Gov. Maura Healey unveiled a $4 billion statewide housing plan this week that includes a local option transfer fee, a provision that Islanders have sought for years to help fight the Vineyard’s housing crisis.

The governor’s bill, titled the “Affordable Homes Act” and filed Wednesday with the state legislature, would allow communities the option of adopting a real estate transaction fee of .5 per cent to two per cent on property sales over $1 million, or the county median home sale price, whichever is greater.

For the Vineyard, the county median home sale price in the second quarter of 2023 was $1.39 million.

The state expects the fee would apply to fewer than 14 per cent of all residential sales across the state. Under the bill, the fee would be paid for by the seller of the property, with money going to affordable housing developments within the community.

Island Housing advocates were pleased with the transfer fee and other provisions in Ms. Healey’s massive housing push, which she said was the largest ever in the state.

“As you can imagine, we’re just completely thrilled,” said Julie Fay, the co-chair of the Coalition to Create a Martha’s Vineyard Housing Bank, a group that for the past three years has pushed legislators to allow a local option transfer fee on the Island. “The governor heard our urgency to create a path to building housing on the Island, and that is huge.”

All six Island towns voted last year to petition the state to allow a 2 per cent transfer fee on most real estate transactions higher than $1 million. The resulting revenue would then be put in a bank for the purpose of building more housing on-Island, much in the way that the Island’s land bank operates.

The transfer fee language in governor’s bill differs in one significant way from what the town meetings petitioned for in the creation of the housing bank. The Vineyard proposal was proposed to be paid for by the buyer, not the seller.

Advocates noted that Gov. Healey’s bill includes specific language allowing not only individual cities and towns, but “regional affordable housing commissions” to administer the transfer fee, paving the way for a possible Islandwide approach to affordable housing.

Hundreds of Islanders went to Beacon Hill earlier this year to make the case for a housing transfer fee and champion a Vineyard housing bank.

In-person hearings for the state housing bill took place last week and included testimony from state Sen. Julian Cyr, who represents the Vineyard. While no one from the Vineyard spoke, Ms. Fay said that Islanders submitted over 350 pieces of written testimony in support of the housing bank and transfer fee.

Other communities across the state have also advocated for transfer fees, but the efforts did not have the backing of former Gov. Charlie Baker. To now have the governor’s backing is a “game changer,” said state Sen. Julian Cyr.

“What this does is it resets the table on the conversation,” Mr. Cyr said Wednesday. “It’s a bold proposal by the governor and it shows she’s really listened to Cape and Islanders.”

State Rep. Dylan Fernandes said the bill delivered on a promise to Cape and Islanders struggling to keep a foothold in the region’s runaway housing market.

“I thank Governor Healey for her leadership in putting forward legislation that meets the moment,” Rep. Fernandes said in a statement. “This bill empowers our towns and cities with the flexible and powerful tools they need to provide fair, dignified housing to our communities.”

Other housing advocates, though, believe that the legislation could have gone further.

“I’m disappointed it didn’t come out as an executive order because that would mean we’d have a transfer fee today,” said Lucy Morrison, the chair of the Edgartown planning board and a member of the Martha’s Vineyard Commission’s housing action task force. “It’s a win, but just not as big of a win as it could have been.”

Gov. Healey’s proposal also includes the creation of a seasonal communities designation and a council that would provide recommendations to the state’s Executive Office of Housing and Livable Communities regarding potential regulations for towns that see large fluctuation in employment and housing needs throughout the year. The bill also offers a potential local option property tax exemption for the development of year-round rental units.

Martha’s Vineyard Commission housing planner Laura Silber said the seasonal communities designation would open up the Vineyard to an entirely new set of tools, programs, and permissions to address the local housing crisis. Those allowances, she said, would in turn help her goals to create a municipal workforce housing program, a year-round deed restriction program, or any other programs the state does not currently allow.

“Rather than having to chip away at each individual ask, this designation would allow us to compile and receive them as one whole toolkit,” Ms. Silber said.

The bill also would allow accessory dwelling units less than 900 square feet by right throughout the state, though communities would be able to set some restrictions.

Advocates said that while it may be too early to tell the bill’s impacts for the Island, language like the accessory dwelling unit expansion and seasonal communities designation could go far in addressing the Island’s housing crisis.

Mr. Cyr said that many of the details in the bill could change as the bill works its way through Beacon Hill.

In the meantime, housing advocates are continuing to explore a litany of methods to address the Island’s housing crisis. Most recently, Ms. Morrison said the MVC housing task force met with planners from Provincetown to discuss ways the other Cape resort community has attempted to ease its housing burden.

“There’s no one silver bullet solution,” she said.