Selectmen Take A Fresh Look At Housing Crisis; Dykens Proposes Mansion Tax

By: Alan Pollock

Topics: Housing and homelessness

Affordable housing.

CHATHAM — There’s no silver bullet to solve the housing shortage in town, but selectmen this week advanced several initiatives that might prove important, including a potential half-percent real estate transfer tax for properties over $2 million.

The concept was floated by Selectman Jeffrey Dykens, who said it would provide a sustainable revenue stream for affordable and attainable housing projects. Had the mansion tax been in place this year, it would have generated $564,000 for the affordable housing trust fund, Dykens said.

“I’m not a tax-and-spend guy,” he said. But without housing for working families, Chatham will lose its young population and its schools and risks losing its identity. Dykens said his wife, Julie, pointed out that Chatham does an excellent job preserving historic properties in town, but even the descendants of historic families can’t afford to live here anymore.

“We’re really not preserving our social lineage,” he said.

Different from a property tax, the transfer tax would apply only when a property is sold, and represents “a reasonable request” from people who can afford it, he said.

Selectman Peter Cocolis, who has bought and sold homes many times, has always opposed transfer taxes on the grounds that they are regressive taxes that punish people who move frequently. But with the value of home sales in town rising steadily, Cocolis said he thinks the idea merits consideration. “I think it’s more important to get money into attainable and affordable housing,” he said.

Many details would need to be worked out, board member Cory Metters said, including a potential sunset clause for the tax. “I do think, for a long-term mechanism for funding, it is worth having the discussion,” he said.

Board member Dean Nicastro praised Dykens for his “boldness in offering this idea,” but said such a tax might punish people on fixed incomes whose houses have increased greatly in value. “I don’t like new taxes. I don’t like earmarks generally,” he said. But Nicastro said he would not oppose discussing the idea if the majority of the board wishes to do so.

Selectmen Chairman Shareen Davis said she supports the idea, given the “obscene” values of some of the town’s real estate sales lately. “We have an extraordinarily challenging situation here” where housing has become almost entirely out of reach for working families, she said. The board agreed to continue discussing the transfer tax idea, which would require approval by town meeting and special legislation.

That special legislation might be combined with a special act the town may seek to amend the Community Preservation Act (CPA) so that its funds could support not only low-income housing but attainable housing for working families. Board members signaled a willingness to seek that special legislation, acknowledging that it would likely face opposition from some.

“The CPA is 20 years old,” Nicastro said, and the affordability of housing has changed during that time. “I really do think it’s time to update the availability of CPA funding,” he said.

Town Counsel Patrick Costello said a simple change to the definitions in the act would allow Chatham to specify that CPA housing projects could be used to benefit people who earn more than 80 percent of the area median income as currently specified for affordable housing. In Chatham, the median home sale price is $725,000, and a family of four seeking to buy such a house would need to make around $160,845 each year to afford it. That represents nearly 200 percent of the area median income.

Selectmen agreed that Costello should draft the special legislation using a 200 percent figure instead of the current 80 percent.

That change toward supporting attainable housing in addition to officially-designated affordable housing was reflected in another of the board’s actions Tuesday. To complement the town’s existing affordable housing trust, the board heard a proposal to create a parallel “attainable housing trust” to fund workforce housing projects. Selectmen ultimately favored creating two separate pools of money – since funding sources for each type of project would likely be different – but said it was best to have the same group of trustees oversee them.

The current affordable housing trust consists of the five selectmen plus two public at-large members, and that group has been in place since the trust was created in 2006. During that time, the town has only advanced a few housing projects: two Habitat for Humanity developments and the purchase of a house on Crowell Road for the town’s rental escrow program.

“We haven’t really had a great success rate,” Davis said. The board heard a presentation from Shelly Goehring of the Mass. Housing Partnership, who encouraged them to consider a membership with fewer selectmen and more representatives from the community. Brewster’s housing trust, for instance, has seven members that include a selectman, the town administrator, and representatives from several key committees, plus two at-large members. Chatham selectmen favored a seven-member trust with two selectmen, a member of the community housing partnership, and four at-large trustees. The membership change will likely be included on the next annual town meeting warrant.

Each year, the affordable housing trust gets an appropriation from the Community Preservation Act, and staff this year requested $500,000. Board members recommended increasing that amount to $800,000 in the next budget.