At its Tuesday meeting, the Oak Bluffs Affordable Housing Committee expressed interest in taking another look at how the city’s tax revenues can be used for short-term rentals.
“When it comes to the housing bank,” committee chairman Mark Leonard said, “state legislators ask, ‘Why don’t you use the short-term rental tax to support affordable housing?'”
Leonard said after he proposed to Oak Bluffs’ finance committee that some of the city’s short-term rental tax be used to accommodate year-round residents — as other Massachusetts cities have done — the reaction was one of hesitation.
Though the finance committee “somewhat supports” the use of rental taxes for affordable housing, the board selected, Leonard said, was “non-binding.”
Leonard said the committee hopes, in support of using just a percentage of the millions of dollars raised by the city to provide affordable housing for islanders, that the committee hopes to reengage the city and its constituents in discussions about distributing the additional cash flow .
Since the short-term rental tax bill signed into law by Governor Charlie Baker and taking effect in July 2019, city managers and select bodies have been reluctant to use the funds generated by the short-term rental tax.
Since the first annual tax collection report in 2021, the six communities of Martha’s Vineyard have collectively amassed more than $10 million in short-term rental fees, which then goes into each community’s general fund.
Oak Bluffs, which has the second highest collection on the island next to Edgartown, has raised nearly $3 million over the past two years with no current plans to allocate the money to any specific initiative.
Committee member Pete Bradford recalled that a few years ago, when the first housing bank was proposed, the concept of using a percentage of the rental tax for housing funds was considered, but was quickly discarded.
“It wasn’t supported by the chosen ones,” Bradford said when the board expressed interest in waiting it out how much revenue would be collected and how constant the inflow would be.
“The reality is we’re losing our rental portfolio to short-term rentals,” Bradford said. “The only way” to more realistically secure long-term rents is through funding — which the room tax is capable of — since it’s unlikely to “effectively stop short-term rents,” he said.
Later, speaking to The Times, Leonard said the committee supported the idea of using the tax for either the future housing bank or the city’s housing fund, which was somewhat exhausted after a string of other housing projects.
The Housing Trust, he said, has no income and relies on donations; As much as 10.15 percent of the total short-term rental tax collected, Leonard said, gives the committee something to work with to provide housing for at least one more family on the island.