With an affordable housing crisis spreading across the commonwealth, state legislators on Beacon Hill this week took up a controversial bill to create a Martha's Vineyard Housing Bank. Senators from western Massachusetts to the Cape and Islands debated whether the Vineyard housing predicament warrants special legislation.

Sen. Michael R. Knapik of Westfield argued that adding another tax to the real estate industry would have a detrimental effect in Massachusetts, the only state in the country that lost population each of last two years. He urged his fellow legislators to hold off on the Vineyard proposal and tackle the growing problem statewide instead.


"I don't think this should begin and end with Martha's Vineyard - the housing crisis is much more severe than that," said Senator Knapik, a Republican. "This is too far a leap forward for too small a portion of commonwealth."

Cape and Islands Sen. Robert O'Leary agreed that the state legislature needs to improve its comprehensive housing policies, but said that was no reason to defeat a homegrown initiative.

"I do not think that, because we have a larger problem statewide, we should step in the way of a community that is wrestling with the issue in a thoughtful and passionate way and is attempting to mitigate some of the serious problems playing out in their community," countered Senator O'Leary, a Democrat. "If there is any place for that to happen, in my opinion, it's on a place like Martha's Vineyard."

The remarks came during a legislative hearing on Tuesday held by the joint committee on revenue, of which both senators are members.

Roughly three dozen Vineyard residents and housing bank advocates traveled to Boston to attend the hearing and canvass the offices of senators and representatives from across the state. Nine Island residents testified during the hearing in support of the bill.


Modeled after the Martha's Vineyard Land Bank, the proposed housing bank would generate roughly $2 million per year for affordable housing projects through a seller-paid transfer fee on Island real estate transactions. Voters in all six Vineyard towns approved the concept in a nonbinding ballot initiative last spring, and, if passed by the state legislature, the proposal would still require another round of support by Island voters.

Senator O'Leary and Rep. Eric T. Turkington filed the housing bank bill last fall and have said candidly that the legislation faces an uphill battle to passage. While the bill still must go through the senate ways and means committee before reaching the floor for a vote, the active participation by revenue committee members during the hearing this week indicates that the bill has attracted attention from across the state.

Legislators typically approach local taxing initiatives with caution, but Senator O'Leary has suggested that the success of other Vineyard and Nantucket organizations established by the state - such as the Island land banks and the Martha's Vineyard Commission - might tip the balance the other way. He made a similar argument before his colleagues on Tuesday.

"I call them the Canary Islands, because they're like canaries in a coal mine," Senator O'Leary said. "Because they are Islands, they have a sense that they can do things a bit different and be more aggressive in trying to resolve their problems. The land bank efforts started on the Islands, and frankly we wouldn't have a statewide land bank or the CPA [Community Preservation Act] if it weren't for Martha's Vineyard and Nantucket."


It was 20 years ago this month on Beacon Hill that then-governor Michael S. Dukakis signed the Vineyard land bank legislation into law. The Nantucket Land Bank preceded the Vineyard by two years.

Vineyard residents and their elected officials on Tuesday made the case that the housing crisis on the Islands is more acute than elsewhere in the state.

Martha's Vineyard Co-operative Bank president Richard Leonard, who is also chairman of the housing bank coalition, provided revenue committee members with statistics that show the average Vineyard income is 30 per cent below the state average, while housing costs are 80 per cent higher. Island incomes have increased 17 per cent since 2001, Mr. Leonard said, while the cost of housing has increased 80 to 85 per cent.

Representative Turkington testified during the hearing and pressed the point that the Island housing situations are special.

"Every place else in Massachusetts, the housing market is driven by people from this state. On Martha's Vineyard and Nantucket, the housing market is driven by bazillionaires from New York and California. They come to these two places with their checkbooks and buy whatever they want for however much they want," Mr. Turkington said. "What we are seeing on the Islands is the disappearance of the middle class. If we don't give them the resources to protect themselves, there will be nobody left on Martha's Vineyard but Brazilians and bazillionaires."

Senator Knapik replied that the Berkshires of western Massachusetts also have many large second-home landowners from out-of-state, but during his testimony Derrill Bazzy of the Aquinnah housing committee noted that the Vineyard and Nantucket are still different. "We are on an Island," Mr. Bazzy said. "There is no down the road where we can move."

Much of the off-Island opposition to the housing bank bill centers on its funding mechanism as a transfer tax. If enacted, the housing bank would generate funds through a one per cent seller-paid fee on real estate transactions. The first $750,000 of the sale price would be exempt.


Representatives from state realty organizations provided the only testimony against the housing bank bill on Tuesday. Steve Ryan, general counsel for the Massachusetts Association of Realtors, told the revenue committee that the transfer tax would create a new barrier to home ownership.

"Quite frankly, creating a new tax on home ownership is wrong," Mr. Ryan said. "There is now an entrance fee on Martha's Vineyard [with the two per cent buyer-paid land bank transfer fee]; to create an exit fee is a step in the wrong direction."

Island real estate agent Candace DaRosa of Chilmark testified that a majority of Vineyard Realtors have expressed support for housing bank legislation. This prompted revenue committee co-chairman Sen. Cynthia Stone Creem, a Democrat from Newton, to respond to Mr. Ryan's comments.

"This may seem rhetorical, but if the Realtors on Martha's Vineyard support it, why would the Realtors association take an opposing view?" asked Senator Creem. "Would it be fair to say that each community is different? What might work in one community might not work in another?"

Mr. Ryan said the association was concerned about the precedent the housing bank could create. The Vineyard is not the first community in the commonwealth to propose a transfer tax for housing causes, he noted, adding that the legislature has never endorsed it. Both the statewide Community Preservation Act and the Cape Cod Land Bank legislations were originally proposed as transfer taxes, and were later changed to property tax surcharges.

Mr. Ryan argued that the transfer tax is discriminatory to home buyers, while housing is a community-wide issue that should be paid for by the community as a whole.

Representative Turkington disagreed: "The people who will be paying for it are the ones with the big fat checkbooks from New York and California - the people who should be paying for it because they cause the problems."

Vineyard resident Michelle Aluia, who just this month received purchasing rights to a one-acre lot in West Tisbury from the town housing committee lottery, reminded legislators on Tuesday who the housing bank would benefit.

"Less than two weeks ago, they drew our names out of 24 names in a hat. We went from a future of despair to a future of hope," said Ms. Aluia, who has two small children. "As far as the other names in the hat - what can we do for them?"