Cape Cod faces extraordinary housing challenges: One in ten homes is a short-term rental and another 25% of all homes are set aside for seasonal or occasional use. Prices are unattainable for middle income households, not to mention seasonal service workers. Housing development is limited by zoning constraints, exposure to climate risk, lack of water supply, and sensitive environmental resources. Older Adults already comprise one-third of the Cape’s population and head up half of its households. The region is projected to see continued population declines over the coming decades, no growth of under-60 households, and large increases in householders over the age of 75. While there is no net growth in housing demand projected for the Cape, the region has significant housing needs. New homes are needed to make up for anticipated loss of year-round units to seasonal use; and additional low-income households are needed, either through new production or conversion of existing units.
Cape Cod Housing Overview
The Cape Cod region includes 15 towns that make up Barnstable County and the ancestral land of the Mashpee Wampanoag tribe. These coastal towns include suburban neighborhoods, town centers, and scattered rural homes, and the relatively urban downtown Barnstable. The region has long attracted tourists, second homeowners, and retirees attracted by the many beaches, ponds, and natural amenities. Historic development patterns and current zoning and regulatory factors encourage single-family homes in the region. Seventy-nine percent of the land in Barnstable County is zoned to allow single-family homes, 23% is zoned to allow for two or more units, and just 2% of land is zoned to allow three or more units.
As a major tourist destination, second homes and short-term and vacation rentals occupy a significant portion of the region’s housing supply and limit options for year-round residents. Approximately 36% of housing units in Barnstable County were classified as “seasonal, recreational, or occasional use” properties; and 10% of the homes in the region were listed on the short-term rental registry and actively rented. For property owners, short term rentals are more financially advantageous than year-round usage: at an average daily rate of nearly $400, a property owner could provide short term leases for just 52 days per year and earn the same amount as the median year-round rent. The share of seasonal units is growing. EOHLC estimates that 5,800 year-round homes were converted to seasonal use over the period 2009 – 2019, almost 6% of the total year-round homes.
The most recent Cape Cod housing needs assessment found that in 2022, a household would need to earn $210,000 annually to be able to affordably purchase a median priced single-family home, far exceeding the 2022 estimated median household income of $91,400 (to affordably purchase means that a household is not spending more than 30% of their income on housing costs).[1],[2] The Cape’s housing market challenges pose challenges for the region’s economy because businesses and municipalities struggle to recruit and retain employees who cannot afford or access year-round housing on the Cape. As a result of rising costs and limited supply of year-round housing, many renters face housing instability. The Mashpee Wampanoag Tribal Council unanimously declared a state of emergency due to the homelessness crisis impacting tribal members.[3]
Cape Cod Housing Demand
Demographically, Cape Cod is a much older region than the rest of Massachusetts: 32% of the population is age 65 or older, up from 25% in 2010. Not only is the Older Adult population growing, but youth and younger adult populations are declining. From 2010 – 2020, the under-20 population on the Cape declined by 4,600 and the 20-50 population dropped by 3,700. After years of declining population estimates, the 2020 Census showed an increase of population to 229,000, up about 7,000 from the decade prior. However, all of the net increase was in the over-65 population (up 19,900). Post-2020 census estimates indicate that the population has started to decline again and is projected to drop by six to ten percent over the next decade.
As a result of the aging population and decline of younger adults, the number of households in the region is projected to decline in the coming years. The Competing and Growing scenario anticipates no growth of under-60 households, and large increases in householders over the age of 75 (increase of 4,700 households, or 19%.)
The majority of Oldest Adult household growth will be in one- or two-person households with incomes below $75,000 per year.
While there is no net growth in housing demand projected for the Cape, the region has significant housing needs. New homes are needed to make up for anticipated loss of year-round units to seasonal use; and additional low-income households are needed, either through new production or conversion of existing units.
Cape Cod Housing Strategies
The region is working to develop and implement strategies for growth that are “responsive to context, allowing for the restoration, preservation, and protection of the Cape’s unique resources while promoting economic and community resilience.” To combat the region’s housing challenges, some municipalities in the region are leveraging municipal tax revenue (often generated from the tourist economy) to support housing and infrastructure. Housing Cape Cod: The Regional Strategy (2024) notes several local examples that leverage municipal revenue generated from the tourist economy to support affordable housing. Provincetown dedicates 100% of its short-term rental community impact fee revenue and a portion of its rooms tax revenue to housing initiatives. Barnstable and Orleans dedicate 100% of their local option rooms occupancy tax revenue toward wastewater infrastructure. Falmouth dedicates 100% of its Short-term Rental Community Impact Fee revenues to its affordable housing fund. A Regional Redevelopment Authority, permanent Regional Housing Services Office, and Regional Local Government Investment Tool offer collaborative, regional approaches to address shared housing challenges for municipalities in the region.
Development on Cape Cod is limited by environmental factors: much of the land is protected open space, and development must consider the need to protect and preserve the areas many fresh water ponds and nitrogen sensitive embayments.