The Second Chance Program.

The Second Chance program is so named because it gives year-rounders a second chance at staying on the island. It gives them affordable options. It is also a chance to create several affordable housing units per year and add to the year-round affordable housing stock. Plus, it gives us all a fighting chance to curb growth in a very meaningful way.

It’s also called second chance because this idea is not new. It was first proposed in 2004 by Finn Murphy and Matt Fee and the article that would have made it possible was buried by a Planning Board that did not understand or appreciate the intricate balance this program represents. I think the climate has changed and the time is right to bring this program back up for consideration at town meeting.

Some background

We currently have approximately 10,500 dwellings on Nantucket – 9,000 primary dwellings and 1,500 secondary dwellings. The potential total build-out of the island is another 7,500 total dwellings, 6,000 of which are secondary dwellings. The number of secondary dwellings is sharply on the rise and these structures have a profound impact on sewer usage, as well as the load on our existing island infrastructure. For these reasons, efforts to manage second dwelling creation and use must be at the forefront of any meaningful movement to manage growth and maintain island character.

Make no mistake, this makes second dwellings a big target. A hot-button issue that many people in government are afraid to touch. Why? Because many year-rounders are counting on someday building a second dwelling for their kids to live in, or to rent out in order to make ends meet. And year-rounders are, for the most part, voters.

What's wrong with the bylaw we have?

It's true, we do currently have a second dwelling bylaw, but it does not go far enough and the intent of the bylaw is not enforced. Second Chance codifies the intent of the wording in the second dwelling zoning by-law written well over a decade ago:

“The principal purpose of secondary dwellings is to create housing opportunities through the provision of affordable rental housing for year-round residents, including senior citizens, while affording the owner of the primary dwelling the with the opportunity to earn supplemental income.”

Second Chance would create new housing regulations that require second dwellings built after a phase-in period to be affordable housing under the Nantucket Housing Needs Covenant rules. It also provides for new Housing Needs Covenant rental options under chapter 100 of the bylaw, as well as specific income, fee and tax benefits for homeowners and their family members.

At the same time, it eliminates new seasonal second dwellings.

In other words, this idea keeps all of the positive things about second dwellings and eliminates all the negatives. But it’s not without compromises.

Before we talk about what this proposal does, let’s talk about what it does not do.

• This measure does not take away year-round residents’ right to build a second dwelling.
• It does not reduce any income potential derived from year-round rentals.
• It does not lessen anyone’s ability to create housing for year-round family members.
• It does not effect any second dwelling built prior to 2010.

Okay, what does the plan do, then?

It creates affordable housing. Under Second Chance, all new second dwellings built after the phase-in period would be subject to a Housing Needs Covenant. This covenant currently allows for secondary dwellings to be legally separated from the primary dwelling and sold to qualified home buyers. To qualify a buyer must make less than 150% of the Nantucket median income of $80,550 annually, or less than $120,825. The current selling price (which is tied to the median income number) is no more than $445,164. This program allows sellers to realize up to $445,164 of income that was previously not available to them, and it allows buyers to purchase a home in a price range that is otherwise nonexistant.

It provides market-rate rental income. Second Chance makes it possible for home owners to retain ownership and rent to qualified renters. This “rental covenant” uses the same income standard of 150% of the Area Median income of $80,550 to qualify. Home owners may charge up to $3,000 which is well above market rent averages. The landlord is free to charge any rent they like below that number. This rental covenant will be administered through the Nantucket Housing Authority or its designee.

Exceptions for year-round family members. Under Second Chance, a homeowner who builds a second dwelling will be able to rent to any year-round family member, regardless of their income, for any rent amount they choose. Even one dollar.

It offers tax advantages. Since a covenant home can only be sold for no more than $445,164, it cannot be assessed for any amount greater than that.

Sewer connection fee waived. Under Second Chance, builders of second dwellings within sewer service areas would not be required to pay a sewer connection fee to be on the service. This fee is currently $2,000 but is expected to rise significantly in the coming months. Other breaks for affordable housing can be considered as well. The idea is to encourage this action, for the good of the whole island.

Feedback wanted

Those are the bare bones of the Second Chance plan. The wording of the bylaw change still need to be worked out, but after talking to several people who work in the areas of affordable housing I have been assured that this is legal and doable under Chapter 100, and that it will not require a home rule petition or an okay on the state level.

What do you think? Send me your questions or comments by clicking on the comment button below or posting on YACKon.com

There are plusses and minuses to every compromise plan. In tomorrow’s blog post I will answer some of the questions that are raised and have been raised in the past about Second Chance.

Until then… Nantucket first!