Nantucket faces unique and profound housing challenges and has many efforts underway to create and preserve homes for year-round residents. Driven by the demand for seasonal homes, the median home price is the highest of any region or county. Loss of year-round units and the lack of diverse new housing supply leaves the island’s long-term residents and workforce with almost no affordable options. Understanding the region’s current and future housing needs is also challenging due to uncertain data about existing residents and the influx of temporary residents who were counted in the 2020 Census. EOHLC projects that the island will need to grow its year-round housing stock by as much as 9% in order to accommodate potential population growth and the existing shortage of homes.
Nantucket Housing Overview
The Nantucket Planning and Economic Development Commission represents the town of Nantucket, the only regional planning agency to represent one municipality. Nantucket is also a designated National Historic Landmark, along with Tuckernuck and Muskeget islands, and preserved by Nantucket Historic District.[1] In addition to the beauty of the natural environment, the town has around 5,000 architecturally significant buildings from across time periods on the National Register of Historic Places lists and is the “largest conventional historic National Historic Landmark District in the contiguous United States.”[2] Historic preservation is a community asset, but can also present unique challenges to housing production.
Other housing challenges faced by the region include limited space for development and topographical development constraints. For instance, as an island community, transit access is limited to ferry or plane, and job opportunities are highly seasonal . During the peak season, employment more than doubles, adding over 4,000 jobs, mostly in the leisure and hospitality industries. Additionally, as a tourist and seasonal destination, Nantucket is seeing challenges related to an increased demand in short-term rental or second-home properties, shrinking supply of available year-round units, and high seasonal vacancy rates. As of the 2023 American Community Survey, sixty percent of Nantucket’s housing stock was vacant for seasonal, recreational, or occasional use. According to data from the MA Department of Revenue, 22% of homes are actively used for short term rentals, making them unavailable to year-round residents. Additionally, there is a lack of diverse housing types and tenure options. As a result, Nantucket’s year-round renters and homeowners are competing with seasonal visitors and are cost burdened, with housing costs outpacing median incomes.
Nantucket Housing Demand
As of the 2020 Census, Nantucket’s population was 14,250, a 40% increase over the 2010 Census counts. It is likely, but can’t be quantified, that much of this growth was due to residents who had temporarily relocated to second or seasonal homes during the COVID lockdown. The projections prepared for this housing plan anticipate that population growth rate will slow considerably in the coming decade, growing by 3.7% in the middle series projections, or as much as 5.3% in the high series projections.
The number of households on the island could grow much more quickly than population, with increases at nearly all age groups. Housing Plan projections anticipate an additional 915 households may form over ten years, an increase of 17% over the number of households in 2020. Nearly half of this growth is due to latent demand—people already living on the island but in overcrowded, doubled up, or otherwise unsuitably housed. The largest increases are among the oldest age groups: the number of Oldest Adult (75 and over) households is projected to grow by 42%.
Most of the household growth is projected for moderate- and low-income households without children. This includes nearly 500 households without children, headed by someone under the age of 65. As noted above, many of these residents are already on the island but in overcrowded, doubled up, or otherwise unsuitable conditions. Due to the shortage and high cost of homes on Nantucket, it’s likely very few of these new households will be able to find and afford unsubsidized year-round units. This is in addition to the existing shortage of affordable homes for current households.
Nantucket Housing Strategies
Nantucket has made strides in addressing housing challenges including expanding municipal capacity and funding for affordable housing production. For example, the town created a new leadership position within their Housing Office to work with the Town Manager and Nantucket Affordable Housing Trust on implementing the town’s housing strategies. The town has also filed a home rule petition for a local transfer fee that “would provide a steady stream of income for housing projects by a proposed .5% fee added to sale of a home on the amount over $2 million.” However, the Local Option Transfer Fee has not passed at the state level.
In the meantime, Nantucket leverages Neighborhood First and Community Preservation Act funding to produce affordable housing. Within three years, the town has increased the percentage of deed-restricted affordable subsidized housing inventory units (SHI) from less than two percentage to about a little more than the state goal (5.37%).[1],[2]Nantucket, which has Safe Harbor Status and limits the development of 40B projects, currently utilizes land acquisition, comprehensive permitting, and local zoning strategies to further affordable housing production.[3] Other proposed strategies include pursuing “friendly” 40B developments, adopting an inclusionary zoning ordinance, establishing a community land trust, and exploring modular housing options.[4]
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