Earlier this year, a waterfront home on Nantucket made headlines after its list price plummeted 74% in about six months. The three-bedroom, two-bathroom home fell from $2.3 million to $600,000 after a northeast storm washed away 70 feet of nearby shoreline, putting the property in jeopardy.
But the ranch-style house on the south shore of the island off the coast of Massachusetts is no exception. And with thousands of buildings at risk, the question is already being raised as to who is funding Nantucket’s climate projects and how much.
Once the center of New England’s whaling industry, Nantucket has now become a summer haven for the wealthy, with only a small group of locals staying for the winter. Almost 70 percent of the houses on the island belong to people who spend part of the year there, according to the Nantucket Current.
And those homes are expensive. According to Zillow, the average price for a single-family home on the island is nearly $2.9 million, compared to about $650,000 in the rest of Massachusetts. Most of the 26 waterfront properties listed on Zillow cost between $10 million and $20 million, with one property going for as much as $35 million. But real estate prices are now increasingly under scrutiny.
Shelly Lockwood, a real estate agent on Nantucket, said Assets Last fall, she became frustrated when she saw listings for waterfront properties on the island that she thought were “really wrong,” so she worked with Nantucket’s Coastal Resilience Advisory Committee to help create a course for real estate agents to help them reprice at-risk homes.
“It’s just not a good look,” she said. “If I bought a house for $10 million and it went under and nobody told me, I’d be pretty upset.”
Attorney Cris Farley said Assets that he has helped homeowners reduce their property taxes to account for the loss in value of their homes caused by erosion. This requires a tax abatement from the city’s tax office, which Farley said should take into account the long-term erosion of the beach on which a property sits.
However, if a significant number of homes lose value, property tax revenues for the entire city could decline – at a time when taxpayer money is urgently needed to address the problems facing waterfront homeowners.
who pays
These costs to taxpayers are already priced in. In 2021, Nantucket adopted a Coastal Resilience Plan (CRP) that includes nearly $1 billion in projects to help the island weather some of the impacts of erosion and sea level rise. Part of that plan included segmenting the island into “coastal resilience districts” — essentially dividing Nantucket into different zones based on risk levels and individual needs.
Leah Hill, the city’s coastal resilience coordinator, told the Boston Globe If Nantucket fails to reduce coastal risks by 2070, nearly 2,400 structures will be at risk from flooding and erosion, resulting in $3.4 billion in annual damage.
One of the ideas that has emerged among city officials is to impose development fees on the property owners who benefit most from resilience projects. This would reduce costs for the city as well as less affected taxpayers.
Vincent Murphy, head of the city’s sustainability programs, said Assets in an email that many of the projects described in the CRP are small and provide very limited benefits, which is the main reason for the idea of improvement fees.
“When the city and neighbors benefit from a project and agree to do the work together, the costs are shared,” Murphy said. “The city pays a portion and the neighbors who benefit also pay a portion.”
Exactly who will contribute to funding the projects and how much will be determined on a case-by-case basis, depending on how many beneficiaries a project has and the extent to which they benefit, Murphy said. Payments would be made over a set period of up to 20 years.
But not everyone on Nantucket agrees with the concept. When a resolution on an article about development fees came up for a vote at last month’s town meeting, voters rejected the plan, questioning whether it was fair to burden some property owners with more costs than others. While the coastal resilience district roadmap moved forward, a vote on development fees was postponed.
“The way it is set up, the entire island falls under it and is divided into districts, and those districts are asked to pay for projects as part of the improvement,” Bobby DeCosta, a former member of the special committee, said at the town meeting, according to the Nantucket Current“This will hit taxpayers particularly hard in these areas who own property on ponds and beaches and already pay the majority of our taxes.”
