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For local employers, long-term staff vacancies, difficulty in recruiting and retaining talent, and lost revenue are now just a part of doing business in our region. Businesses attribute these challenges to a single root cause: the high cost and low availability of housing for the workforce. This issue impacts both year-round and seasonal businesses, with reverberating impacts on local tax collection, economic vibrancy, and resident quality of life. 

So, what is being done about it? 

As described in a previous edition of the CEO Corner, we have worked to better define the Chamber’s role on housing issues, outlining a set of policy and program priorities focused on supporting a vibrant, year-round regional economy through housing that meets the needs of the workforce. We talked to the Healey-Driscoll Administration, and they listened. 

The Chamber recently submitted testimony on H.4138, the Affordable Homes Act, filed by Governor Healey. The capital investment and policy initiatives proposed in H.4138 are structured to provide communities with different and varying tools to address housing needs. The Governor’s legislation demonstrates an understanding that solutions to our state-wide housing challenges cannot be achieved through a one-size-fits-all approach. Cape Cod communities – with their high seasonality, outdated infrastructure, and a growing number of non-resident property owners - require unique solutions that may not suit other regions of the Commonwealth.  

The Cape Cod Chamber supports the following proposals included in H.4138: 

Seasonal Community Designation

This initiative would result in a new “Seasonal Community Designation,” modeled after the state’s existing Gateway Cities Designation. Under Massachusetts General Law (Chapter 23A, Section 3A), a Gateway City is a municipality with a population greater than 35,000 and less than 250,000; a median household income below the state average; and a rate of educational attainment below the state average. Gateway Cities are eligible for special funding and technical assistance programs not available to most communities on Cape Cod (only Barnstable is currently designated a Gateway City). For our region, the traditional indicators used to determine state funding and technical support – such as year-round population and area median income – are skewed by the high proportion of seasonal residents and non-resident property owners. In some parts of the region, part-time residents now far outnumber year-round residents, and population can increase by five-fold or more in the busy summer months. This means Cape Cod towns bear the infrastructure wear and municipal service needs of much larger communities, without access to specialized state funding, tax credits, or technical assistance available through programs like the Gateway Cities Designation. Creation of a special Seasonal Communities Designation could provide needed tools and funding for Cape Cod towns to address the significant population swells, infrastructure burdens, and environmental impacts that can accompany a highly seasonal economy. 

Real Estate Transfer Fee

The Affordable Homes Act proposes an optional municipal tax on real estate transactions above a certain amount. This fee on high-dollar real estate transfers could generate much-needed revenue to fund production of housing across all income levels, acquisition of year-round deed restrictions (to preserve year-round housing stock), and housing-related infrastructure, such as public sewer, water, and transportation projects. Towns could choose to implement the transfer fee, or not, and would also determine the transfer fee amount (between 0.5% and 2%) and any exemptions. The transfer fee holds particular appeal as a tool for funding “missing middle” housing – housing that meets the needs of local workers and employers but does not qualify for low-income housing tax credits or other subsidies.  

By-Right Multi-Family and ADU Zoning

According to the Cape Cod Commission's Draft Regional Housing Strategy, less than 4% of Cape Cod’s zoned land is zoned by right for multi-family housing. This means that, across the region, duplexes, apartments, or condominiums cannot be built except through a special permit. This costly and time-consuming process can result in months or years of local review and hearings, leaving ample opportunity for local opposition. The high risk and cost-burden associated with local project review effectively discourages quality, small-scale developers from building the exact type of housing we are lacking: starter housing for first-time homebuyers, year-round workforce housing, downsized housing options for seniors, and redevelopment of underused commercial properties to house seasonal workers. The Cape Cod Chamber supports streamlined production of multi-family and ADU housing through by-right zoning in residential districts that are supported (or will be supported in the future) by public sewer infrastructure.  

What's next?

If enacted by the legislature these provisions are important tools to help the region respond to the housing challenge. The Affordable Homes Act recognizes that the state-wide housing challenge impacts Cape Cod differently than the rest of the state. There is a lot more work to be done on this side of the Canal to make state efforts fruitful and timely. The Cape Cod Commission’s Regional Housing Strategy is an important framework for action. We will discuss that effort in a future issue of the Collective.