Nantucket’s Short-Term Rental War Is Pitting ‘Neighbor Against Neighbor’

The jovial atmosphere belied the tensions surrounding one of the items on the agenda: Article 90, a proposal to significantly reduce the number and duration of short-term rentals on the island.

Debate over the proposal quickly turned tense. Article 90 sponsor Tobias Glidden, a 33-year-old full-time resident whose family has owned Glidden’s Island Seafood since 1898, gave an emotional speech defending the proposed bylaw. He said investors who own short-term rentals “are extracting money from the island like they’re extracting squid from our local waters.”

Another year-round resident, Linda Williams, called Article 90 “abhorrent,” saying her 82-year-old uncle depends on income from short-term rentals to maintain the family’s longtime seasonal house on the island. “We may lose my family’s summer home,” she said.

On the sidelines, unable to vote because neither is a full-time resident, were two men whose power and wealth helped fuel the battle over the proposal, which has created a painful community rift.

In one metaphorical corner was Peter McCausland, 71, founder of the industrial gas distributor Airgas, and a longtime Nantucket summer resident whose cliff-top compound is assessed at roughly $18 million. He created and bankrolled ACK Now, the group behind Article 90, arguing that short-term rentals lead to congestion and noise and price out year-round residents.

In the other was Norman Levenson, 77, also a longtime Nantucket summer resident, whose Nantucket home—including a roughly 5,000-square-foot, four-bedroom main house and a one-bedroom guesthouse—is assessed at about $5 million. His company, the Copley Group, owns 13 short-term-rental properties on the island. He founded the Alliance to Protect Nantucket’s Economy, which has received funding from the Copley Group. Many local business owners have sided with Mr. Levenson’s group and Nantucket Together, another group that opposed Article 90. Mr. Levenson and his allies argued that restricting short-term rentals would devastate the island’s tourism-dependent economy and, despite ACK Now’s claims, would worsen the island’s severe shortage of affordable housing.

The dispute inflamed long-simmering tensions among local residents over affordability, overcrowding, and access to the island, where nearly half the land is conserved and its astronomical home prices are climbing.

“This is the hottest topic on the island in I can’t even tell you how many years,” said Mr. Levenson.

Since neither Mr. McCausland nor Mr. Levenson—nor roughly 80% of the island’s homeowners—can vote on Nantucket, they each embarked on an aggressive campaign to gain support from year-rounders. Starting this fall, the battle was waged with letters and advertisements in the local newspaper, phone call campaigns, lawn signs and social media. Mr. Levenson’s group declined to comment on how much Copley Group contributed to the effort. Mr. McCausland declined to say how much he contributed to ACK Now.

“I recognize that I can’t tell the people of Nantucket what to do,” said Mr. McCausland. “But my goal in forming this organization was to give them something to think about.”

Some Nantucketers didn’t appreciate the intervention. Ms. Williams called ACK Now’s focus on affordable housing “a smokescreen.” At the meeting, she accused Mr. McCausland of elitism. “They don’t want the people…that are not his kind of people.”

Rebecca Chapa, a year-round resident who says she couldn’t afford her Nantucket home without income from

Airbnb,

added, “I think it’s so fascinating that someone who doesn’t live here year-round, who only uses their house for a few months in the summer, could decide what the year-round people should be doing with their homes.” She said she was also alarmed by the discord the proposal sowed in the community. “What was discouraging to me was we’re really dividing up our island more than we’re in it together.”

Each side blames the other for the rancor. Mr. Levenson said he is upset by the divisive tone. “It was neighbor against neighbor,” he said, accusing Mr. McCausland of trying to impose his will on Nantucket without determining what islanders want.

Mr. McCausland responded by saying “Levenson and other nonresident STR investors, if left to their own devices, will turn Nantucket into an islandwide, short-stay Disneyland. I am against that.”

“Their strategy early on was to divide up the community,” said Mr. Glidden, ACK Now’s chairman, about the island’s real-estate investors. “I’ve seen a lot of really negative rhetoric put at me.”

On its face, Nantucket’s fight over short-term rentals is similar to disputes that have taken place in cities and towns across the country. But the battle is especially high stakes on this tiny island, where tourism is the lifeblood of the economy. Some residents said the short-term rental restrictions would have imperiled their livelihoods or forced them to move off island.

As Nantucket’s popularity as a second-home destination has grown, home prices on Nantucket have exploded. The median sale price of a Nantucket home skyrocketed 95% to $2.5 million in 2020 from $1.3 million in 2010, according to the real-estate brokerage Hunter, Reed and Company. Year-round residents, such as teachers and tradespeople, have found it increasingly difficult to find even modest homes to purchase or rent, said Mr. Glidden.

“Eight years ago, you could buy a house for $600,000 or $700,000,” he said. Now, “you can’t find anything for under $1.2 million. It’s forcing a lot of great people in our community to be like, ‘hey, I’m moving off the island.’ ”

Mr. McCausland believes the solution lies in restricting short-term rentals. A homeowner on island since 1979, Mr. McCausland is retired after netting almost $1 billion from the 2016 sale of Airgas. He and his wife, Bonnie, split their time between Florida, Nantucket and Pennsylvania. In recent summers, he said, he has been troubled by Nantucket’s increasing traffic, crowding, lack of affordability, and “this unbridled growth that’s going on and destroying the place.”

In 2019, Mr. McCausland founded ACK Now. The group decided to focus first on short-term rentals, which are stays less than 30 days. In Mr. McCausland’s view, off-island investors buying Nantucket homes for short-term rentals are worsening the island’s affordability crisis. Meanwhile, he said, weekend renters are partying and disrupting residential neighborhoods with noise and adding to traffic and crowding.

For Mr. Glidden, the issue of short-term rentals hit home. He said there are three short-term rentals behind his family’s 2.5-acre property near the airport on Rugged Road, a wooded parcel with chickens that his parents purchased for $44,000 in 1984 and that is now assessed at $1.4 million. There are 16 short-term rentals in the Beach Plum Village housing development down the street. “I grew up playing in the mud puddles on Rugged Road,” he said. “Now it’s paved, and you don’t know who’s at the house next door from week to week. There’s drunken people having parties every weekend.”

In November 2020, ACK Now submitted Article 90, which proposed a seven-day minimum stay for most short-term rentals, a 90-day cap on total annual short-term rental days for full-time residents, and a 45-day cap for other owners.

An uproar ensued. Local businesspeople said Article 90 would drastically reduce their customer base, especially in the shoulder seasons of fall and spring. Ms. Chapa, 49, said limiting short-term rentals would hurt business at her restaurant, the Hungry Minnow, a seasonal snack bar on Children’s Beach. She said that she and her husband purchased their house for $480,000 in 2011 with the intent of renting it out to help pay the mortgage.

The four-bedroom home, which measures about 1,600 square feet, is now assessed at $785,200. If short-term rentals were restricted, they would have to consider selling and moving off island. “It’s really scary,” she said. “I don’t want to think about it.”

Most of her guests stay for only a few days at a time; many can’t afford to stay longer. Renting for less than a week “opens it up to people who maybe have less of a budget but still enjoy the island,” she said. “I think it’s almost discriminatory to say you have to stay the week.” On an island where hotel rooms are exorbitantly expensive, she added, limiting short-term rentals “changes the demographic of who can visit Nantucket, basically.”

Bowing to complaints, ACK Now amended Article 90 at the Town Meeting, lifting most of the limits on year-round residents who rent out their homes.

Mr. Levenson said that even with the change, the reduction in tourists “would devastate this island.” He has been vacationing on Nantucket for more than 50 years and spends every summer at his home there.

Around 2008, he started buying Nantucket properties, he said. He planned to flip the houses but decided to rent them out instead. They rent for up to $31,000 a week in peak season.

He said it is unfair to blame the party houses on short-term rentals. “They’re saying it’s only short-term rental people that do things like that,” he said. “I find that really hard to believe.”

A report by the Donahue Institute, a consulting, research and policy organization at UMass Amherst, estimated that Nantucket can expect $8 million to $9 million annually from short-term rental taxes. The study was commissioned and paid for by Mr. Levenson’s group. In a full-page advertisement in the local newspaper, ACK Now called the study “pure hogwash.”

“The local businesses don’t need this short-term rental business in order to survive,” said Mr. McCausland. “I can’t even get into a restaurant on Nantucket. They’re all booked up weeks in advance.”

Impassioned arguments like these raged under the white tents on Saturday before the vote was taken. In the end, the nays won, 625 to 297, and Article 90 was defeated. The battle over Nantucket’s short-term rentals, however, isn’t over.

Mr. Glidden attributed the loss to “the real-estate lobby,” but said many of Nantucket’s articles take years to pass. “This is just an opportunity to come back next year.”

His opposition isn’t backing down either. “None of us can be complacent,” said Ms. Chapa.

Mr. Levenson said he hoped ACK Now would give up their crusade. “It’s a small island,” he said. “Why do they want to fight?”

But to Mr. McCausland, the battle has just gotten started.

“This issue isn’t going away,” said Mr. McCausland. “And we’re not going away.”

Write to Candace Taylor at Candace.Taylor@wsj.com