Beach Enclaves Of The Rich And Famous Are Building Something Unexpected: Affordable Housing

Nantucket, known as a sleepy summer destination for East Coasters and the vacation spot for celebrities like the Kardashians, has four full-time firefighters who can’t afford to live on the island and must commute an hour each way by ferry for their shifts.

The island has a median house price of $3M and limited housing options for its critical service workers and public servants, like first responders, teachers, restaurant workers and hospital staff.

“The housing problem is universal,” said Bruce Percelay, a top Boston developer who owns three hotels on the island and is chairman of Nantucket Magazine. “Everyone goes through this annual problem when the summer starts about how they’re going to house their workers, and it ranges from the landscapers to restaurants to the museum and beyond.”

But the tide appears to be turning. Nantucket residents this week voted to put $6.5M in taxpayer funding toward affordable housing, and last year they passed a $40M plan that represented the largest housing initiative in the island’s history.

And it isn’t alone, with at least two other popular East Coast beach destinations known for a lack of housing options passing affordable housing plans over the last six months.

In February, the Myrtle Beach City Council in South Carolina passed a workforce housing plan aimed at addressing a glaring issue: only 6,000 of its 41,000 full-time employees live within city limits. In November, three New York towns in the Hamptons voted by wide margins to approve a tax increase to fund new housing.

"The public clearly saw the need to do something about affordable housing," said Michael Daly, a real estate broker and co-founder of the East End YIMBY group that pushed for the plan in the Hamptons. “The campaign was focused on teachers, firefighters, EMTs, healthcare workers, seniors and young people who grew up here, who the majority of people believe should be able to stay here and live here."

On Tuesday, Nantucket’s residents voted to endorse a permanent $6.5M tax override for the island’s affordable housing initiative, the Nantucket Current reported. The vote is the latest sign that public sentiment on affordable housing is changing, said Tucker Holland, the island’s municipal housing director.

“Seasonal and year-round residents alike are tuned in to this issue, but it doesn’t mean there isn’t some element of NIMBY here,” Holland said. “That sentiment is pretty limited these days. You can’t be associated with the island and not be directly affected or work with someone affected by the housing crisis.”

That NIMBYism popped up last month when someone anonymously sent the Nantucket Select Board a bumper sticker that read: “If you want affordable housing, move to Cape Cod where you belong.”

In a survey of Nantucket employees in 2022, 50% of respondents said they were housing-cost-burdened, with half of those saying they were extremely housing-cost-burdened. The median sale price for homes in Nantucket jumped 92% over the last five years, from $1.3M in 2017 to $2.5M in 2022.

In May 2022, Nantucket residents approved more than $40M toward housing initiatives, including ​​$11.6M to construct affordable housing on three sites the town previously acquired, $10M to build a 12-unit project on another town-owned site and $8.5M for a dorm-style building for town employees, the Nantucket Current reported.

With a finite amount of land on an island locked in by the ocean, zoning for higher densities is a big issue that has yet to be addressed, said Percelay, chairman of The Mount Vernon Co. 

Nantucket owns over 50% of the land on the island, which it protects and preserves through the Nantucket Conservation Foundation, Nantucket Land Bank and other land trusts.

“There’s a larger issue at play,” Percelay said. “I feel like it could be solved by zoning specific areas for high density without having it scattered around the island. Without question, the island really covets the small-town feel.”

Percelay said he was faced with the challenges of finding housing for his employees at the hotels he owns and at Nantucket Magazine. He said the issue is more prevalent in the summer months when the island sees the most activity from tourists and seasonal residents.

Holland said Nantucket has looked to others that have started to make progress toward their workforce housing initiatives.

In Vail, Colorado, the city established its Vail InDEED program, which incentivizes homeowners to deed-restrict their properties to help the town meet a goal of acquiring 1,000 deed-restricted units by 2027. Since 2017, the city has funded over $12M for 174 units, according to the city’s summary of Vail InDEED transactions to date. The housing is used for year-round workers, Holland said.

“That’s a program that we’re looking at doing some version of here,” Holland said. “There’s a little bit of a difference in the markets from Vail to here.”

Even the Hamptons, historically known for its pushback on affordable housing development, approved a 0.5% transfer tax to fund housing initiatives in November. Three towns – East Hampton, Southampton and Southold – voted in favor of the tax, The Real Deal reported.

Daly said he co-founded the East End YIMBY advocacy group as a response to the pushback that residents have given to any affordable housing creation.

“We put a majority of our efforts into educating and campaigning the community housing fund along with other organizations and community leaders,” Daly said. “We do believe the bar of awareness has been raised by local elected officials.”

In February, East Hampton’s town planning board looked favorably on a 16-unit affordable housing project at 395 Pantigo Road, the third affordable housing project moving forward in the town. The town purchased the site with community preservation funds and added it to its Affordable Housing Overlay district last year.

The town has made other strides, including looking at permitting more granny flats, also known as accessory dwelling units, that homeowners can put on the grounds of their property as a rental. Daly said that although there is progress, there is still room for education for residents that don’t understand the need for more affordable housing.

“The education that is required to unravel these generations and generations of zoning that have become increasingly restrictive and formed in ways to maintain the status quo rather than be adaptable to changing communities,” Daly said. “It’s a big, hairy ball of wax.”

Myrtle Beach has also made strides to address its housing crisis. In January, the nonprofit housing organization Habitat for Humanity of Horry County published its workforce housing strategic plan in response to a 12-month study that included input from employees, residents and employers. And this February, its city council passed a plan to build more than 500 units every year for the next 10 years, with a shift toward smaller apartments.

“The more workforce housing the city can provide, the more people can actually live, work and be in the city of Myrtle Beach,” Drayton Arnold, the assistant to the city manager, told Bisnow.

More than 35,000 employees commute to work in the city, and nearly 4,400 workers commute 50 miles or more each day, according to the plan. For those living in the city, 40% of all Myrtle Beach households said they are housing-cost-burdened with 30% or more of their income going toward housing.

Arnold said the plan didn’t receive any public pushback.

“We realize that workforce housing is a need in our community, and we’re working to take steps to implement these changes,” he said.

Although these vacation towns and cities are far from solving their affordable housing shortages, Holland said he hopes that Nantucket can begin to step up as a leader in the realm.

“Nantucket has been a leader in conservation, historic preservation, and housing is the third pillar where we can really do something special,” Holland said.