Legislature Approves Special Funds For Chatham To Support Housing, Elementary School

CHATHAM – Legislation allowing the town to establish special revenue funds to support the elementary school and attainable housing was recently signed by Gov. Maura Healey.

With final approval of the special legislation, which voters endorsed at the May 2022 annual town meeting, 2 percent of the annual revenue from the room occupancy tax will be split between funds to cover the annual operating costs of the school and to pay for attainable housing for the town’s workforce.

Special legislation the town submitted to create a surcharge on real estate sales to help fund affordable housing is stuck on Beacon Hill, however, and a local option that would have allowed any town to adopt a surcharge was left out of versions of the governor’s housing bill approved by the House and Senate.

The new attainable housing special revenue fund and the Chatham Elementary School special revenue fund will each receive 1 percent of the rooms tax collected on hotels, motels and short-term rentals. The initial amount each fund will receive is $1,011,851, with the anticipation of about $800,000 annually in future years, according to Finance Director Carrie Mazerolle. The room occupancy tax is currently 6 percent; it was raised from 4 percent to accommodate the two new funds.

Two years ago, the town agreed to pay the full operating cost of its elementary school as part of an agreement to ease the financial strain from the Monomoy Regional School District budget on the town of Harwich, which will also cover its own elementary school costs. Chatham Elementary School’s annual operating costs are about $800,000. The new revenue stream will make keeping the elementary school open more sustainable, according to town officials.

The town has also prioritized affordable and attainable housing, but until now has lacked a revenue stream specifically for attainable or workforce housing. Attainable housing differs from affordable housing in terms of the income limits on applicants; affordable housing is generally capped at 80 percent of the area median income (AMI), while attainable housing can be up to 200 percent of AMI.

Appropriating money from the new funds will require a majority vote of town meeting.

Passage of the legislation is a “major milestone,” said select board chair Michael Schell.

“I could not be more emphatically enthused about this,” he said. “This is a big achievement for the entire community.”

“By setting aside a designated funding source, we are not only working to address funding the critical need for housing but investing to ensure that our youngest residents have the educational resources they need to succeed,” Town Manager Jill Goldsmith said in a statement. “This step reflects our commitment to fostering a sustainable, vibrant community for all. We are grateful for the community’s support and look forward to the positive impact these funds will have on Chatham's future.”

The state Senate on July 26 passed its version of the Gov. Healey’s housing bill, but both that version and one approved earlier by the House did not include a provision to allow towns to levy a surcharge on real estate sales above a certain amount. Chatham’s home rule legislation seeks a one-half of 1 percent surcharge on the amount of a real estate sale that is over $2 million, with the revenue devoted to affordable housing.

The House and Senate bills must be reconciled before going to the governor’s desk. Opponents argued that the surcharge would raise the cost of housing, but Schell said the additional amount would be small in the context of such large real estate transactions. And, he added, it would be a significant revenue stream that the town could devote to continuing to address the housing crisis.

Chatham’s home rule legislation remains pending, but Schell was not optimistic that it would be approved.

“I don’t hold out a lot of hope that we’re going to get it,” he said.