Cape Cod has long been a jewel of New England — a place where wealthy vacationers flock for sandy beaches, summer mansions, and a slower pace of life. But behind the postcard-perfect image is a deepening crisis for year-round residents who increasingly find themselves priced out of the very communities they’ve called home for generations. Now, local officials are weighing a controversial solution: a new tax on luxury real estate sales to fund affordable housing.
The Barnstable County Assembly of Delegates is considering a 2% real estate transfer fee on home sales above $2 million. Supporters believe this targeted tax could generate as much as $56 million annually, funneling much-needed resources into affordable housing projects across the Cape. For local leaders, the proposal is a direct response to an escalating affordability problem that has left many middle-class families struggling to stay.
“Cape Cod is in the midst of a housing crisis that threatens the fabric of our communities,” said Deputy Speaker Daniel Gessen in a statement. “This legislative timeline is the scaffolding for the assembly to begin confronting the depth of this crisis and moving toward solutions that match the scale of the challenge.”
The Wealth Gap Beneath the Surface
Barnstable County, where Cape Cod is located, is often perceived as an affluent enclave. But beneath the image of seaside estates and vacation retreats lies a widening gap between wealthy second-home owners and working families. The median household income in the county stands at $89,893, only slightly above the national median of $77,719, according to the U.S. Census.
Meanwhile, the cost of housing tells a very different story. As of July, the median home sale price in Barnstable County was $730,000, far higher than the national median of $442,992, according to Redfin. In especially high-demand towns like Chatham, on the Cape’s southeastern tip, the median price soared to $1.14 million.
As Gessen put it: “A family today must earn more than double the average income just to afford the price of an average home. That’s not just unsustainable. That is a crisis.”
A Plan With Growing Support
The proposed tax has garnered notable support from local leaders, housing advocates, and even the Cape Cod Chamber of Commerce. Chamber CEO Paul Niedzwiecki noted that the housing squeeze is already reshaping the region’s workforce, with “nearly 30% of the region’s workforce now commuting to the Cape each day.” Without bold measures, he warned, the Cape could lose its middle-class core and risk becoming a seasonal community that functions only for tourists.
Real estate agent and lifelong Cape resident Alfred Schofield has seen firsthand how the proposal is rattling wealthier homeowners. “I’ve been getting some calls from anxious sellers,” he told Local press. Some are trying to rush sales before the law takes effect, while others are holding onto properties longer, waiting to see how the market reacts.
Schofield predicted that many sellers would attempt to offset the tax by raising asking prices, potentially putting more pressure on buyers. “There certainly will be people who try to bake those costs into the retail price of their home,” he said. “I could certainly see a scenario where home prices rise as a result of the tax.”
Lessons From Rhode Island’s “Taylor Swift Tax”
Cape Cod wouldn’t be the first wealthy coastal community to tax the rich in order to address housing challenges. In Rhode Island, lawmakers introduced what became known as the “Taylor Swift Tax”, named after the pop star who bought a $17.75 million home in the state in 2013. That tax applies to second homes valued over $1 million, charging $2.50 for every $500 in assessed value. Today, property records show Swift’s seaside estate is assessed at about $28.3 million, meaning her tax bill is hefty.
Barnstable County’s proposal differs in that it doesn’t explicitly target second-home owners, but the impact would likely fall heavily on them. According to a 2022 housing needs assessment by Boston-based planning firm JM Goldson LLC, 33% of homes in Barnstable are second homes. For local officials, the priority is to ensure that year-round residents — teachers, nurses, service workers, and families — can continue to afford living in the community, even as seasonal buyers drive up demand.
Preserving the Cape’s Character
Still, the plan isn’t without risks. Schofield cautioned that Cape Cod’s economy depends heavily on part-time residents and visitors. The hope is that the tax won’t scare potential homeowners away or disrupt the mix of seasonal and year-round residents that gives the Cape its unique character.
“As someone who’s lived here year-round my whole life, I certainly hope it doesn’t dissuade people from living here year-round,” Schofield said. “I think part of what makes the Cape fabric so special is that it’s a mix of seasonal residents as well as those year-round residents.”
Ultimately, the debate reflects a broader challenge facing resort towns and desirable coastal communities across the United States. How do you maintain the vibrancy and diversity of a year-round community when housing prices soar beyond the reach of the middle class? For Cape Cod, the answer may lie in asking the wealthiest homeowners to help fund a future that is more inclusive — and sustainable — for everyone.
