Realtors in the Boothbay Region, Debrah Yale, and Cindy Winston have selected the Martha's Vineyard Island Housing Trust as their model for the Boothbay Region Housing Trust. Following the Island Housing Trust's lead, Winston and Churchill have identified "the professional working classes" as the targeted group to be served by the Boothbay Region Housing Trust.
So how does Martha's Vineyard model work?
First, the model identifies that there is a new class of residents who are in need of affordable housing in the twenty-first century. In the twentieth century, affordable housing was for low-income people. In the twenty-first century, the income-too-low-to-afford-housing demographic includes highly trained professionals as described in the success story article about the Island Housing Trust below:
There are also less glamorous, but even more critical, services that make up a successful community. These services are delivered by people who have undergone rigorous training to provide healthcare, education, and safety. Unfortunately, affordable housing on the Island is not always available to these people. MV Times IHT’s MV Future Financing By Marie Kelfer -October 9, 2019
“It doesn’t affect just our employees. It really affects our entire Island community because our employees take care of this entire Island,” Ms. Schepici said. Housing Trust Debuts Hanover House Project Yineyard Gazzette Holly Pretsky Friday, May 3, 2019
The narrative milks how important it is to provide affordable housing to workers who provide such vital services to the whole community. In the era of covid, these workers put their own lives on the line providing essential services, and yet in the Martha's Vinyard model cited as the inspiration for the Boothbay Region Housing Trust, workers providing essential services do not have a standard level of personal privacy in their own living environments that most of us take for granted.
A reliable source identifies that affordable workforce housing means employees with an income that can be more for a single person than the median household income for Boothbay Harbor in 2019., but the Hanover housing solution used in Martha's Vineyard is hardly suitable for families. By the standard given, those who cannot afford a place to live on Martha's Vineyard are making at the top of the "unaffordable" scale almost 60% over the $15.00-hour currently being called for as a national minimum living wage. If those making 60% above a minimum living wage cannot afford a roof over their heads in Yale and Simpsons model community, then why is such a community being considered as a model for the Boothbay Region?
MV FUTURE FINANCING In partnership with the Martha’s Vineyard Bank, IHT launched a Social Impact Investment fund called MV Future Financing in order to provide permanent financing for rental housing for income-qualified hospital employees at The Hanover House. IHT repurposed the historic Hanover House Inn as year-round affordable rental apartments in Vineyard Haven. Description on the Island Housing Trust Website (emphasis by author)
Note the terminology on the IHT website is "rental apartments", a term that once assumed a private kitchen at minimum. Funding used to pay expenses of the property owner is rent income paid by the workforce, using the acquired property as the collateral. Collecting 15 rents for what looks like a single-family home helps the owner, IHT, to pay the mortgage or other expenses of ownership. The way to do that is to rent rooms with access to shared communal spaces, similar to the model of the family home. except the employer takes over the traditional role of family.
The owner of the property, IHT, has upward mobility because the arrangement provides a means to acquire property ownership, with short-term loans paid back by rental income, by those who work for a living. or by other avenues of public-private, for-profit, non-profit financing.
Revenues of $585,681 from 48 rental units were used to pay $449,322 in expenses before depreciation and added $40,561 towards capital and operating reserves. .....
The Dukes County Regional Housing Authority (DCRHA), a state-chartered housing authority, manages the IHT’s 33 rental units under contract on 6 scattered site properties serving very low, low and moderateincome households. The DCRHA performs accounting functions for the property portfolio and provides waitlist management, income qualification, and rent-up services in compliance with rental restrictions. In addition, IHT owns and manages the 15 rental units at the Hanover House that it master leases to the Martha’s Vineyard Hospital for their low and moderate income employees. Island Housing Trust Corporation and Subsidiaries Consolidated Financial Statements and Supplemental Information December 31, 2020
If one were to treat all rentals as equal, for lack of better information, the rent for a room with a private bathroom and kitchen and dining facilities shared with 12 other renters is approximately 1017.00 per month for workers earning 4,196.00 or less per month. According to Chase Bank, one should spend a maximum of 30% of income on rent, and so percentage-wise it is not bad but what the renter is getting for that is subpar, hopefully not to become the new standard as the global wealth divide continues to expand. The workforce does not gain any upward mobility by paying the rent that pays off the loan used to acquire the ownership of the property by the non-profit housing trust or its subsidiaries.
What does the working model of Workforce Housing look like?
The owner of the property, IHT, has an agreement with the hospital that assures the property will be leased through the employer to workforce employees. This assurance may (author speculating) be a guarantee used to help secure the initial short-term loan used to acquire the property. Thus in the Martha's Vineyard model, "workforce housing" is an arrangement with the workforce employer, moving very close to a slave-master relationship, even the language used to describe the arrangement in the Vineyard Gazette sounds like it:
The hospital has leased the building for five years from IHT. Tenants will be selected and managed by hospital staff, who also manage other hospital housing. Housing Trust Debuts Hanover House Project Yineyard Gazzette Holly Pretsky Friday, May 3, 2019
In my last story, I wondered who is the large-scale employer for which large-scale workforce housing is being proposed in the Boothbay Region? The Hanover House is small-scale workforce housing. What If a large-scale employer were to have a similar relationship with workforce housing? What happens if a workforce renter wants to change jobs? Would changing jobs necessitate moving out of affordable housing? If affordable housing is difficult to find would that prohibit the workforce renter from changing jobs? If Martha's Vinyards Island Housing Trust is the working definition of workforce housing does workforce housing give employers too much control in the life choices of the employee? How different is this from feudalism?
The narrative portrays the renters (workforce) as the beneficiaries of "social impact investing". The narrative does not always include that investors are rewarded with the opportunity to participate in a $1.8 million below-market-rate 10-year loan and receive regular payments calculated on principal and interest. The borrower, IHT, owns the property, The workforce employer (hospital) gets a workforce tied to the employer through workforce housing, controlled and managed by the employer in a town where affordable housing is scarce, and the workforce gets an affordable rent in Martha's Vineyard which means a room with a private bathroom and access to a communal shared space for other living activities, such as preparing a meal and dining, in an era when masks are a measure of safety in public spaces, and hospital workers are more needed than ever.
As of this month, 12 hospital employees will be able to live in affordable renovated rooms in the Hanover House in Vineyard Haven, and three more will live in efficiency apartments out back. Housing Trust Debuts Hanover House Project Yineyard Gazzette Holly Pretsky Friday, May 3, 2019
In 2020, in times of full-blown coronavirus a similar project was completed, the Perlman House in Vinyard Haven, also a former inn with 8 bedrooms was converted into 7 "rental apartments", - the new terminology for "rented rooms":
During 2020, we completed the renovation of an inn called the Perlman House in Vineyard Haven into 7 rental apartments ISLAND HOUSING TRUST CORPORATION AND SUBSIDIARY Management’s Discussion and Analysis For the Year Ended December 31, 2020
This style of living works best for singles in their twenties or someone working a temporary position. It is not a permanent solution for most. If rented rooms as "workforce housing" are the solution to affordable housing, what is the categorical solution for those in need of affordable housing suitable for starting a family? In the comments to the article in The Vineyard Gazette, the question is raised, what other businesses will use this model? That's a good question, especially when the Boothbay Region is talking about unidentified "large scale workforce housing".
In the not-so-distant past, It was not the case on the Boothbay Peninsula that the professional working classes, invested in education and occupational training had difficulty affording living space to own or rent. What's different now? Two answers that come immediately to mind are Airbnb's and the investment groups that are buying up housing and land across the world, as described in Meet Your New Feudal Overlords by Marlon Weems
Classic feudalism was a system where a wealthy land-owning nobility (the 1%) controlled the peasant class of workers known as serfs (everyone else). The elites provided serfs with a small piece of land on which to live. Although they paid taxes, generally, serfs owned no property, had no economic power or upward mobility. During the Middle Ages, as much as 90% of Europe’s population fell into this category. Meet Your New Feudal Overlords by Marlon Weems
Marlon Weem's article focuses on the largest-scale investors, topping the list with John Malone, a Boothbay property owner, but the model trickles down to smaller-scale investors in the land and homes ownership class. The definitions for what is an apartment suitable for year-round residents and what is a vacation rental have reversed, using the measure of what used to be a standard feature in year-round apartments- the kitchen. In the Martha's Vineyard model the year-round accommodations do not have a private kitchen while Airbnb's conventionally include a private kitchen and all other features of the twentieth-century version of an apartment. As AirBnB's drive the working people out of single-family homes, the twentieth-century model for a bed and breakfast, has become the twenty-first century model of workforce housing. The populations just switched places!
With less pollution and more centrally-curated landscaping, the twenty-first-century economic development thinking is modeled on that which was dominant during the Industrial Revolution, when living spaces were broken up into smaller and smaller units to realize more dollars per square foot.
According to Watson and Yale's mentor. the Executive Director of Marta's Vinyard's Island Housing Trust, Philippe Jordi, "the key to achieving this goal (affordable housing) was to think differently about housing and how it is financed".
True, but there is more than one way to think differently.
The smoke and mirrors used in most affordable housing plans involve motivationally positioning the project as serving those in need, people of ordinary means. while obscuring the opportunities going to investors. This has been a standard MO of the centralized state since it was deeply entrenched into the American way of life in 1968 via The United States Intergovernmental Cooperation Act of 1968, Public Law 90–577.
Words found in the purpose statement of the Financial Authority of Maine are a classic example of the narrative:
§962. Purpose: The authority will serve a public purpose and perform an essential governmental function in the exercise of the powers and duties conferred upon it by this chapter. Any benefits accruing to private individuals or associations, as a result of the activities of the authority, are deemed by the Legislature to be incidental to the public purposes to be achieved by the implementation of this chapter. [PL 1985, c. 344, §5 (AMD).]
The "benefits accruing to private individuals or associations" are the benefits of public capitalization of your privately owned business. The "public purposes" are job creation for some of the people that work for a living, subsidized by other people that work for a living, as opposed to another class that "lets their money (or the public money) do the working". (See What Marrying Into Money Taught Me About Capitalism for a good description of the difference)
In another unique partnership, with the Island Housing Trust, James Anthony, president of Martha’s Vineyard Bank, described M.V. Future Financing, a way for private individuals and foundations interested in investing $25,000 or more to provide $1.8 million in financing with Hanover House. Participants invited to purchase pieces of that loan, Anthony said. “They’re getting their money back. This is a low-risk investment,” he said. “We’re creating something that doesn’t exist elsewhere.” but that great opportunity for investors is just incidental to the "public" purpose of the Island Housing Trust which is to provide affordable housing to the working classes.
In the twenty-first century, the Industrial revolution style city planning in which living spaces were divided and divided again into smaller and smaller units is trying for a big comeback in places like the Boothbay Peninsula of Maine. The buzz in the realtor-developer is that former family summer homes can be subdivided into smaller units, perhaps modeled on Martha's Vineyard where money is saved by communal sharing of the kitchen, dining, and living room by a dozen tenants and "townhouses mirroring Martha's Vineyards model of "owner units", built wall to wall like city blocks on grounds maintained by central management.
Why do we need this on a small peninsula? As beautiful as it is, why would people want to live here like that? We are suited to be an alternative to urban crowding in a world that needs and is evolving towards the new future of work!
Affordable Workforce Housing: The Martha's Vineyard Model:
The renovated inn in Vineyard Haven marks many firsts for the affordable housing developers at Island Housing Trust. It’s the first Island Housing Trust project that uses a shared housing model; tenants will share a kitchen, dining area and living room space. Built specifically to house hospital employees, the project marks a first major housing partnership with another organization. It also marks a new opportunity for private investors to finance IHT projects through a partnership with Martha’s Vineyard Bank. Housing Trust Debuts Hanover House Project Vineyard Gazzette Holly Pretsky Friday, May 3, 2019
“It’s a model . . . that is now being brought back in vogue again so to speak. But my grandfather . . . in the early 1900s stayed in a YMCA in a single-room occupancy,” Mr. Seidman said, noting that individual bathrooms at the Hanover House make the model more realistic for modern tenants. Housing Trust Debuts Hanover House Project Vineyard Gazzette Holly Pretsky Friday, May 3, 2019
Did he just skip over the twentieth century? What's next in modernization? Replacing individual bathrooms with shared bathrooms?
Update: August 11, 2021
Worth a mention!
Another approach making steam in Martha's Vineyard, with progress being documented by John Abrams on his blog is called the MV Housing Bank, involving legislation to establish a real estate transfer fee
In November 2020, Coalition to Create the MV Housing Bank (CCMVHB) was formed to establish a regional housing bank funded by a 2% transfer fee like the MV Land Bank. The effort has a full head of steam. We have joined forces with a dozen other cities and towns to craft statewide transfer fee legislation and are working with all six towns to pass warrant articles supporting the housing bank. A dedicated funding source producing $7-10 million annually for housing would allow for progress like we have never seen before. Solutions On The Horizon By South Mountain Co. | September 10, 2021
That sounds like an interesting approach that could also be applied to the unregulated Airbnb industry, which is largely accountable to the decreasing availability of affordable living accommodations everywhere. In Abrahms's latest blog post, published yesterday, he gives a comprehensive accounting of solutions developing simultaneously in a multiplicity of Vineyard locations. I don't think the Boothbay Region should take theVineyard solutions as necessarily the right ones for Boothbay, but the Vineyard is a place to watch. I haven't had a chance to review all the new developments but it doesn't sound like the Vineyard is considering the viability of businesses in the home as affordable housing that offers space (opportunity) for a creative lifestyle, Businesses in a home as affordable housing solutions that are not cramped intersect with economic development solutions. The Boothbay Peninsula can be a world leader in innovative solutions by considering the viability of businesses in the home as the new opportunity zones in a world evolving toward remote working and decentralization.
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