The housing market on Cape Cod and in other seasonal communities like the Berkshires and the Islands has undergone a dramatic transformation in recent years. Once a destination where year-round residents and seasonal homeowners coexisted in a delicate balance, these areas are now facing a crisis of housing availability.
At the heart of this issue is the rise of short-term rentals, the influx of affluent second-home buyers, and a dwindling supply of properties available for long-term residents. The COVID-19 pandemic further accelerated this trend, with remote work allowing high-net-worth individuals to invest in vacation homes, often leaving them vacant for much of the year.
As a result, local businesses struggle to retain workers, school enrollments decline, and entire neighborhoods become eerily quiet in the off-season. With new legislative efforts emerging to address the issue, the question remains: Can Cape Cod and other seasonal communities find a way to maintain their unique character while also ensuring a sustainable future for year-round residents?
A Housing Crisis Driven by Wealthy Buyers and Short-Term Rentals
For decades, seasonal homeownership was a fixture of life in places like Cape Cod. Homeowners would often rent out their properties during the peak summer months, using the income to cover expenses and keep communities vibrant year-round. In some cases, properties were rented on a nine-month basis, ensuring that local workers, teachers, and young families could afford to live in these towns outside of the summer surge.
However, the rise of platforms like Airbnb and VRBO changed the game. Today, short-term rentals often generate significantly higher revenue than traditional long-term leases. Many property owners have shifted their focus toward maximizing income in peak season rather than supporting local housing needs.
According to the Massachusetts Housing Needs Assessment, approximately 110,000 housing units in the state remain vacant at any given time due to seasonal or part-time use. This represents nearly 4% of the state's entire housing stock. On Cape Cod alone, 36% of all homes are used for seasonal or short-term rentals—a percentage that climbs even higher on Nantucket and Martha’s Vineyard, where nearly 60% of homes are held as seasonal residences. (Source: Massachusetts Housing Needs Assessment, 2024).
The impact?
- Fewer homes are available for year-round rental or purchase by local families.
- Many workers and families are priced out of the market, leading to declining school enrollments and labor shortages.
- Essential workers, including teachers, nurses, and public service employees, struggle to find housing near their jobs.
- Entire neighborhoods become seasonally vacant, leading to a loss of community character.
The Impact of COVID-19 and Remote Work on Cape Cod’s Housing Market
The pandemic ushered in a new wave of homebuyers who could now work remotely and sought refuge from urban centers. Affluent individuals from Boston, New York, and beyond snapped up properties on Cape Cod, in the Berkshires, and in coastal communities across Massachusetts.
Unlike previous generations of buyers who often rented their properties in the off-season, many of these new homeowners have no financial need to rent out their homes at all. Instead, they prefer to keep them vacant for their personal use, even if that means the home sits unoccupied for much of the year.
State Senator Julian Cyr, who represents the Cape and Islands, described the situation as an existential crisis for many small towns. In Truro, where he grew up, the year-round population has dwindled to less than 2,000 residents. He notes that while rising sea levels and climate change pose long-term threats to these communities, the housing crisis is an immediate and far more pressing issue (Source: Massachusetts Legislature, 2025).
Legislative Efforts to Address the Housing Shortage
Recognizing the growing strain on seasonal communities, Governor Maura Healey introduced a statewide housing bond bill aimed at tackling housing affordability across Massachusetts. Key provisions include:
- A "Seasonal Communities" Designation – This new category formally recognizes towns with high seasonal vacancy rates (35%+ in Barnstable County, 40%+ in Berkshire County) and allows them to access targeted policy support.
- Housing Subsidy and Deed Restriction Programs – Towns will have greater flexibility to require that certain homes be rented year-round rather than converted into seasonal or short-term rentals.
- Municipal Housing Incentives – Local governments will be able to adopt creative solutions, such as tiny home developments, accessory dwelling units (ADUs), and increased tax exemptions for full-time residents (Source: "A Home for Everyone: Massachusetts Housing Plan, 2025").
Despite these efforts, some housing advocates argue that more aggressive action is needed. Proposals for real estate transfer fees on high-end home sales—which would funnel money into workforce housing programs—have been met with mixed reactions. While supporters believe these fees could generate much-needed funding for local housing initiatives, critics argue they would disproportionately benefit affluent communities that already have expensive housing stock.
A Changing Landscape: What’s Next for Cape Cod?
While the housing crisis on Cape Cod is complex, there are potential solutions that could help ease the pressure:
- Expanding Workforce Housing – More communities could follow the lead of organizations like the Housing Assistance Corporation, which develops affordable housing units and supports year-round residents.
- Incentivizing Year-Round Rentals – Tax incentives or financial subsidies could encourage homeowners to rent to long-term tenants instead of short-term vacationers.
- Zoning Reform – Allowing more multi-family housing and ADUs could create additional year-round housing opportunities without fundamentally altering the Cape’s charm.
- Balancing Tourism and Housing Needs – Seasonal homeownership will always be a part of life on Cape Cod. However, a more balanced approach—one that ensures the region remains accessible to families, workers, and retirees—will be key to preserving its long-term vitality.
Final Thoughts
The housing crunch on Cape Cod and in other seasonal communities is not just a local issue—it’s a statewide challenge. With 110,000 homes sitting vacant for much of the year and only 1.6% of housing stock available for sale or rent, the need for creative solutions has never been greater.
For those considering buying a home on Cape Cod—whether as a primary residence or a vacation property—it’s crucial to understand these dynamics. If you’re looking to purchase property or explore investment opportunities, working with a knowledgeable real estate team can help you navigate these shifting market conditions while making informed, strategic decisions.
At Guthrie Schofield Group, we specialize in luxury and waterfront properties, helping clients find the perfect balance between lifestyle, investment, and long-term value. If you're thinking about buying, selling, or investing in Cape Cod real estate, contact us today to learn more about how we can help you achieve your goals.
Sources:
- Massachusetts Housing Needs Assessment, 2024
- A Home for Everyone: Massachusetts Housing Plan, 2025
- Massachusetts Legislature Reports, 2025
