Spurred by recent new development proposals and heightened conversation around the Island’s housing shortage during the recent political season, the Martha’s Vineyard Commission has taken steps to overhaul its affordable housing policy for developments of regional impact.

Changes to the policy include a stronger push for developers to give either land or buildable lots rather than money to mitigate the impact of a project. The new policy also would quadruple the current monetary mitigation for commercial developments, as well as expand the definition of affordable housing to include homes between 80 and 150 per cent of the area median income (AMI).

At a public hearing for the proposed changes on Thursday evening, commissioner Fred Hancock presented the new guidelines as a needed redesign of an antiquated and toothless two-decade-old affordable housing policy.

“Our existing housing policy was approved in 1998, and obviously things have changed considerably since 1998,” Mr. Hancock told the commission. “We want to say, there is no free lunch here.”

This past winter, plans for a 34-lot market rate subdivision came before the commission for review. Under the old policy’s guidelines, subdivision applicants could either give ten per cent of the buildable lots for affordable housing, or pay a monetary mitigation equivalent to 20 per cent of the assessed value of the property. Developers had paid $6.6 million for the land in Edgartown, but it was assessed at $2.4 million, meaning the affordable housing offset only amounted to $500,000.

Although the project remains on hold, and developers have offered to pay over $1 million in mitigation since, commissioners still felt their old policy was inadequate for present-day circumstances. A committee spearheaded by Fred Hancock and including Christina Brown, Joan Malkin, Leon Braithwaite, Linda Sibley and Richard Toole worked over the winter to craft changes to the policy.

With the new guidelines, the commission, rather than the applicant, holds discretionary power to determine which form of mitigation — homes, lots, or money — best addresses the Island’s housing problem. An applicant’s proposed form of mitigation will be factored into the decision regarding the overall benefits and detriments of the project. For example, the commission may require a 34-lot subdivision to provide three dwellings or buildable lots, and then offset the remaining 0.4 lots in monetary mitigation.

Rather than using the assessed value of the lots, monetary mitigation will also now come from the market value of the proposed homes. In the new policy, the commission also reserves the right to increase zoning density to allow for affordable housing units.

The commission heard considerable public comment on Thursday about the policy changes. Doug Ruskin, who serves on the board of the Island Housing Trust, supported the changes but said developers should have to give 20, rather than 10 per cent of buildable lots to affordable housing. IHT board member Dan Seidman argued that accepting any monetary mitigation on larger-scale defeated the purpose of the policy changes.

Jim Bishop, who serves on the Oak Bluffs affordable housing committee, said that while he also hoped the commission would request land rather than monetary mitigation, he hoped the monetary mitigation would go to municipal housing trusts in the town of the respective project, rather than another housing entity, like the Island Housing Trust. Others said squabbling over who received the money should be secondary to the broader issue of the Island housing shortage.

“I urge you to think of this as a public health issue,” said Bob Laskowski, a physician who is a member of the Dukes County Health Council. “It’s not about the political issue of who controls the money.”

Edgartown attorney Ben Hall Jr. felt the new mitigation policy would prevent Islanders from pursuing small, incremental developments to their property.

“I’m a little concerned that what is happening is that the policy is reaching so far,” Mr. Hall said. “It is pricing the little people, the locals, out of the ability for themselves to improve their businesses, their small piece of the pie.”

Both David Vigneault, the executive director of the Dukes County Regional Housing Authority, and commissioner Gail Barmakian, thought expanding mitigation to include housing at 150 per cent of the AMI would hurt affordable housing efforts on the Island.

“There’s not enough encouragement for affordable,” Ms. Barmakian said. “What’s going to discourage people to not provide for people at 150 per cent of the AMI, because aren’t they going to lose less money on that?”

Commissioners decided not to vote on the policy changes, but left the public hearing open for another week to allow for additional written comments.

“Thank you for your comments. This is the biggest, burning issue we have,” said commission chairman Douglas Sederholm.

In other business, the commission decided to keep open a public hearing on the proposed Wampanoag bingo hall until July 11. A federal judge ruled last week that the tribe must adhere to local permitting laws before beginning construction on the facility.

The tribe has not participated in the commission’s review process thus far. Mr. Sederholm said that had not changed on Thursday.

“In a nutshell...they have to abide by local regulatory laws. That includes us,” Mr. Sederholm said. “We have before us a DRI in which the tribe has declined to participate, and has not responded to our requests for information which we put in writing.”

He said because the tribe still has 30 days to appeal the recent decision, the commission would keep the public hearing open to give the tribe the opportunity to participate.

“It’s possible . . . the tribe will decide to play ball, and seek a building permit, and participate in the DRI process,” Mr. Sederholm said. “It’s possible, I’m not optimistic that they will. But it’s only fair to give them that opportunity until the period to appeal ends.”

MVC executive director Adam Turner also requested the commission extend its credit line $145,000 to cover outstanding legal and operating expenses. He said the commission was waiting on receivables from Island towns, as well as grants, but needed to cover a “cash crunch” at the end of the fiscal year.

“We have legal expenses, mainly,” Mr. Turner said. “And shot our budget at the very end of the year . . . our legal bills are really high.”

Curt Schroeder, administrator for the commission, said that of the $90,000 in legal bills, about $60,000 was due to potential litigation with the tribe. While commissioner James Joyce said that seemed like a lot of money, commissioners Linda Sibley and Mr. Sederholm defended the spending.

“We’ve been involved in a number of historic cases, and the important thing has been to defend the authority of the commission,” Ms. Sibley said.

Commissioners voted to extend the organization’s credit line, with Clarence (Trip) Barnes 3rd opposed.

A public hearing on the Mill House development was continued to July 25. The house, which was demolished in early spring, will go before the Tisbury historic district commission July 10.