By John Lavenburg
Reprinted with permission of The Inquirer and Mirror

(January 25, 2020) As an island photographer and a manager at Cisco Brewers, Emily and Ricki Millington have been through the same affordable housing struggles many on Nantucket face. Their last time renting was a room in the basement of a friend’s house, and before that a small garage apartment.

“It was hard to relax with so many people in the house. There wasn’t much privacy other than the bedroom,” Emily said.

Renting helped them save money, but after a while they decided it was time to buy a home for themselves. Finding something they could afford is a common challenge for moderate-income islanders. Last August, Ricki and Emily purchased a home through the Nantucket Housing Needs Covenant Program, an affordable-housing initiative of Housing Nantucket.

“People should definitely be looking into covenant homes,” Ricki said. “A lot of my friends with similar or even higher incomes than me don’t think they can afford a home, but it is possible.”

The covenant program allows Nantucket property owners with more than one residential dwelling to sell one of the houses at a below-market price to qualified island residents. The price is capped at $824,401, but many, like the Millington’s sell for less.

Eligible buyers are year-round residents with a combined income of less than $175,200 (150 percent of the Nantucket County median household income determined by the U.S. Department of Housing and
Urban Development).

The Millington’s covenant home is modest, with one bedroom and one bathroom, but they said it’s perfect for them. It has an unfinished basement, garden, outdoor shower and room for their five month-old pup Eloise to run around.

More importantly, it cost $420,888. It was listed for less, but they bid higher to ensure they got the house – the $888 extra representing good luck, Ricki said.

“Finding this house changed everything for us. Before, I never saw a house on Nantucket below a million dollars,” he said.

The average price of homes sold on Nantucket last year was $2.2 million, and the median price, the exact middle of the market, was $1.7 million.

Emily grew up on the island but never saw affordable housing either. Her parents – her father is a veterinarian and her mother is a translator – always rented before moving off-island. They were
surprised that she and Ricki found an affordable home, she said.

The owners of the other 86 covenant homes on the island can tell similar stories. But 87 is a small number compared to the need, Housing Nantucket executive director Anne Kuszpa said.

“We think there could be about 400 covenant homes,” she said. “We know there are a lot of buyers out there. People want to be homeowners, but they can’t because there are limited opportunities.”

This month, Housing Nantucket introduced the Covenant Formation Assistance Program to try to incentivize property owners to create a covenant lot. The program will provide a loan of up to $10,000 to potential sellers through the Nantucket Affordable Housing Trust. The money can help with surveying the land, the Planning Board application, legal fees and other costs. The loan must be paid back to the Affordable Housing Trust once the newly formed lot is sold. It is another way to expand the program to help more people, Kuszpa said.

The initial costs, however, aren’t the only reason property owners may not want to subdivide their land. Sometimes owners simply may not want to sell the second dwelling, whether it’s used for family, as a rental property, or they just don’t need to.

There are also factors that can cause buyer hesitation. One is fear of not earning a return investment on the home down the line because of the price cap. This is a misconception, Kuszpa said. Not only does the cap continue to rise, but she emphasized that most homes sell well below the top end. In recent months covenant homes have sold for as low as $375,000 and as high as $650,000. Covenant lots without a house have sold for as low as $140,000.

Former covenant-home owner Stacy Montes said she and her husband made enough money selling their covenant home to put a down payment on their current property. Purchasing the home put them in a great position as first-time home buyers.

“Because the (covenant home) was so affordable we were able to build equity and eventually graduate to a larger house that fit our growing family needs,” she said. “I don’t think that without a program like covenant housing me and my husband would have been able to get into the market.”

It was the perfect place for her family. They had almost an acre of land for their kids to play, wonderful neighbors and an amazing kitchen she misses to this day, she said.

As year-round islanders, the program makes sense for families like the Millington’s and Montes. But the program requires covenant homeowners to occupy the home at least 10 months of the year so seasonal islanders aren’t eligible. Ten months was chosen as a way to define year-round and ensure only residents could apply, Kuszpa said.

Housing Nantucket also offers a first-time homebuyers course for anyone unfamiliar with the process. Its website also shows available covenant properties. Currently, there is a lot available on South Pasture Lane. For more information, visit www.housingnantucket.org, e-mail info@housingnantucket.org or call (508) 228-4422.