Housing Bank Backers Renew Efforts to Pass Legislative Bill

By IAN FEIN

An ad-hoc group of Vineyard housing advocates have decided to continue their pursuit of controversial legislation that would tax Island real estate transactions to fund affordable housing projects.

The group decision came two weeks ago, some four months after the Massachusetts House of Representatives defeated an earlier version of the bill by a vote of 91-64. Approved in concept by Vineyard voters in spring 2005, the housing bank bill this summer sparked debate in both chambers of the state legislature, where opponents called the initiative an unfair impediment on home ownership.

Vineyard Haven resident Abbe Burt, who worked as a full-time administrative assistant for the ad-hoc housing bank coalition two years ago, said the group was committed to seeing their vision through.

"We strongly believe that the Vineyard housing situation only worsens annually," Ms. Burt said this week. "And so we feel it is vitally important to secure stable, long-term funding for community housing."

Coalition members waited until after the state election last month before deciding how to proceed. They have since met with state Sen. Robert O'Leary and spoken with Rep. T. Eric Turkington, both of whom agreed to refile the special legislation in mid-January along with a parallel initiative on Nantucket.

Modeled after the Island land banks, the housing bill would generate funds for affordable housing projects by taxing Island real estate sellers one per cent of their transaction price. The first $750,000 of the purchase price would be exempt on the Vineyard, and the first $2 million would be exempt on Nantucket.

Senator O'Leary and Representative Turkington maintained from the start that the transfer tax faced an uphill battle on Beacon Hill, where earlier this year it saw heavy lobbying opposition from the Massachusetts Association of Realtors. But both lawmakers said this week that Democratic gains, a new governor, and familiarity with the bill from the last legislative session could help its chances. Senator O'Leary noted that 15 house votes would swing the bill toward approval.

"We came close, very close," said Senator O'Leary, who shepherded a 23-14 passage of the housing bank bill in the state senate before it reached the house last summer. "It is something I believe can happen," he added.

"We've been through this once, so we know what all the questions are," Representative Turkington said this week. "Now we need to come up with the answers."

The ad-hoc housing group at this point is leaning away from the political advice of Senator O'Leary, who recommended that they bring the housing bank question back before town meeting voters this spring. The senator said the 2005 nonbinding ballot initiative was recent enough to proceed with at the state house, but said frankly that another round of Island approvals would help its chances. He said a strong showing of community support would be a powerful response to critics in the state legislature.

"What's important here - what needs to be understood - is that it must be an effort by the community," Senator O'Leary said. "To the extent we can emphasize that, we strengthen our argument."

Representative Turkington warned that housing bank advocates should not focus all of their efforts on Beacon Hill because, if passed by the legislature, the proposal would still require another vote of approval from each Vineyard town. Islandwide the housing bank concept received 58 per cent approval in its spring 2005 ballot initiative, but the level of support varied from town to town, and passed in Edgartown by only 26 votes.

The housing bank bill also has the official endorsement of only one Vineyard public organization - the Martha's Vineyard Commission, which itself recommended last fall that the ad-hoc group seek votes of support from Island town boards. Housing bank advocates on Nantucket have endorsements from a number of government, business and community groups, including selectmen, the Nantucket Planning & Economic Development Commission, the Nantucket Association of Real Estate Brokers and the Nantucket Builders' Association.

Nantucket voters at a special town meeting in October also approved the housing bank concept as a home rule petition.

Ms. Burt this week said the Vineyard housing bank coalition is confident of its support on the Island.

"After the 2005 vote, we feel we have a mandate to carry this as far as we can," Ms. Burt said. "The vote wasn't overwhelming, but we do think we have strong public support that will only grow and increase."

Ms. Burt said the Island Affordable Housing Fund, a nonprofit housing organization in Vineyard Haven, has again pledged to provide lobbying money for the housing bank initiative, though it does not intend to spend as much as it did in the last legislative session. Prior to the house vote this summer, the housing group spent roughly $120,000 on lobbying and consulting fees for the bill. The year before, the group spent more than $85,000 in a six-month campaign leading up to the spring 2005 town meeting and ballot votes. That year, aside from the nonbinding housing bank question, four Vineyard towns also adopted the Community Preservation Act - which raises funds for affordable housing, open space and historic preservation through a property tax surcharge and matching state funds.

Advocates admitted that the money spent on both campaigns could have gone toward actual housing projects, but argued the expenditures were justified because they would create millions of dollars a year in stable funding for affordable housing.

Their projections for such funding, however, now appear to be in question.

When advocates said the Community Preservation Act would bring in about $2.5 million each year for affordable housing, they assumed that 75 per cent of collected funds would go toward affordable housing, and that the state would fully match the local contributions for five to ten years.

The Island Affordable Housing Fund this week sent a letter to town community preservation committees expressing surprise and concern that town officials are looking to spend a majority of preservation funds on non-housing projects. Meanwhile, the Massachusetts Department of Revenue recently announced that next fiscal year may be the last time the state matches 100 per cent of the local community preservation contributions.

State community preservation funds are drying up because more Massachusetts towns have enrolled in the program (voters in nine more communities approved the Community Preservation Act in the state election last month, bringing the total of enrolled municipalities to 118 - or about one-third of the commonwealth), and also because of an overall decline in the statewide real estate market. The commonwealth collects its community preservation funds from transaction fees at registry of deeds, where the total number of transactions in recent months has dropped steadily.

The stagnant real estate market on the Vineyard will also affect projections on the housing bank legislation, which advocates said would bring in more than $2 million per year of Island housing. That estimate was based on 2005 Martha's Vineyard Land Bank revenues, which have also dropped precipitously. Through the first five months of the current fiscal year, land bank revenues are down roughly 30 per cent.

Ms. Burt this week said a cooling real estate market was not a cause for concern.

"These things go in cycles," she said. "I'm sure those numbers will pick up again next year."