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The Oak Bluffs concept — a proposal

I propose that the GBAHTF explore the possibility of creating “cottage” developments on town lots, purchased or otherwise acquired by the GBAHTF. The Trust would own the property and make it available (long-term lease or similar arrangement) to income-qualified, potential homeowners.

Depending on zoning, 3 to 8 units could be put on a single lot (by right). All the units would be built at the same time, to save on construction costs and create a cohesive look. The cohesive look I have in mind would be based on the Cottages in the Oak Bluffs Campground, but that is just one option.

All units would need to be under contract before construction begins. The homeowners will be able to purchase the houses at an affordable price, using a standard bank loan (a construction loan that converts to a mortgage when construction is complete).


A permanent deed restriction would be placed on the houses, linking the resale price to the AMI. (If the AMI goes up 5% the house resale price can go up by 5%). The goal is to keep the house permanently affordable. The town will use the deed-restricted price for the real estate tax assessment. The land would not be taxed because it is owned by the AHTF (the town, essentially).

Even with this deed restriction, this is a path to wealth building for the homeowner, because they will be building equity every month. There is also the tax benefit of home ownership, which will make the housing even more affordable.

All of the units will be built by one contractor, but each unit will be paid for by the homeowner. While there should be a cohesive look to the entire development, homeowners will be able to choose from several basic designs and make modifications to suit their personal aesthetics and budgets.

Cost breakdown

The homes will be mostly between 600 and 900 sq. ft. The size of the building and/or down payment assistance can be adjusted to fit individual budgets. I’ve used 750 sq. ft. in this example.

The land is owned by the AHTF/Town

750 square foot house X $300 per square foot to build = $225,000

Down payment $15,000 (from AHTF)

Loan amount = $210,000

30 year fixed rate mortgage @ 7.25% = $1,433/month

Taxes, insurance, etc. (building only) = $536/month

Total monthly expenses = $1,969

Two person AMI = $81,200 ÷ 12 = $6,766 x 30% = $2,030

Income qualification guidelines and hourly wage comparison

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