Socio-economic implications of second home communities

There are just six counties in the nation with a year-round population of over 200,000 and over 20% of the housing stock as seasonal homes. Barnstable County is the smallest among this special group with land area of just 394 square miles, but has the highest concentration of seasonal homes per square mile (149 units/sq. mile). Lee County, Fla. is a distant second at 101 seasonal units per square mile.

Barnstable County also has the highest share of housing stock as seasonal (36.5%) among the group and is home to 50% of all seasonal units in the state of Massachusetts. What do these special characteristics mean for the Cape’s economy?

There is a range of interconnected effects, including relevant population for planning purposes, seasonality in jobs, availability of year-round rental housing, wages, labor pool, property taxes and home values. These also underscore the importance and interconnectedness of the environment and economy on the Cape.

Population

When we consider the relevant population for infrastructure investment and other planning areas, only the year-round population of 215,000 is considered. If we consider the fulltime equivalent residency of seasonal homeowners, the relevant population increases to 285,000. Including tourists, we estimate there are more than 7 million visitors and residents on the Cape during a given summer season.

Property Taxes

Seasonal homeowners contribute to the property tax pool like year-round residents, but tend to use a town’s infrastructure only seasonally. While home values are determined by a number of factors, communities with higher shares of seasonal homes also have higher median single-family home values (61% correlation). This is not say that seasonal homes exclusively increase home values, but are an important part of the picture.

Year-round rental housing and labor market

A significant share of seasonal homes in a community affects the availability of rental housing. In all Classmate counties, rental homes are a smaller share of the housing market than the national average. Seasonal homes are rented out in ways not captured by Census classifications. On the Cape, 25% of seasonal units are rented out for periods of less than a year and 5% of seasonal units are exclusively used as rentals. Unlike regular units, seasonal rentals offer short-term leases, typically during the summer. While conducive for tourists, such terms are not suitable for the year-round population that relies on rental housing.

Economy, Environment and labor pool on the Cape

Barnstable County has the lowest rank for both school age (5-17) and young adult (25-44) populations and has the oldest population of the six Classmate counties. These year-round population characteristics says that we are more of a retirement destination than a place for young families. This reflects in the county’s economy, with health care and social assistance as the largest private sector, employing 13.2% of the labor force.

However, we expect that seasonal demand in the health care, accommodation and food services and retail sectors are primarily driven by seasonal residents and visitors. These combine to make the destination economy the largest sector on the Cape. Survey results over the past 15 years consistently find that a clean, natural environment is the single most important reason that Cape Cod is a destination, tying the environment and economy together.



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Data sources: Cape Cod Commission 2008 Second Home Owner Survey, 2013 5-year American Community Survey, 2010 US Census, MassDOT, MassDOR, Cape Cod Commission Regional Policy Plan Surveys