Land Use and the Future Of Plymouth

What is a Land Bank?

In general, Land banks are a mechanism for acquiring, holding, and distributing property in service of community goals. Land banks can be government supported, quasi-governmental or independent non-profit organizations.

Why would we want to create a Land Bank?

Plymouth wants to manage its natural resources and control new residential development. However, given the continued desirability of Plymouth, the Town has very limited ability to do so. Plymouth already has some of the most restrictive residential zoning in the entire Commonwealth, and still new subdivisions are being built. That is because Plymouth can’t prevent developers from building what is allowed by existing residential zoning. Moreover, our commercially zoned land is being converted to apartments though an “affordable” housing loophole in State law (Chapter 40B) which allows developers to completely ignore Town zoning laws. So the only way for Plymouth to prevent land from being developed is to own it.

Some residents may ask “Isn’t that being done by the Community Preservation Committee?” The short answer is not enough. The CPC get funds from residential taxes, and uses them for defined purposes; historical preservation, affordable housing, recreational facilities, and creation of conservation land. Given the increasing value of property in Plymouth and the need to utilize tax dollars for municipal services, the CPC does not have adequate funds to purchase the open space which the Town wants to preserve while supporting truly affordable housing which Plymouth desperately needs for working young professionals, families, and seniors seeking to age in place in our community.

Are there any Land Banks in Massachusetts?

Three Land Banks have been approved in Massachusetts:

     Nantucket 

The Nantucket Land Bank was authorized by a special act of the Legislature in 1983. (Acts of 1983 Chapter 669, Massachusetts Legislature). Land acquisition was to be funded by a 2% real estate transfer fee to be paid by the buyer in most transactions, with a permitted deductible for first-time home buyers. It had been recommended by Nantucket Town Meeting in April 1983 by a vote of 446 to 1. Following legislative authorization, the Land Bank was approved at a special town meeting in January 1984 by a vote of 293 to 12. To date, there has been no serious effort to either reduce the transfer fee or to close the land bank. As of today, nearly half of the land on Nantucket Island is preserved as open space.

     Martha’s Vineyard 

The Martha’s Vineyard Land Bank was authorized by a special act of the Legislature in 1985. (Acts of 1985 Chapter 736, Massachusetts Legislature). The authorization was very similar to that granted to Nantucket two years earlier. There would be a 2% real estate transfer fee with a permitted deductible for first-time home buyers. The Land Bank was approved by voters in all six of the Martha’s Vineyard towns in 1986. To date there has been no effort by any of the six towns to withdraw from the Land Bank. To date the Land Bank Commission has acquired approximately 3100 acres, which is about 5% of the land on Martha’s Vineyard. 

     Cape Cod 

The Cape Cod Land Bank was authorized by a special act of the legislature in 1998. (Acts of 1998 Chapter 293, Massachusetts Legislature). Unlike Nantucket and the Vineyard, the funding was through a 3% surcharge on property tax bills, and the state was to provide matching funds of up to 50% of the amount raised through the surtax. (Section 10 of Chapter 293 of Acts of 1998). 

The individual towns on the Cape were given the right to decide whether to be members or not, and in November 1998, all 15 towns on the Cape voted to become members of the Land Bank. This changed after the adoption of the Community Preservation Act, passed by the Massachusetts Legislature in 2000. In 2004, via a budget amendment, the state discontinued matching funds for the existing Cape Land Bank, but allowed municipalities on the Cape to opt out of the Land Bank in favor of accepting the Community Preservation Act. By 2005 all 15 had done so.

How would a Plymouth Land Bank be different?

Unlike these other land banks, Plymouth's proposal is not limited to just open space preservation.  In addition, the Land Bank would be sed to fund purchases of interest in land relating to affordable housing and future municipal needs.  This would make the Plymouth Land Bank the only one in the country to focus on the diverse needs of all of its residents, and would serve as a model for future proposals.  There are several reasons Plymouth has chosen this approach:

First, Plymouth has more than just open space needs, and inadequate funds to meet those needs without putting a further strain on residential taxpayers.  The Land Bank proposal would allow for funding of these critical needs without imposing even more taxes and forcing residents out of the community. 

Second, Plymouth is the fastest growing community in Massachusetts.  This has exacerbated the need to expand municipal infrastructure.  At the same time, the rising housing costs created by this influx has resulted in an increasing affordability problem.  The Land Bank proposal would allow Plymouth to work with public and private entities to address municipal needs while supporting housing for those being priced out of Plymouth. 

Third, the State House and Governor's Office have made clear that their priority is the creation of more housing.  That is why other land bank proposals providing only for purchase of open space have not even been entertained by the state legislature.  This Land Bank proposal actually promotes the development of the types of housing that work for Plymouth.

Fourth, Plymouth is proposing an appointed Land Bank Commission with members representing all of the Land Bank missions, thus ensuring that the Land Bank will not focus on just one particular aspect of its role while still maintaining the flexibility to respond to opportunities that benefit Plymouth residents.

How would a Plymouth Land Bank be funded?

As Plymouth already participates in the Community Preservation Act, and given our current dependence on residential real estate taxes for almost all municipal funding, a tax based Land Bank is not presently under consideration. Instead, Plymouth would likely propose a real estate transfer fee (typically paid by the buyer) as the source of funding.

Wouldn’t a real estate transfer fee make housing more expensive?

That has actually never been established. In fact, it is an open question as to whether a real-estate transfer fee funded Land Bank would reduce or enhance property values. 

Those opposing such fees argue that any added cost to buying a property reduces demand, thereby reducing prices. But if the proceeds of that fee are used to make the community more attractive, then this would increase demand which would tend to increase prices. Moreover, if the land bank is successful in deterring development, that would reduce supply, and thereby increase prices. 

The Town of Brookline did a study in 2019 to determine what the potential effect of such fees would be on real estate prices but ultimately could not reach a determination. The principal problem is that the only examples are Nantucket and Martha’s Vineyard, which do not follow general real estate trends. As such, the imposition of a transfer fee had no noticeable impact on values.

What about the impact on those seeking to buy lower and moderate priced housing?

One of the benefits of a Land Bank is that the Town can set whatever restrictions and limitations it likes on the fees it wants to impose. Both Martha’s Vineyard and Nantucket established exemptions for first time homebuyers. Plymouth could do the same, as well as make other concessions (such as restricting the fee on properties under a certain dollar amount or those for people who have disabilities).

How would a Land Bank obtain property?

A Land Bank can obtain land through a number of different mechanisms: tax foreclosures, municipal government transfers, donations, or open-market purchases. Typically, a committee is created which looks for parcels the Town wants to obtain and uses Land Bank funds to purchase the property when necessary. The Town could put further restrictions on the use of such funds, such as requiring approval by another body for transactions over a certain amount. 

What can land purchased by a Land Bank be used for?

Because each town creates its own terms for a Land Bank, there is no automatic restriction on the use of the property other than it needs to serve a community purpose (as opposed to a commercial one). In Massachusetts, the Land Banks approved have been to purchase land to preserve it as open space (conservation and recreation). That is consistent with Plymouth’s goals of purchasing land to preserve open space, allow for recreational development, and permit certain limited municipal uses (such as wells). 

How would Plymouth create a Land Bank?

The first step would be for the Town to establish all of the terms for funding and operation of a Land Bank, and get approval from Town Meeting. The Town would then need to submit a bill to the State legislature approving the Land Bank. So it is important to note that even if the Town approves a Land Bank there is no guarantee that one will be allowed by the State.

Legislators from the Cape first filed a bill to create a Land Bank on Cape Cod in 1987. The legislation was very similar to that approved for Nantucket and Martha’s Vineyard. However, there was significant opposition to that proposal. The argument was that the islands were unique in being geographically isolated, which was why real estate transfer fee based land banks were approved. But it was also claimed that there was also an “understanding” between the state legislature and the real estate lobby that real estate transfer fees would not go beyond these two cases. The transfer fee based land bank bill for Cape Cod died in the House by a vote of 70 to 76. Efforts to revive it in 1989 were also unsuccessful. Only after dropping the fee component was the bill allowed to proceed.

Wouldn’t Plymouth face the same arguments as the Cape?

Possibly, but Plymouth is different, and much has changed in the interceding 2+ decades.

First, Plymouth has an actual need to preserve rural land from development due to its reliance on a sole source aquifer. Continued development of residential properties which rely on wells and septic systems presents a threat to Plymouth’s water supply similar to that now being experienced on the Cape and South Coast.

Second, Plymouth is experiencing the same type of atypical residential real estate growth as Nantucket and Martha’s Vineyard consisting almost exclusively of higher-priced homes and units, meaning a transfer fee paid by the buyer would not be penal or exclusionary in nature.