A tenant moves out of one of your units. Rent’s square. But they left a kicked-in interior door that needs replacing. It’s $600 job, not wear and tear. So you do what feels obvious: you deduct $600 and mail back $900 of the $1,500 deposit, with a photo of the door and a copy of the contractor’s invoice. Clean and documented? It doesn’t matter.

Six weeks later you’re holding a demand letter for $4,500 plus interest, court costs, and the tenant’s attorney’s fees.

Welcome to Massachusetts General Laws chapter 186, section 15B. §15B is the most underestimated landmine in small-landlord operating. The penalty has nothing to do with whether your $600 deduction was fair. It’s tied to whether you followed a specific sequence of bureaucratic steps, most of which happen long before move-out. Miss one of the wrong ones and the law triples your entire deposit and hands the tenant a lawyer for free.

§15B is strict-liability choreography. Good intentions are worth nothing. The dance is everything.

Why this law bites good operators hardest

Most landlord-tenant law is about bad actors — the guy who pockets deposits and ghosts. §15B is different. It assumes you’re holding someone else’s money in trust, and it sets a series of deadlines and documents you have to hit exactly, on time, in writing. Slumlords don’t read it and roll the dice. The people who actually get burned are the conscientious ones who think being fair is the same as being compliant.

It isn’t. Let me show you the four places it goes wrong, in the order they happen.

1. The account (this is the fatal one)

The deposit must sit in a separate, interest-bearing account, in a bank located within Massachusetts, held beyond the claim of your creditors — meaning if you got foreclosed on or went bankrupt, that money is the tenant’s, untouchable.

In plain terms: it can’t live in your operating checking account. The second you commingle a deposit with your own money, you’ve violated subsection (6)(a) — and (6)(a) is one of the three triggers for triple damages. This is the most common mistake and the most expensive one. It’s also invisible; nobody finds out until move-out, when the deduction you made turns into a discovery request about which account the money was in.

2. The move-in paperwork (two documents, two deadlines)

Within 30 days of taking the deposit, you owe the tenant a receipt stating the bank’s name and location, the account number, and the amount. Skip it and the tenant is entitled to demand the deposit back immediately.

Separately, upon receipt of the deposit or within 10 days of the tenancy starting (whichever is later), you owe a statement of condition — a written inventory of the unit’s existing damage. The tenant gets 15 days to disagree and add their own list. This document is the only thing that lets you later prove the door was their damage and not pre-existing. No statement of condition, and your move-out deduction is a he-said-she-said you lose.

3. The interest, every single year

The deposit earns 5% per year, or the lower rate the bank actually pays, and you must pay or credit that interest to the tenant at the end of each year of the tenancy — and within 30 days if they leave mid-year. Most small landlords simply forget this one for years. It quietly stacks up, and at move-out it becomes another count against you.

(One genuinely good piece of news buried here: you owe the lesser of 5% or the bank’s actual rate. You’re passing through real interest, not guaranteeing 5% out of pocket. Hold the deposit somewhere that actually pays interest and this is a wash.)

4. The move-out (the other fatal deadline)

Within 30 days of the tenancy ending, you must return the deposit — and if you’re keeping any of it, include an itemized list of damages, sworn to under the pains and penalties of perjury, with written evidence: estimates, bills, invoices, receipts. Miss the 30-day return and you’ve hit subsection (6)(e) — trigger number two for triple damages.

The hierarchy of pain

Not every mistake is equal. Know which is which:

These triple your whole deposit (3× + 5% interest + court costs + their attorney’s fees):

• Holding it in the wrong account / commingling — (6)(a)

• Not returning it within 30 days of move-out — (6)(e)

• Not transferring it to the buyer when you sell the building — (6)(d)

These don’t triple it, but you forfeit the right to keep a dime for damages (you owe the full deposit back):

• No sworn, itemized, documented damage list within 30 days — (6)(b)

• A lease with a clause that conflicts with §15B (e.g., “tenant forfeits deposit on any breach”) — (6)(c)

• Botching the receipt or statement of condition undercuts your ability to claim damage at all.

Back to that door

Now replay the opening. Your $600 deduction was legitimate. Your photo and invoice were perfect. But the deposit had been sitting in your regular checking account the whole time — a (6)(a) violation.

So: you forfeit the $600. You owe the full $1,500 back. And because the wrong-account failure is a triple-damages trigger, the tenant can recover three times the deposit — $4,500 — plus 5% interest from the day it was due, plus court costs, plus the fees for the lawyer they didn’t have to pay up front because §15B shifts those fees to you. A clean, fair, $600 deduction becomes a $5,000+ check and a bad afternoon in housing court.

The six steps that keep you out of court

None of this requires being a lawyer. It requires a system you run the same way every single time:

1. Open a separate, interest-bearing deposit account at a Massachusetts bank. One per unit is cleanest; never, ever commingle. This single step neutralizes the most expensive trigger.

2. Send the receipt within 30 days — bank name, location, account number, amount, in writing.

3. Do the statement of condition at move-in (within 10 days), and make the tenant sign it. This is what makes your move-out deductions defensible.

4. Pay the interest every year, on the anniversary, in writing — even if it’s a few dollars.

5. At move-out, return the balance within 30 days with a sworn, itemized list and every invoice attached. Calendar the 30 days the day they hand back the keys.

6. If you sell, transfer the deposits to the buyer in writing and document it. (6)(d) is a triple-damages trigger people forget exists.

Do these six things, every tenancy, and §15B goes from a landmine to a non-event.

The lesson

§15B doesn’t actually protect tenants from predators. Predators ignore it. What it does is convert ordinary disorganization — a deposit in the wrong account, a missed anniversary, a late check — into catastrophic, fee-shifted liability for the exact operators we should want in the business: the careful, small, hands-on ones.

You don’t fix that with good intentions. You fix it with a system that does the choreography for you, so being fair and being compliant are finally the same thing. That’s a tooling problem — and it’s why I built Goodstander: it holds the deposit logic, accrues the interest, generates the receipt and the statements, and counts the 30 days so you don’t have to.

I’m an operator, not an attorney, and this isn’t legal advice — it’s how I keep myself out of trouble. §15B has more wrinkles than fit here (last-month’s-rent rules, condo and multi-unit specifics, the exact remedies). Read the statute (M.G.L. c.186 §15B) and the Attorney General’s guidance, and run anything consequential past a Massachusetts landlord-tenant lawyer.

Now more than ever, we need real solutions to bring down rent. Rent control is not one of them. We tried it in Massachusetts from 1970 to 1994. Buildings fell into disrepair and the number of rental apartments declined. Property values of controlled buildings were depressed by 20-45%–reducing municipal property tax revenues. Tenants stopped moving, blocking new renters and apartment-switchers. Unlike New York, we learned from our mistakes and banned rent control. We risk re-learning this hard fought lesson this November. The most severe rent control in our state’s history is clearing hurdles to make it onto the ballot.

North Adams, and other gateway cities, will be the first to see rent control induced blight. The housing stock is old, even by Massachusetts standards, mostly built between 1880 and 1900. Forget about “in five years,” these buildings need work now. The only way this happens is if rents cover renovation cost. If rents are capped, goodbye renovation.

Let’s walk through an example close to my heart: 55-57 Hall Street, North Adams. I do real estate development. This was my most recent project. It’s a four-family built 126 years ago. One apartment was condemned, the center of the building was sinking, the support columns in the basement were rusting out, moisture permeated, two chimneys were on the verge of collapse, rodents infested the basement and trash area, the front lawn had thousands of cigarette butts, and two drug dealers were dishing meth and other substances. The non-criminal tenants were terrified of their neighbors and kept silent for fear of retribution. This building was in bad shape. Over the course of three months, I spent $40,000 and my labor to resolve each of these issues. The drug dealers were replaced with a teacher and childcare business owner. The residents and next-door neighbors started feeling safe. This was not charity. Over time, the market-rate rents will pay back the renovation cost. If rents were stuck, it would have been a loss of time and capital. The alternative wasn't cheap stable housing, it was a condemned building and neighbors living next to a meth operation.

There are alternatives to rent control that work. Highly desirable places like Austin and Minneapolis kept or lowered rents while maintaining high standards of living. Austin reduced rents by 19% from its peak. Their secret? They increased the housing supply by 14%. Minneapolis saw rents rise by only 1% while the rest of Minnesota rose 14%. They did this by increasing housing supply by 12%. The primary barriers, many of which Austin and Minneapolis tackled, are the following:

• Restrictive zoning and parking minimums. Rules that forbid converting a single-family home or empty lot into an apartment building, and force parking that often can’t physically fit.

• The threat of rent control itself. Uncertainty over future caps makes lenders and developers wary of financing new construction and major renovations.

• Post-1990s fire code. Sprinkler systems, two interior stairways, fire-rated materials. The sprinkler mandate alone made a fourth unit financially impossible in a three-unit North Adams building I own — so the apartment never got built.

• Post-2000s energy code. Continuous insulation, air-sealing (which then forces mechanical ventilation), high-performance windows, and mandatory efficiency testing — each adding thousands per project before a tenant moves in.

• Cheap holding costs for speculators. Owners sit on vacant buildings and lots indefinitely at little cost, keeping usable property off the market. A vacancy tax would push them to build or sell.

Today’s onerous fire and energy codes far surpass those of the 1980s, when housing was far more affordable. Altogether, the National Association of Home Builders found regulation accounts for 40.6% of multifamily construction cost.

Rent control won’t lower your rent. It will hollow out the very buildings renters live in — the way it emptied Massachusetts apartments for 24 years. The teacher and childcare business owner on Hall Street found homes because the building was cleaned up, not because rent was frozen. Vote no in November. We can lower rents the way Austin and Minneapolis did — by building — and keep North Adams’ comeback going.

That call is the thesis of this piece. Old buildings reward humility and punish romanticism: treated well, they age gracefully. Done casually, they eat your lunch. And if you buy and operate small buildings, every pre-war system is mis-priced by somebody — the seller, the buyer, or both. Sellers price the charm; you price the systems.

My credentials are hard-fought and expensive. I took over management of a 24-unit building built in 1903, and bought and renovated a 3-family and 4-families built in 1880 and 1900. There are 393 years of accumulated maintenance between them. The trees in the 3-family’s floors were alive when Benjamin Franklin was writing with a quill; they were saplings during the witch hunts in 1690s Salem. History is under your foot. Unlike a museum, you are in charge of the maintenance bill.

I used to think preservation enthusiasm was a euphemism for refusal to change. Operating these buildings changed my mind: preservation is what makes one room feel full and welcoming, and another lonely and sterile — and it’s why an old-growth floor leases an apartment that a vinyl plank can’t. It fills the heart. The rest of this is about what it does to your numbers.

Some historical systems are liabilities, not charms

The 24-unit has a 100+ year old elevator. It breaks down regularly. The machine moves by the winding and release of a 100-year-old steel drum — an installation type banned in the 1930s–1940s. The few technicians who still understand drum elevators wield immense power, and they know it. The steam-punk crank and gear machine room should be an exhibit not infrastructure.

Here’s what that power costs. We raised dues by 30% in 2024 just to get ahead of the break–bandaid-fix cycle. The elevator was set to consume 20% of our budget before long-term resolution in 2025; a healthy elevator should consume less than 5%. There’s also a 2021 lawsuit our insurer’s attorney is still responding to — it named the homeowners association as liable under a lease that implied a working elevator. Read your leases for implied amenities, because someday an attorney will.

We cycled through three elevator contractors in two years — the second ghosted us after we asked for a summary of work — before hiring a consultant. Hire the consultant before the third contractor, not after. And make sure they strictly consult and don’t also contract; that’s what aligns the incentives. Ours confirmed that further repair, rather than a $500,000 replacement, was prudent, and introduced us to the contractor we use to this day. It was the best $2,250 we spent on that dastardly machine.

On your next walkthrough, ask what moves the elevator. If the answer is a drum, avoid it if you can. Otherwise, budget for the consultant — and expect elevate-d maintenance bills.

Materials last only as long as their weakest fastener

Folk wisdom says slate roofs last forever, and intuitively rock-based shingles should — rocks have lasted millions of years. But those ancient stones are held up by rusty, man-made nails, and the nails last about 100 years. When one rusts out, more follow. Repairing one tile often breaks several others, which drives up the cost. And once you find one of the three 60-year-old guys who still work on slate, get used to his presence: he will be back every two years with a $500 bill. An old slate roof isn’t a roof; it’s an annuity payable to one of three guys, indefinitely. That’s why North Adams — the land of late 19th century buildings — is also the land of slate-to-asphalt conversions.

Which brings us back to the seller. He was marketing a roofer’s annuity as a premium feature. My $30,000 wasn’t a haggle; it was the line item he hadn’t priced. Underwrite the nails, not the stone.

Assume nothing is insulated

A friendly landlord tipped me off to knock on my walls. I protested — what, to say hello? No: listen for a hollow ring. Sure enough, my walls sounded like a drum. MassSave came to inspect, and what they found I could not believe: zero insulation. I had the fanciful idea that houses of this era were stuffed with horse hair. It was wood siding, a few inches of nothing, and the interior plaster-and-lath wall.

The knock test is the cheapest diligence you will ever run, and you should underwrite zero insulation until a wall tells you otherwise. The fix can be heavily subsidized: MassSave covered much of the $10,000 bill — blown cellulose (shredded paper) in the wall cavities, foam boards in the attic rafters, weatherstripped doors, foam-sealed foundation drafts. On one unit, the gas bill dropped from $205 in November 2025 to $133 in December 2025.

One wrinkle to budget: the program inspects before it pays. My inspector required work orders first — certify the absence of knob-and-tube wiring (fire risk) and reduce the carbon monoxide output of a boiler. $1,300 later, I was ready to rock and roll. Treat utility programs as subsidized capex, and carry a line for the prerequisites.

Electrical systems remember every shortcut

In one unit, the microwave, refrigerator, electric stove, coffee machine, and a few lights all shared one circuit. The breaker had tripped so many times that it failed — at night, of course. The tenant was kind and accepted non-emergency service the next day, and for $450 an electrician moved the microwave and lights onto their own circuit. No issues since.

The detail that kept it at $450: the panel had space for the additional breaker. So open the panel during diligence. Spare slots make overloaded circuits a punch-list item; a full panel turns the same symptom into an entirely different capex conversation.

Forgiving materials age better than rigid ones

Foundations went from mortaring big rocks together, to cut stone blocks, to concrete, to reinforced concrete with vapor barriers. My building is from the big rocks era (the rocks courtesy of Ice Age glaciers, which tilled them up from deep in the ground). Water is the enemy of field stone: it sneaks into cracks, freezes, widens them, and eventually finds the basement, where it breeds mold and weakens wood beams. The prior owner had capped most of the dirt floor with concrete and piped the seepage to a pump — helpful, but the basement stayed moist through spring and summer. The final fix came, despite my skepticism, from MassSave: a thick plastic sheet over the water’s route and the remaining dirt. I now get chapped lips walking into the basement.

So don’t discount a building for field stone; discount it for unmanaged water. Priced properly, the fix is a pump, a concrete cap, and a plastic sheet — not a foundation replacement. Field stone is in some ways a great system: lime and stone are comfortable getting wet and drying repeatedly, unlike concrete, and they fail slowly and visibly, allowing for repair. Concrete can fail without warning, creating a false sense of security. These primitive foundations have outlasted early 20th century concrete, and many expect them to outlast reinforced midcentury concrete too. ICF versus field stone is the slowest race no one is watching; it will outlast any living person today.

The closing tab

Old buildings shine in their old-growth floors and their field stone foundations, if the water is managed. The mispriced liabilities are drum elevators, slate at the end of its nails, walls full of nothing, and circuits that remember every shortcut. On your next walkthrough: ask what moves the elevator, underwrite the roof’s nails, knock on the walls, open the panel, and trace the water’s path through the basement.

My tuition ran a 30% dues raise, contractors who ghosted, a $2,250 consultant, and over $100,000 in renovation investment. After two years of stewardship, I can say the learning curve was worth it — and now I can say it in dollars. The man with the slate roof is still holding out for a buyer who can’t.

The driving factor is the out-dated management model. When trustees evaluate managers they prioritize the measurable cost: the monthly fee. This opens the door to hidden costs and misaligned interests. To compensate, managers profit from professional service fees and internal contractors. Management companies drive further profit by juggling a high volume of buildings. Not to mention the bloat from office space and employees. The result is minimal attention and expensive management. It’s a low margin business that gets by on tricks. But it doesn’t have to be this way.

Wursten & Co. created a new model to push back on this broken industry. We have substantially lower overhead by using technology to streamline operations while maintaining zero employees and only flex office space. Ask your building manager why they aren’t able to offer the following:

• 24 hour response times, including weekends for emergencies

• Annual vendor re-assessments on price and performance

• Easy-to-read annual budgets including income statement, balance sheet, and game plan from the building manager

• Transparent pricing: All professional and internal services are used only if more competitive than other contractors. Trustee approval required

• 100% timely unit owner dues and assessment payments

• Selective client engagements to maintain high standards

This model works. Let’s look at our performance over the nine months (and counting) that we managed 7 Central Square. This is a twenty four unit mixed-use building.

Reduced operating costs by 13% | $12,588

• Reduced cleaning service bill by $3,000

• Reduced management fee by $2,700

• Reduced insurance loan interest by $2,110

• Reduced accounts payable interest by $2,498

• Reduced professional services by $1,500

• Reduced alarm service bill by $780

Reduced accounts receivable by 56% | $23,427

• Reduced accounts receivable from $53,509 to $30,082

• 100% of units are current on payment plans and monthly dues

• Complete payoff expected by 5/1/2026

Improved building maintenance

• Reduced building leaks from four (4) to zero (0)

• Returned the building to fire safety code and insurability standards

• Fixed the buildings roof, sprinkler, and intercom systems

• Caught over 30 rats and substantially reduced the trash area rodent issue

• Negotiated free cleaning service for the trash area and common area walls

• Secured access to all common doors

Effective building management is possible. Let’s discuss a plan for your building: caleb@wursten.co.

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I arrived in the Southern Berkshires two weeks ago to look at the real estate market. The region’s long-term prospects are attractive. It’s 2.5 hours to both New York City and Boston, it is home to a gorgeous mountain range, and has as a clutch of renowned cultural venues. It’s an unusual combination of natural beauty and prosperity. Short term rentals are popping up all over the region to dip into the bounty. The Berkshires have 25% more Airbnb listings than three years ago, and 6% more than last year.

The rapid climb in supply is limiting occupancy rates and breaking the investment math. This is great news for local workers looking for housing, less so for yield hunters. Below is the math on a six bedroom Airbnb: 560 Stockbridge Road, Lee.

Airbnbs in the Lee area can expect a 40% occupancy at $160 / night / room. Average performance for this property would yield -11.48%. That’s a loss of $11,480 per $100,000 invested. A few assumptions in this model were a 6.5% mortgage, 25% downpayment, $28,800 in cleaning fees, and a 20% management fee. The occupancy expectation on this property would need to be 60% to attract serious investors. The full model is here.

This isn’t to say the Berkshire’s Airbnb volume will decline. There are over-housed folks warming up to the idea of renting spare bedrooms. The marginal cost of renting an unused bedroom is low, even lower for those that enjoy company. Suppliers with lower marginal cost win. Locals are beating investors on marginal cost. It costs investors $42,000 up front and $26,000 / year to deliver a new Airbnb room rental. It costs an over-housed local almost nothing. This marginal cost dynamic is why short term room rentals are a local benefit. New York City reached this same conclusion in their STR policy: full units are off limits but rooms are fair game.

There are 10% yield investments in the Southern Berkshires, but short term rentals are not currently one of them.

Inflation and housing cost are the most pressing economic concern for Americans in 2024, according to Gallup’s annual poll. Since December 2019, the monthly home payment more than doubled. The cost to purchase a home rose 51%. Rents rose 31%. Inflation and barriers to housing production interacted to rocket the country’s largest asset class. The result is a substantial wealth divide between those that purchased before the bonanza and those still on the sidelines.

Needless to say, housing is top of mind for millions of voters in the 2024 presidential election. It’s an issue ripe for a political champion. This was the backdrop of Kamala Harris’ speech on housing solutions yesterday. It’s a good thing that housing is getting airtime, but I’m left with mixed feelings on the speech.

The headline pushed by Kamala’s team was the construction of “3 million homes” in her first term. This is the kind of ambition we need. Unfortunately, her first two proposals are not promising – homebuyer subsidy and crackdown on software. The third proposal has potential – cutting red tape.

Proposal #1: $25,000 subsidy to first time homebuyers

A homebuyer subsidy will drive up housing prices. When there is not enough cake to go around, giving people more money to buy cake does not solve the problem. Baking more cakes is the solution. Subsidies are particularly ineffective in supply constrained markets, like housing. Not to mention program cost. It would have cost $33 billion if implemented in 2023. For context, the federal government spent $45 billion on infrastructure last year.

Proposal #2: Crackdown on price fixing software

Pricing software is an unlikely cause of rent and home price inflation. The alleged culprit is RealPage which gives landlords vacancy and rent rate visibility into competing properties. RealPage is party to an ongoing Department of Justice price collusion investigation. But RealPage has only a 7.5% market share of property management software. This is hardly enough to enable its clients to drive national housing inflation. RealPage and similar softwares allow landlords to accurately price their properties at going rates, in some cases less than they would have concluded themselves. Plus, there are plenty of industries where competitors know each others prices and customer flow – look at gas stations and grocery stores.

Punishing rational market actors was a common theme in her California Homeowner Bill of Rights, which she drafted as attorney general. In her view, landlords, banks, and investors are to blame. Not the NIMBY towns that block construction. The misalignment of housing production incentives are detailed in “States Should Govern Zoning”.

Wursten & Co.

States Should Govern Zoning

Housing production is stuck in a Tragedy of the Commons. A Tragedy of the Commons occurs when misaligned incentives cause the loss of a public resource. Example: the overgrazing of the Boston Common by cattle herds in the 1600s. Like over-grazing shepherds, over-regulating towns act against the public’s interest to their own…

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2 years ago · 2 comments · Caleb Wursten

Proposal #3: Cut red tape at state and locals levels

This is where things get exciting, but also politically fraught.

In the 2020 presidential election approximately 52 million renters voted, compared to 115 million homeowners. Kamala is trying to thread a needle by activating renters while not signaling negative outcomes for the far larger group of homeowners. There were no direct mentions of “lower housing prices” nor “zoning reform” but we did get “cut red tape”.

It is yet to be seen which red tape will be cut. It would be a herculean effort to wrestle control of zoning from towns. Though states have made in-roads. Montana passed a law to allow second dwellings on all single dwelling lots. Massachusetts recently passed similar legislation. Possible “cut red tape” outcome are providing federal incentives to YIMBY towns or speeding up building permit timelines. Both ideas were previously endorsed by Kamala.

In sum, housing is inching its way into the presidential race. Voting dynamics make rapid relief unlikely, but at least proposals are being made.

The data is in – rural leisure towns are trouncing urban centers in property appreciation. The winners are Cape Cod and the Berkshires. The laggard is the Boston-metro area.

In Massachusetts, Cambridge real estate values appreciated the slowest at 12% over the last three and a half years. The wealth created by the “world’s most innovative square mile” left city limits. The benefit of a short commute to the office weakened alongside ongoing urban issues. “The most obvious thing you’re trying to avoid is to have somebody come in, fight off 90 minutes round-trip traffic, so they can sit in a cube and stare at their monitor,” said Peter Church, chief people officer at Canton-based insurer Point32Health. A Cambridge turned Nantucket resident myself, I was relieved to swap dodgy encounters in Central Square for dips in the ocean. Migration is orienting around quality of life. We are in the midst of a rural renaissance.

“I think most companies have resigned themselves to the fact that flexible work schedules are here to stay,” said Jim Rooney, president of the Greater Boston Chamber of Commerce. Hybrid schedules and remote-friendly businesses are enabling the out-migration.

Woods Hole on Cape Cod topped the property appreciation ranking. The highly livable beach town appreciated 45%. Woods Hole is a peaceful and nature-rich small town 1.5 hours from Boston. It is an ideal residence for the hybrid executive or entrepreneur.

Cape Cod as a whole saw market leading appreciation. Southern Berkshires towns, popular among New Yorkers, also stand out. The towns in Great Barrington’s orbit boomed: Egremont, Sheffield, West Stockbridge and Otis. They are rural but not impossibly so with a 2-3 hours drive to both Boston and New York City. Nearby swimming holes, meadows, and ski mountains are plentiful. Many towns in the Northern Berkshires remain affordable.

The alternative explanation for the rural vs urban property value divergence is housing production. Perhaps the Boston-metro area produced enough housing to hold down appreciation. There is some truth to this. Using a three-month average ending in May 2024, Boston produced 8.4 homes per ten thousand of existing supply. Barnstable county, the primary population center on Cape Cod, produced 0.8 homes. In-effect the Boston metro-area is being hit by a double whammy of increased housing production (a good thing) and the loosened grip of in-office work.

Nevertheless, population growth patterns confirm the rural renaissance. The map below shows the top thirty Massachusetts towns by population growth. This is overlayed onto the original map showing the fastest and slowest appreciating markets. The fastest growing towns are rural, not urban.

The Affordable Homes Act, passed on July 31, 2024, will accelerate the out-migration. Accessory dwelling units (ADUs), second dwellings on a lot, will be allowed in all municipalities. Many rural towns forbade the construction of ADUs. This legislation is timely. As noted, the out-migration is rapidly pushing up prices.

Time will tell how long rural escapes can out-perform urban economic engines. My bet is a while longer. Off to build in the Berkshires!

For the full ranking and data email caleb@wursten.co.

Nantucket has one of the most advanced housing crises in the country. The Steamship Authority is cutting service by 7 percent, all five of the firefighters hired in 2018 left, and the latest wave of teachers are leaving the public school. Employers of critical services can't find housing for their staff. It’s one thing for a restaurant to close on Mondays. It’s another for the ferry to drop a trip. Migrating whales aren’t the only threat to ferry service. We don’t have the benefit of a cautionary tale pushing us in the right direction on housing policy. If we don’t figure it out, we will be the example others point to.

An expert review of the Nantucket Fire Department concluded, “the grave reality is that the current levels of manpower are going to kill firefighters; if not sooner than later.” I’m friends with five first-year teachers, four are leaving due to housing. There goes my winning Charlie Noble trivia team. The remaining teacher fortunately lives in his parent’s house.

Some progress has been made. For the past several years, we funded affordable housing at Town Meeting. Now we are allocating these funds. But public skepticism and misguided proposals threaten our momentum. “Affordable housing” carries baggage from federal housing projects, rent control, 40b developments in seasonal communities, nonsensical restrictions, and other polarizing programs. Affordable housing professionals, myself included, must admit these faults to maintain the integrity of our work and make room for real solutions – like deed restrictions.

A deed restriction is a rule that governs the use of a property, embedded in the deed. Housing Nantucket’s Covenant Program creates permanent deed restrictions. The Nantucket Affordable Housing Trust soon will purchase deed restrictions on open market houses. It’s an asterisk on private property, in our case ensuring it will be owned by members of the community in perpetuity. Zoning also governs the use of property but is cumbersome to apply one property at a time, which is the advantage of deed restrictions.

In most places housing demand is quenched by simply removing barriers to development. Zoning reform in New Zealand caused a construction boom which reduced rents dramatically, by as much as 33 percent in some cities. It is possible to reduce rents on beautiful islands.

Curiously, Nantucket tried this and got higher rents and scarcer services. More housing, counterintuitively, exacerbated our housing crisis. It turned out that more permissive zoning created more second homes. Town Meeting voters are rightly exhausted by new no-strings-attached zoning requests and vote them down. Second homes need workers but don’t provide work. We can measure the imbalance by looking at the population and number of workers in the peak season. In 2014, each seasonal worker served 10.9 people. In 2021, each seasonal worker served 21.9 people, double in just seven years. Working, year-round homeowners feel this weight on their shoulders alongside juiced home equity. Selling out to a fat-walleted off-islander is a constant temptation. Unless we provide an attractive alternative, locals will continue taking this deal.

To correct course we need to accumulate deed restrictions through density incentives, public cash, inclusionary zoning and private deed-restricted developments like those being done by Housing Nantucket. The restrictions on homeowners should be narrow to achieve scale, avoid perverse incentives like discouraging work, and respect property rights.

Let’s stay focused on the problem – the declining availability of workforce homes. And the solution – permanent workforce occupancy through deed restrictions.

Nantucket is the type of place where you go to the library in shorts and run into Stephen Schwarzman talking about global equity markets. He’s worth $41 billion.

For a long time I was convinced it wasn’t special. After graduating from Nantucket High School, where I was voted most likely to “leave and not come back,” I did in-fact leave in a hurry. Nantucket felt limiting. There’s only so many times you can bike to the beach. You meet everyone. The most lucrative job was selling real estate to rich people; it was easy to dream of something more. If you really want to know what it’s like growing up here – picture this. You stay in your favorite hotel for a month too long. Now imagine everyone you know tirelessly works the hotel at the bequest of strangers. That was my experience of growing up on Nantucket. I did not forecast moving back.

I spent seven years searching for what the island lacked. Surely Nantucket could not be the end-all the world had to offer. I tried everything: startups, White House internship, expat life in Asia, Latin America and Europe. The quest did not reach a resolution. So I returned to Nantucket. As the outdoor showers and bike rides to the beach racked back up, I came to realize what I had missed. It was what everyone else had seen the whole time.

Nantucket puts you at ease. Though it’s more than a pretty place. It retains a rural elegance with ample social infrastructure. Most of the world has one or the other. Maine and Sicily are beautiful places, but the quality of social life and services are not there. You start to feel antsy after awhile. New York has the social but not the rural. Nantucket finds a sweet spot.

This rural buzz Nantucket created was many years in the making. The community made a series of good decisions. This is a playbook that other towns can use.

• Rural preservation: The Land Bank was established in 1983 which allowed the community to directly profit from climbing real estate values. On every real estate transaction is a 2% fee paid to the Land Bank. The American conception of private property is not a natural fit for a land bank, a communal benefit from private assets. But real estate does not exist in a vacuum. Property value is a function of the nearby restaurants, landscapes, quality of library, etc. A virtuous cycle formed. These funds were well spent, on open space and public places.

• Public beaches: The community fights to maintain 350+ years of public beach access. Thousands if we include the native Wampanoags. This is a common thread, there is an erring on the side of public benefit. The culture of Nantucket is one of community over the individual. After all, we are all stuck out here together. Old timers tell stories of people run off the island. Decency matters when there is no anonymity. It’s one big neighborhood. It’s a place where people at least try to get along.

• Historical preservation: For a brief spell Nantucket was the whaling capital of the world. The island’s 19th century aesthetic is diligently maintained. The Historic District Commission reviews every real estate development down to the fence height, door color, and shrubbery. As a result we have a visual cohesion which is particularly rare in the U.S. The buildings look like they belong together which reduces visual tension.

• Village zoning: Nantucket has a surprisingly permissive zoning code. Many towns limit lots to one dwelling by-right, Nantucket allows three. This coupled with a low minimum lot size in the central island creates a vibrant and walkable core.

As much as I’d love less traffic, take the time to visit Nantucket. The world could learn a thing or two from its success.

Housing production is stuck in a Tragedy of the Commons. A Tragedy of the Commons occurs when misaligned incentives cause the loss of a public resource. Example: the overgrazing of the Boston Common by cattle herds in the 1600s. Like over-grazing shepherds, over-regulating towns act against the public’s interest to their own benefit. Town housing policy, chiefly zoning, is accountable to local voters who are disproportionately homeowners. Homeowners are incentivized to block new homes because it props up their home’s value and avoids neighborhood-character change. Homeowners are behind only 65+ year-old voters in a Boston University study analyzing overrepresented groups in local elections. Over sixty five year-old homeowners are 14% of registered voters but make up 27% of voters in off-cycle elections, when local elections typically occur. That is 2x overrepresentation of retirement-age homeowners in local elections.

Certain town, like those on Cape Cod & the islands, have a greater portion of older homeowners than the young renter-heavy cities included in the Boston University study. As such, it should come at no surprise that Cape Cod & islands have among the worst housing crises in Massachusetts.

Housing Hot Takes by Caleb Wursten

Nantucket Needs Workforce Housing

Nantucket’s median home price is $4 million. Suffice to say, it’s not an affordable place. In fact, the island is one of the least affordable places in the world. You might be thinking, “Well it’s Nantucket, a rich outlier. It’s not comparable to a regular town.” In truth, Nantucket is the canary in the coal mine of housing affordability, and for this r…

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2 years ago · Caleb Wursten

The current system is not working. The town–older homeowner–led housing production system is leading housing production on a one way street down. Without an electoral accountability change the housing crises will worsen. It is already showing signs of breaking with one in four young Bostonian’s planning to leave due to affordable housing. Communities without new generations cannot sustain themselves.

Fortunately, voters in state elections are more representative of the population. Relative to local elections, younger and renting voters turn out. For this reason states are the democratic (classical definition) choice to govern housing production. The federal government also has more a representative electorate than the local level, and should play a stronger role in housing production. Given state governments are more accountable to local needs, but don’t have the misrepresentation of towns, I tend to view them as the preferred housing policy authority.

In fact, states are starting to move. In January 2021, Massachusetts passed the MBTA Communities Act. This law requires towns to create multifamily-allowed zones within a half mile of MBTA (state public transportation) stops. These zones have a minimum density of fifteen dwellings per acre. This stands in stark contrast to low maximum densities, i.e. one dwelling per acre, in the standard town’s zoning code. Some town’s are freaking out, and others are embracing the moment. The state vs. town zoning fight escalated in February 2024 when Massachusetts’ attorney general sued the Town of Milton for MBTA Communities Act non-compliance. In parallel, Massachusetts Governor Maura Healey's proposed Affordable Homes Act makes further progress on zoning control by allowing accessory dwelling units (ADUs) across the state, regardless of what town zoning says.

The dust is yet to settle on who is the authority of zoning. But if we want to solve housing’s Tragedy of the Commons, it should be the state.

Nantucket’s median home price is $4 million. Suffice to say, it’s not an affordable place. In fact, the island is one of the least affordable places in the world. You might be thinking, “Well it’s Nantucket, a rich outlier. It’s not comparable to a regular town.” In truth, Nantucket is the canary in the coal mine of housing affordability, and for this reason it’s worth studying. It became a victim of its own success. As a Nantucket native I regularly see hard-working friends, and sometimes family, get pushed out of town. If your community can avoid the situation we found ourselves in, they should. Some challenges are already lurking in your local bylaws.

So what caused housing to become so incredibly unaffordable on Nantucket? A whole lot of things.

Over half of the land is in conservation, which both increases the appeal of buildable land and constricts its supply. An airport allows for half hour $150 round-trip flights from Boston and New York, among other wealthy metropolises. The island’s ambitious Chamber of Commerce rallies the community around such events as “Daffodil Weekend,” in April, and “Christmas Stroll,” elongating the shelf life of seasonal second homes. On top of all of this, a rich history, preserved by a Historic District Commission, creates a strong identity and sense of place. And, of course, it’s an island with finite land (barring land reclamation, a story for another day). There is a common thread here: a supply-demand imbalance. People love Nantucket and there is not a lot to go around.

For a long time, the island’s housing situation was tough, but manageable. Then came Airbnb. Airbnb allowed every homeowner to tap into the island’s tourism bonanza. While renting homes to tourists is an old practice, Airbnb injected it with steroids. Short term rentals, or STRs, used to require building a relationship with a local homeowner. The homeowner was trusting you with their home, after all. This can now be done between strangers with a click, facilitated by Airbnb’s insurance coverage and a public guest rating system. As a result, tourism that was previously kept to hotels in commercial districts spread to residential neighborhoods. Studies confirm a causal relationship between Airbnb and the housing crisis – see this, this, and this. Like a gold rush, the STR opportunity brought a dog pile of investors. They converted homes to STRs which is further exacerbating demand.

Airbnb can be a gift to struggling towns with surplus housing stock, but Nantucket is not one of them. Until housing–and specifically workforce housing–is unblocked by zoning, Airbnb remains an opponent to housing affordability.

Regulating or banning Airbnbs has been the island’s hottest political topic for years. When resources are limited, politics follows. Fast forward to today and a severe labor shortage threatens the island’s basic services. The school system, police and fire departments, home services, and other critical operations are struggling to find staff. A commissioned review of the Nantucket Fire Department reached a disturbing conclusion, “the grave reality is that the current levels of manpower are going to kill firefighters; if not sooner than later.”

So here we are, with $4 million houses and a depleted workforce. In the face of high demand, isn’t it obvious to, you know, increase supply?

Noahpinion

Market-rate housing will make your city cheaper

I remember a time back in 2017, when I was at a friend’s dinner party. He mentioned that one of the other guests was a housing activist, and that because I was also interested in housing issues, she and I should talk. The activist asked me what I thought we needed to do to ensure affordable housing in San Francisco, to whic…

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2 years ago · 382 likes · 225 comments · Noah Smith

Yes, but not just any supply will do. Excluding a 300-person village on Martha’s Vineyard, Nantucket is the fastest growing town in Massachusetts. The housing supply and population have already been rapidly growing since the 1980s. Yet we are in a housing crisis in 2024. The problem is new homes built on Nantucket become second homes. The supply and demand orthodoxy broke. Second homes require but do not provide labor. By simply increasing the volume of housing, Nantucket chases its tail. It is workforce housing that needs to be built.

Nantucket needs to expand the ratio of workers to tourists by promoting workforce housing.

While creating year-round homes has been a popular rallying cry on Nantucket, there’s nothing wrong with a seasonal workforce. Nantucket’s population booms 4x in the peak of summer. Does it make sense to have a fixed supply of workers with a hyper variable supply of tourists? When facing a challenge at this scale it’s important to row in the same direction. The longer a community goes without addressing this problem, the more daunting it gets. Nantucket, a town of 15,000, has allocated $84 million to affordable housing to date.

Achieving equilibrium does not need to cost taxpayers. Nantucket’s Covenant Program lets homeowners subdivide their lots beyond what is otherwise allowed. In exchange, each new lot is restricted to buyers making up to 150% of Nantucket’s median income -  $205,594 for a family of four. Owners must also spend ten months of the year in the unit. The program is a step in the right direction, but only creates about four workforce units a year. It also discriminates against high-earning residents. By instituting income maximums, those hopeful to find housing on Nantucket are incentivized to limit their work–or worse, forgo reporting income entirely.

Vail, Colorado created an elegant solution to their seasonal housing struggles. The municipality purchases deed restrictions that require occupants to work in the county thirty hours each week. That’s it. There is no appreciation cap discouraging participation nor income restrictions discouraging work. Vail, a town of 5,000, protected 40 units per year in its first four years. The average participating homeowner received $69,000 for the deed restriction. Combining a focused Vail-style deed restriction with Nantucket’s density benefit could create much needed workforce housing without tax outlays.

There are several more housing policy changes and programs needed to correct the course, a topic for coming weeks.

More workforce housing makes a balanced, easier Nantucket possible.