Rental market in an evolution
BY MARY LANCASTER INDEPENDENT WRITER

Nantucket's rental market, including summer, winter and year 'round options, is in what one realestate agent calls an evolution.

This year, the summer rental trend is similar to last year, in that vacationers arenot staying as long as they did in the past. Cooler than normal weather is one consideration.

But, because many people who were once renters are now owners who have invested in the island's real estate, they have removed themselves from the renting category and are hoping torent what they have bought to pay for their investment. This situation, in particular, is creating a somewhat

"soft" summer rental market by adding to thesupply of available homes. Real estate agents say thesupply is not being met by demand.

"They are putting their money into the property instead of putting it out and not having anything forit," said Carol Coffin of Coffin Real Estate. "In thelast couple of years the supply [of summer rentals]has almost doubled."

In addition, veteran realty agents say "life issues,"along with the increasing cost to get to Nantucket andprices here for goods and groceries, play into the equation when tourists are deciding where to go for vacations.

A couple of decades ago, many families spent the entire summer from June into September onNantucket. That is not often the case any longer, saidCoffin, partly because those families' children havegrown or may want to attend camp or are preparingfor college. Though there are still visitors who will pay $7,000 a week for a rental, Coffin said not manyare booking for all of July and/or August. She speculatesthat this summer's cooler weather may be keepingJuly rentals down, but that is only a portion of thepicture.

"The weather is not as much of an issue as monetaryor other life issues," she said of the changingrental dynamics.

Coffin said the minimum summer rental is one week. Currently, houses start around $3,500 perweek and go as high as $25,000. At the low end,homes are usually small, older and without a view,have three bedrooms and two baths and are scatteredamong various island locations.

For $8,000 to $11,000 a week, renters will likelyhave an air-conditioned, four to five bedroom housewith four baths. At the top of the line, $25,000 perweek rents a large, air-conditioned compound with atleast water views, a pool, and enough room for severalguests and the hired help.

"A lot depends on location, condition and furnishings,"said Coffin. "But a lot of the people who are inthe $3,500 range - after they pay to get their car overand eating out - are not staying as long as they usedto. Now it's one or two weeks instead of three. Theycan go to Block Island or out West. They can go toother places. We don't want to outprice ourself. Oureconomy is our tourists."

Melinda Vallett, a broker at Denby Real Estate,said though she has done as many summer rentals thisyear as last year, she is getting more calls than everfrom owners wondering why their houses are not fullfor the season.

"I just got a call from a woman who usually comesfor two weeks, but she's only coming for one thisyear," said Vallett. "People are splitting up their vacationtime. A six-week [stay] is the longer [vacation].In the past, we would have done more for the seasonand more month-long rentals than now. Many ownersused to have a two-week minimum, but now they haveto open up to one week."

Vallett also said people are booking later and trying to negotiate the price.

"I haven't seen that in the past. People used to callon Labor Day to secure a rental for the next summer,"said Vallett. "People know that if they call now therestill will be availability in the summer,and they want to negotiate. A few yearsago, if somebody called me in the middleof July asking what I had in August, therewouldn't be anything in August.

"We have a greater inventory. We'reall feeling that," Vallett continued. "Andit's not as affordable as it used to be, sowe're seeing those young families lookingfor something affordable."

Winter and year-round rentals, that once were frequently handledthrough real estate offices, are nowmainly direct transactions betweenproperty owners and applicants, eitherthrough classified ads in local papers oron the Internet. And the costs and stipulationsassociated with these rentalshave escalated.

Winter rentals used to be cheapbecause people had to do the spring"shuffle," but are not as inexpensiveanymore. Further, they, along withyear-round rentals, often do not includeutilities and require first and last monthrent payments up front, as well as securitydeposits.

Penny Dey, owner of AtlanticEastReal Estate, said she wishes she hadmore off-season places to offer.Currently, she lists a winter rental onthe edge of town with three bedrooms,two baths and oil heat for $2,000 amonth, plus utilities. She also has ayear-round cottage in town with twobedrooms, one bath and oil heat for$2,000 a month, plus utilities.

Dey said winter rentals now are typicallysplit between two or three adults.Year-round houses or apartments areoften filled by couples. If the rent is$2,000, Dey estimates that costs each inthe couple about $250 a week, notcounting fuel and electric bills.

"Those of us in the old days who were able to find an inexpensivewinter rental for one person - that's athing of the past, because increasingly,homeowners who rent out in the summermonths like to use their propertiesin the off-season," said Dey.

"In the old days, summer was overearlier and it started later," Dey added."Now we have all these holidays whichtake us into the winter. We are workingwith some owners to rent year-roundand be assured of a certain amount ofincome and occupancy. Some peoplehave bought land where they can builda duplex and live on one side and rentthe other side."

It is too soon for significant numbersof winter or year-round rentals tobe advertised; however, the least costlywinter rental listed now is $1,550 plusutilities for three bedrooms and two anda-half baths.

The least expensive year-round listingis a one bedroom apartment at$1,800 a month. There will be lessexpensive places available as the summerwinds down, but they will notreflect the numbers of the 1970s and1980s. During those periods, yearround,spacious apartments or pleasantcottages often averaged $300 a month,including utilities.

"With the cost of a year-round rentalstarting at $1,800 for a one bedroom,that means that somebody would haveto earn about $65,000 a year if their rentwas to be one-third of their income,"said Dey, referring to the standard formulafor what people should pay fortheir residence. "If you are paying$1,800 a month in rent, on top of utilities,groceries, health insurance andauto expenses, that doesn't leave muchfor anything else. It's bleak."

Fortunately, besides the low-income rental housing in Miacomet Village,the island has another affordable rentalprogram through the Nantucket HousingOffice which began in 1996. While neitherprogram has a huge inventory, theNHO is adding more units as quickly asthey can be acquired, and residents areencouraged to sign onto the MiacometVillage waiting list.

The NHO has a housing recyclingprogram whereby the agency eitherobtains homes to rent through privatedonors who receive charitable tax deductions,or by building new homes withfunds from donations, the CommunityPreservation Fund, state grants or a preferredrate mortgage from NantucketBank, which is paid from rental income.

The current stock includes 15 singlefamily homes with between two andfour bedrooms, and three, two-familyduplexes, explained NHO executivedirector Bob Nussbaum. The agencywill soon add five more homes to thegroup.

All leases are year-round. Thedwellings are in various island neighborhoodsand rent from $900 to $1,500 amonth, based on the number of bedroomsand family income.

The maximum allowable income fora family of four is $67,000, representing80 percent of the island's median earnings.

A single parent with one child maynot make more than $62,320.

Priority is given, but not limited to,families with more than one child.Applicants must be residents, and previouslandlord references are required.Turnover is low.

"Once people get into a house theycan afford, until they can save enoughmoney to look at our covenant (affordablepurchase) program, they're notgoing to move," said Nussbaum.

There is no waiting list for the NHOhousing. Selection is done through alottery after a property is advertised forfour weeks and several island humanservice-related agencies have been notifiedthat a new home is available.

If a tenant's family size or incomechanges within a lease period,Nussbaum said his office will do everythingfeasible to assist the tenant withaltering housing needs.

"We never want to see anyonebecome homeless," he said. "We workwith our tenants to see that whatevertransition has to be made, goes assmoothly as possible."

Owned by the Nantucket HousingAuthority, Miacomet Village opened in1989 and added another section in 1997.There are 10 elderly/disabled apartmentsand 12 family apartments in the originalsections on Manta Drive and BenjaminDrive, as well as along Miacomet Road.The last phase, Norquarta Drive, has 19family units.

NHA executive director, ReneeCeely, explained that rents are based on30 percent of gross monthly income.Units range from one bedroom to fourbedrooms.

While local preference may be exercisedin the state-subsidized portion ofthe development, the federally subsidizedNorquarta Drive applicant listmust be open to anyone. She encouragespeople to get on the list, eventhough normal turnover is slow,because local people's names can moveup quickly if those on the list fail torespond to status updates.

The Miacomet Village income ceilingfor a single person is $47,100. Afamilyof four may not earn above $67,300.Under the federal program, peoplewhose incomes rise to above the 80 percentmedian income for Nantucket mustmove from the housing.

The state program is more lenient. Itallows a person whose income has risento stay on in a unit as long as 30 percentof their income remains less than whatthey would have to pay for a similarresidence at market rates. Under currentgovernment calculations, $1,443 is thefair market monthly price for a twobedroom apartment on Nantucket.

At Miacomet Village, renters musthave their income verified annually.The units are not furnished, howeverNHA pays sewer and water utilitiesfor the majority of apartments, alsopaying for electricity for the elderlyhousing. There are no lease limits aslong as tenants continue to have qualifyingincome.

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