home rule process” if they want to start housing subsidy programs or impose deed restrictions that would require year-round rentals.
Cyr, a Truro native who has watched his hometown dwindle to less than 2,000 year-round residents, describes the situation as a “real existential crisis for us. Our communities are eroding a heck of a lot faster because of the housing crisis than anything that’s happening with seas or climate change.”
Healey’s new statewide housing plan and needs assessment lays out the scale of the problem: 220,000 more units needed by 2035 to meet demand and get a handle on housing costs.
Massachusetts, which has the second highest cost of living in the country, is dealing with a mismatch between available units and demand. It needs new units to keep younger people from moving away, address existing overcrowding, and account for younger generations expanding their families. Older households dissolving, downsizing, or moving away will not happen fast enough to meet unit demand, the housing plan and needs assessment states.
Meanwhile, a slew of units sits fallow. Between 2018 and 2022, there were about 258,000 vacant units at any point, the Massachusetts housing needs assessment estimates. But only 47,800 – less than one fifth of all vacant units – were available for sale or rent. Others were being held for seasonal use, had been rented or sold but not yet occupied, or were vacant for another reason.
This represents a 40 percent decline in available vacant units compared to the late 2000s, a period of time including the 2008 housing bust and subsequent Great Recession.
According to the assessment, that means that only 1.6 percent of all homes in the state were available for sale or rent in 2022. A “healthy” vacancy rate is often considered to be roughly 2 percent for home ownership and 6 percent for rentals.
Some 118,000 units – almost half of all the vacant units and 4 percent of the state’s housing stock – are reported as being used for “seasonal, recreational, or occasional use.”
Cyr and Magnotta are quick to acknowledge that seasonality has always been a part of the Cape’s identity, but the rise of short-term rentals was a pivot point and the COVID-19 pandemic wave of wealthy vacation house buyers was another.
“There was a real ability to wash ashore here and make a life, particularly on a remote place like Cape Cod,” said Cyr. He describes his parents leaving Connecticut in the 1970s, casting off to Provincetown to bartend and wait tables as older teens. “They were able to buy a house on the salary of a bartender and waiter and then opened a restaurant, and that was a common experience,” Cyr said. Now, “to be able to make that happen, you have to have a combination of wealth, backing, or incredible real estate acumen.”
On Nantucket and Martha’s Vineyard, 60 percent of homes are used as seasonal residences or for short-term rentals, and on Cape Cod, it’s 36 percent. Though the Berkshires lag behind at 13 percent, residents can see the writing on the wall.
Looking at the Cape and Islands, “we’re heading in that direction,” said real estate agent Cameron Volastro, a native of the Berkshires who sits on the Community Development Corporation (CDC) of South Berkshire board and the seasonal communities council.
The CDC works to provide low- to moderate-income rental apartments, while Volastro’s work at Stone House Properties often involves helping buyers find second homes in the area. It’s as expensive to build in the Berkshires as anywhere else in the state, so the region’s existing aging housing stock is the target for those who want to live there permanently or keep it on as a personal vacation escape.
“I see the value of the tourism driven to the area and of course I totally understand the attraction to the area,” said Volastro. “It’s the backbone of our local economy, so it brings some ups and downs.”
The ups are more property tax dollars, a busy tourism season, and theoretically an influx of new full and part-time residents. Those who want to rent their houses in the short-term, as Magnotta has in the past, can optimize their rental income by nights of highest demand rather than months.
The downs are system strain. Cape Cod, the Islands, and Western Massachusetts lost an estimated 9,000 year-round homes to seasonal conversion from 2010 to 2020.
Since the start of the pandemic, many units were wholly taken off the market by buyers who would rather have a vacant vacation home than deal with a tenant. The year-round population is declining because of housing costs, leading to plummeting school enrollment. Seasonal and year round workers either cram into small units or have to commute each day due to lack of appropriate housing. Plus, the housing crunch means these small towns have issues attracting and retaining essential workers like public works employees, needed to upgrade utility systems to support larger and more elaborate homes.
This has created a significant workforce and schooling crisis in many of the small towns, Cyr notes.
“It’s not the heartfelt cry of ‘We grew up here and have to live here,’” Magnotta said. “The reality is the town can’t function.”
There’s also the sense of uneasy stillness in the off-season.
Cyr, speaking from his rented home in Provincetown, said Cape towns have seen a drop off in population after the brief flee-the-city boomlet of the pandemic. Now, with no neighbors on either side of him in mid-February, the senator said it’s “the quietest winter I can remember.”
The seasonal communities council, which first met last December, includes representatives from the Cape, Islands, and the Berkshires, who are tasked with providing advice and recommendations on policies or programs that could benefit seasonal communities.
The advisory council in its initial meeting considered policies now available to seasonal communities, including adopting tiny home policies, encouraging more accessory dwelling unit construction, prioritizing municipal employees or artists for housing, and increasing the property tax exemption for full-time residents. Some part-time residents, the Cape Cod Times reports, also want a seat at the council table.
As the council deliberates, Cyr says to expect a return of the real estate transfer fee effort, which isolated and expensive areas say is essential to shore up workforce housing but skeptics say would only benefit wealthy communities because they are the ones with the expensive housing to leverage.
For many seasonal community residents, single family homes on large lots are core to Cape, island, or mountain life. Housing advocates say they understand that, but the housing style is out of step with a changing reality that calls for strategic density. The regions are simultaneously tourist destinations and naturally occurring retirement communities, aging faster than the rest of the state with limited appetite for new housing even as demand grows and prices spike.
“We’re not ‘build, baby, build,’” Magnotta said. “I live there. We have to be good stewards of where we live.” But just as Volastro looks at the Cape as a warning for the Berkshires, Magnotta looks at certain parts of Nantucket and Martha’s Vineyard, closed off to all but wealthy part-timers, and worries about the Cape following along.
If a sea change doesn’t come, she said, “It’s going to be a museum.”
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