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Cape Cod affordable housing crisis deepens: Cape Cod Commission’s Regional Housing Market Analysis and 10-Year Forecast

On September 11, 2017, the Cape Cod Commission released its Regional Housing Market Analysis and 10-Year Forecast of Housing Supply and Demand for Barnstable County, Massachusetts. Crane Associates, Inc. of Burlington, Vermont, and Economic & Policy Resources (EPR) of Williston, Vermont, prepared the report, working closely with the staff of the Cape Cod Commission as well as a review panel of local and regional advisors representing the banking and homebuilding industries, young professionals, gerontologists and other interests.

The report explains that macroeconomic forces, such as the rise of a strong Boston metropolitan economy and the housing market crash in 2009, combined with natural resource constraints and local density control policies have resulted in low prevailing wages and high demand for seasonal and retirement homes in Barnstable County, creating a constrained housing market.

In recognition of the critical role that housing plays in a region’s economy, the Cape Cod Commission initiated the report to fully understand how the current and forecasted housing market for Barnstable County impacts the lives of residents. The report is intended to be used as a foundation for long-term planning for diverse housing and local economic development.

The report provides detailed data collection, comprehensive data analysis and suggested strategies moving forward. It includes a ten-year economic and development forecast for Barnstable County that incorporates a variety of data sources to reflect the macroeconomic forces, the specific housing market and the migration patterns of the relevant population. The report analyzes housing supply and demand across all 15 municipalities of Barnstable County and the four main sub-regions of the Cape (Upper, Mid, Lower and Outer) to identify housing gaps for renters and housing gaps for owners. The housing gaps are calculated at four different household incomes50%, 80%, 100% and 120% of the median household income for Barnstable County.

As the report emphasizes, the complex challenges in the Cape Cod housing market stem from the convergence of four major societal elements: demographics, economics, physical infrastructure and natural resources. The consultants advocate an approach that relies on inter-municipal cooperation to address all four elements concurrently. Because Barnstable County is currently short approximately 22,000 housing units obtainable to all income categories below $90,000, the report acknowledges the necessity of an immediate increase in the supply and type of units available, but cautions that addressing only the supply side of the supply and demand equation will not provide a lasting remedy.

Moving forward, the report recommends a comprehensive, integrated approach that balances conservation efforts with the importance of expanding physical infrastructure, housing options and year-round employment opportunities in order to diversify the economy. Currently, 49% of all employment on the Cape falls into sectors that primarily serve tourists and second home owners, but as the report notes, year-round housing requires year-round employment, and year-round employers require physical infrastructure.

The report concludes with specific recommendations to address both the supply side and the demand side of the housing market. By addressing the economic base of Barnstable County, the following eight strategies are designed to increase the supply and demand for a wider range of housing types:

 

1.      Adopt housing targets suggested in the report. Distribute the targets in an economically efficient manner to increase the housing supply (as opposed to allocating targets proportionally between the 15 municipalities).

2.      Conduct a detailed housing market preference study to identify critical information on how to distribute the demand for housing by different market segments. Specifically, identify housing preferences of healthy seniors to motivate them to downsize and housing preferences of young professionals to entice them to relocate to the Cape.

3.      Supply the demand for compact urban forms. The concentration of housing and businesses allows economically feasible creation of infrastructure and attracts both healthy seniors and young professionals.

4.      Increase the diversity of seniors housing because according to the forecast, in the next ten years, 66.7% of the population on the Cape will be over 45 years old. Expanding housing options for seniors will attract healthy seniors out of their current, oversized homes, alleviating housing cost stress across households of all ages and incomes.

5.      Increase the diversity of multi-family housing. Specifically, the report recommends distributing 4,800 new multi-family units across the county, divided into seven market segments: three for seniors at three price ranges between 50% and 120% of the median household income, two for families between 50% and 100% of the median household income and two for households without children between 50% and 100% of the median household income.

6.      Create targeted strategies to diversify the economy by recruiting companies in growing sectors of the Massachusetts economy that are not currently represented on the Cape.

7.      Create a county-level housing advisory team to integrate all existing housing policies and organizations across the 15 municipalities of the county, including local, regional, state and federal governments, as well as nonprofit organizations and private developers.

8.      Expand on this report for the purposes of implementing development policies.

 

 

 

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