The scarcity of housing for year-round Islanders is being framed as a conflict between a desire to conserve open space and a need for more houses. I suggest a different way to view it.

People tend to sell or rent their property for as much as they can get for it. They justify this by the law of supply and demand, a basic tenet of economics. Housing on Martha’s Vineyard is in short supply, therefore prices and rents go up.

But the law of supply and demand is not a causative principle, it is an observed correlation. A causative principle is exceptionless. If you push on one end of a lever with force X, the other end of the lever presses against a resisting object with force Y, and it does so every time, precisely so, with no exceptions. A statistical correlation is not exceptionless. It is a generalization about a tendency. It would be better, perhaps, to call it a correlation of supply and price, since demand is the unknown value which a seller fishes for by setting a price. If the correlation of supply and demand were an exceptionless law, merchant B would not be able to increase demand for her widgets by lowering the price, undercutting merchant A and perhaps starting a price war. Cousin Fred would not be able to sell his pickup to his friend for a price below the market value, and indeed, gifts would not be possible. (Economists finesse this by saying gift exchanges are outside the market. The circularity of this logic goes unnoticed.)

Fred is motivated to lower the price of his pickup because of a social bond of friendship. To put it in utilitarian terms, if you wish, he is recompensed for his financial loss by the privileges and advantages of friendship. More broadly, that friendship is part of a network of social bonds that make the difference between a community and a mere place where there are people. We know the value of community here on this Island.

Here is my proposal. Year-round housing is a benefit to the town and to the Island. Since it appears that not enough of us are awake to the moral imperative, or too many feel trapped by financial imperatives, this benefit should be recognized financially by compensating a property owner who rents or sells below the market rate to a year-round resident. There are many ways this could be done. The town could reduce the tax on the rental property. Ways could be found to reduce transaction costs on sales, say by the town contributing a portion of the land bank assessment. Other means of financial recognition can be found. Assessment of noncompliant rentals and sales could be increased to compensate. There are intangible ways to recognize and reward socially responsible property owners for their contribution to the benefit of our community.

Prices are not set by supply and demand, prices are set by people. We are not passive victims of economic forces. We can decide what is right and act accordingly.

Bruce Nevin
Edgartown