Senate Debates Housing Bank
Legislation Laid on Table Twice, but Senate Vote Expected Soon; Robert O'Leary Speaks Out for the Cape and Islands
By IAN FEIN
Special legislation to create a Martha's Vineyard Housing Bank is nearing a vote in the Massachusetts state senate.
The housing bank bill came to the senate floor each of the last two weeks, but both times was postponed by parliamentary procedure. The senate is expected to take up the bill again next week, and supporters and opponents are headed to the state house on Monday to lobby senators in anticipation of an upcoming vote.
Cape and Islands Sen. Robert O'Leary sparked a short debate on Wednesday when he formally introduced the bill to his senate colleagues.
A State House News Service transcript of the senate session captured the debate. "[Island residents] are simply asking this body to give them the ability to preserve their community. How can we deny that request? How can we say you can't have teachers and plumbers living in your midst?" asked Senator O'Leary. "Their housing situation is driven by forces beyond their control. These prices are beyond comprehension. We have to provide them with some options."
Sen. Richard Tisei of Wakefield, a real estate agent who also owns a home on Massasoit Road in Edgartown, argued against the housing bank bill on Wednesday. Despite support from Island real estate agents, the legislation has drawn opposition from the Massachusetts Association of Realtors because it proposes a one per cent transfer tax on most real estate transactions.
"I do love it on Martha's Vineyard, and I want the Island to stay as nice as it is now," Senator Tisei said. "You can say this is a tax on the rich, [but] it doesn't work like that in a real estate transaction. You are just putting another impediment and making it more difficult [for someone to buy a home]. Ultimately the buyer will pay."
Modeled after the Martha's Vineyard Land Bank, the 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.
With less than two months left in the legislative term, housing bank advocates are hoping that the senate will act on the bill soon. If both chambers do not adopt the legislation by July 30, the bill will have to be reintroduced next fall and return to committees for review.
"We're working hard to get it through the senate, and we hope to get it through soon," said Martha's Vineyard Co-operative Bank president Richard Leonard, who is chairman of an ad-hoc housing bank coalition on the Vineyard. "I'm optimistic that we'll get the senate's support, and we're looking forward to having an opportunity in the house."
Because the state legislature typically eyes local tax initiatives with caution, Senator O'Leary and other housing bank supporters have said candidly that the bill faces an uphill battle to passage. But it received a boost earlier this spring, when, after months of review, the joint committee on revenue awarded it a favorable recommendation.
Giving the bill more weight on Beacon Hill, the senate ways and means committee last month also amended the legislation to simultaneously create a Nantucket Housing Bank, which would mirror the Vineyard version with only slight modifications. If approved by the state legislature, the Vineyard and Nantucket housing banks would be distinctly separate entities, and neither the dissolution nor the failure to adopt one would affect the other.
Nantucket was added to the Vineyard bill because the revenue committee found the transfer tax concept more favorable than an earlier Nantucket proposal, commonly known as the McMansion tax, which would have raised funds for affordable housing by taxing the construction of new homes in excess of a certain size.
Though it has not yet come before Nantucket voters, the new housing bank proposal has received votes of support from a wide array of island organizations, including the board of selectmen, planning and economic development commission, builder's association and association of real estate brokers. Nantucket Housing Office executive director Leedara Zola said this week that advocates there were glad to be tied together with the Vineyard.
"When you're in a community at such crisis levels as Nantucket and the Vineyard are, people understand the problem," Ms. Zola said. "There is much to be gained by joining together. It's nice to have the support of our sister Island, and it's nice to work together."
Mr. Leonard agreed with Ms. Zola. "Anytime we can work together on a common problem is great," he said.
To reflect the different real estate markets on the two Islands, the transfer tax exemption price would be substantially higher on Nantucket than on the Vineyard. The first $750,000 of a sale price would be exempt from the one per cent tax on the Vineyard, while the first $2 million would be exempt on Nantucket. Also, because Nantucket is a single town, its housing bank would have a single advisory board, instead of the six on the Vineyard.
The Island partnership is somewhat ironic because the transfer tax concept actually originated on Nantucket. The Martha's Vineyard Land Bank, which served as the inspiration for the housing bank, was modeled after an earlier version on Nantucket. The Nantucket and Vineyard land banks raise funds for conservation purchases with a two per cent transfer tax levied on buyers of most real estate transactions.
Both Senators O'Leary and Tisea cited the Island land banks in their comments on Wednesday. Senator Tisea praised the Martha's Vineyard Land Bank, but blamed it for the housing crunch.
"There is a two per cent transfer tax on the Vineyard for land acquisition, and they have been so successful with it that there is no land left for affordable housing. So the prices, supply and demand, have shot up through the roof," Senator Tisea said, according to the transcript. "This bill is the wrong way to go."
Senator O'Leary used the Island land banks to rebut concerns raised by the statewide realty association and echoed by Senator Tisea that the Islands transfer tax would spread elsewhere in the state. Meanwhile, some 70 Vineyard real estate agents yesterday signed a letter to senators in support of the housing bank, and the Nantucket Association of Real Estate Brokers sent a similar letter last month.
"Some people in the real estate industry are concerned the tax will set a precedent and come to shore, so to speak. I can assure you that that will not happen," Senator O'Leary said on Wednesday. "The Islands have a history of transfer taxes that have not come ashore. They have transfer taxes for open space.
"The irony here is the marketplace is pricing out of housing and shelter the very people [Senator Tisei] suggests we need to protect," Senator O'Leary said. "The reality is we need to do something."