UMass Amherst’s Donahue Institute studied proposed real estate transfer fees on Martha’s Vineyard and Nantucket to fund year-round affordable housing.

“Our economic impact analysis suggests that using proposed transfer fee revenues to support a balanced portfolio of programs has the potential to strengthen both the housing market and the local economy.” -UMass Amherst Donahue Institute

Key Findings:

  • Overall conclusion:

    • Transfer fees could provide stable funding for affordable housing without significantly harming the real estate market.

    • The revenue could meaningfully improve year-round housing availability and strengthen local economies.

  • The study evaluated several ways the revenue could support housing:

    • Buying and repurposing properties for year-round residents

    • Deed restrictions to keep homes affordable

    • New housing construction

    • “Lease to Locals” programs that convert short-term rentals into year-round rentals

    • Housing assistance for public employees

  • Key economic findings:

    • New construction creates strong local economic activity immediately.

    • Retaining year-round households boosts local spending and workforce stability.

    • Deed restrictions are relatively cost-effective.

    • Lease-to-Locals programs could create high returns at lower cost.

  • Both islands face extreme housing affordability problems:

    • Median home prices in 2024 on Martha’s Vineyard: $1.4M, Nantucket: $3.7M

    • About 60% of homes are used seasonally as second homes or short-term rentals.

    • Local workers increasingly cannot afford to live year-round on the islands.

  • Employer survey findings showed major workforce impacts:

    • 53% lost employees because of housing costs.

    • 60% raised wages beyond inflation to retain staff.

    • 55% had job candidates turn down offers due to lack of housing.

  • Researchers found little evidence that transfer fees would hurt luxury housing markets:

    • A case study in the Hamptons showed no clear drop in home sales or prices after a similar fee was adopted.

    • High-demand resort markets tend to be less sensitive to these kinds of fees.

  • Estimated annual revenue from the proposed fees:

    • Martha’s Vineyard: about $10M–$11.8M per year

    • Nantucket: about $3.3M–$3.9M per year

    • Combined: roughly $13M annually for housing programs.

Read the Full Study