2008 Survey of Cape Cod Second Homeowners Overview of Findings May 19, 2009

2 Background Cape Cod Commission contracted the UMass Donahue Institute to survey second home owners on Cape Cod concerning potential impact of conversion of second homes to primary residences Funding provided by The Cape Cod Commission with support from Barnstable County, the Cape Cod Economic Development Council, and the Cape Cod Chamber of Commerce Survey was analyzed for the Cape as a whole and for each sub-region (Upper-, Mid-, Lower-, Outer-Cape)

3 Overview of Presentation Research Questions Methodology Response Rate Respondent/Second Home Profile Current Use of Second Homes Conversions of Second Homes Economic Impact

4 Research Questions 1.How are second homes currently used? 2.Will a significant number of second homes be converted into full time residences in the next 5 years? The next 15 years? 3.Will the rate of conversions differ among the four sub-regions?

5 Research Questions (Cont’d) 4.Does the conversion of a seasonal home significantly impact the level of usage or just spread it out over the full year? 5.How will changes in use patterns impact local spending patterns and the regional economy? 6.How will changes in use patterns impact demand for public and human services and infrastructure?

6 Methodology Instrument –Scan-ready “paper and pencil” mailed questionnaire –Questionnaire developed collaboratively by the UMass Donahue Institute and the Cape Cod Commission –Survey piloted with a small number of second homeowners –Pilot resulted in only minor changes

7 Methodology (Cont’d) Sample –Survey frame created using the list of homeowners that pay the personal property tax –Some primary homeowners pay personal property tax, but small enough number that it should not impact results –49,563 second homeowners identified –Second homes owned by foreigners screened out of sample for logistical reasons

8 Methodology (Cont’d) Sample –Goal of 400 completed responses per region in order to get statistically valid results –A 10% response rate was estimated before the survey was mailed –In order to obtain 1,600 completed surveys (400 per region of the Cape), 16,000 second homeowners were randomly selected to receive the survey

9 Response Rate 4,944 second homeowners completed and returned the survey for a response rate of 30.9% Margin of error of no more than 5% was the goal Actual margin of error is 1.3%

10 Respondent Profile 71% of Cape Cod second homeowners have their primary residence in New England; including 58% who live in Massachusetts 8% have a permanent residence in Barnstable county The median age of respondents is 60 79% have a bachelors degree or higher, including 48% that have a graduate degree 58% of respondents have a pre-tax household income between $100,000 and $500,000

11 Respondent Profile (Cont’d) The typical second home family has two adults and no children 12% of respondents inherited or were gifted their second home 15% purchased land and built their second home 1% inherited land and built their second home 72% purchased an existing home Second homeowners have owned their home for an average of 19 years

12 Profile of Second Homes 81% of second homes are single family homes 11.5% are condos, the second largest group 45% of second homes have three bedrooms Median capacity of second homes is 6 people Median lot size- ½ an acre

13 Current Use of Second Homes 95% of second homeowners make personal use of their second homes for some portion of the year; including 74% that ONLY make personal use of it 26% of second homeowners rent their home for at least a portion of the year

14 Current Use of Second Homes (Cont’d) Second homes are used most in the summer; however 18% of respondents did not report using their second home during the summer months Second homes are also used more intensely during the summer months: on average in July and August second homes are used by 4.5 people for an average of 24 days per month

15 Planned Conversions of Second Homes Percent of Second Homes That May Be Converted to Primary Homes Time Frame Upper Cape Mid Cape Lower Cape Outer Cape Total 1-5 Years7.8%8.5%9.0%6.2%7.9% 6-15 years 12.0%13.1%16.3%14.0% Overall19.7%21.3%24.8%20.1%21.5%

16 Planned Conversions of Second homes (Cont.) In addition to those homeowners planning to convert their homes in the next 15 years –12% of respondents expect to sell their homes –10% plan to hand it down to a friend or family member –16% don’t know what they will do with their second home 37% of homes in total have an uncertain status in the next 15 years

17 Impact on Intensity of Use 80% of converters expect to increase the use of their second home after converting Only 26% of homeowners not converting their home expect to increase their use of their second home On average, after converting second homes there will be 2 people living in the home for 11 months of the year

18 Economic Impact Economic Impact of second home conversions is measured in several ways; these include impacts on: –Employment on the Cape –The use of local services –Short-term rental space –Local infrastructure needs

19 Employment Plans 42% of homeowners moving to the Cape plan to work after moving 83% of those planning to work have a bachelors degree or higher 43% of survey respondents did not answer this question

20 Local Services Overview Second home owners planning to move to the Cape already use local services to a high degree In general, homeowners intend to shop or use local services more after moving to the Cape Local services possibly impacted include: –Cultural Activities –Shopping –Use of Private Services

21 Cultural Activities Cultural Venues should gain from the conversions of second-homes to primary homes 73% of converters attend music venues occasionally or frequently After moving to the Cape 94% of converters expect to attend music venues occasionally or frequently

22 Shopping Second homeowners indicate that they currently purchase a majority of the products they use on the Cape from on-Cape vendors After converting their second home to their primary residence, an even higher percentage of homeowners expect to purchase products locally

23 Shopping

24 Private Services Private services that are geographically based have very high usage that will go up slightly –Trash collecting: 94%→97% –Snow Plowing: 95%→99% –Landscaping: 99%→99% Services that are not geographically based have much lower current usage but will see much higher increases after conversion –Banking: 59%→92% –Insurance: 50%→64% –Legal Services: 46%→64%

25 Short-Term Rentals 22% of homes that will be converted are currently rented at least some of the time The average capacity of these homes is 7.2 people These numbers imply a loss of 2,312 homes with a total capacity of 16,646 people from the short term rental pool

26 Impact on Infrastructure Internet Use –29% of homes that will be converted currently have no internet connection –After converting, only 1% expect to have no connection –The percent with a telephone dial-up service declines from 20% currently to 4% after conversion Water use –74% of homes use town water –24% have a private well Wastewater –84% have a title 5 septic system –7% have a cesspool or cesspit

27 Summary 1.How are Second Homes Currently Used? Most intensely in the summer 18% of second homeowners report not using their second home in the summer 74% of second homeowners report NEVER renting their home

28 Summary (Cont’d) 2.Will a significant number of second homes be converted into full time residences in the next 5 years? The next 15 years? 8% of respondents say they plan to convert their second home in the next 5 years 14% say they will convert it in the next 6-15 years 22% say they will convert in the next 15 years The status of 37% of second homes is uncertain

29 Summary (Cont’d) 3.Will the rate of conversions differ among the four sub-regions? There are statistically significant differences by sub- regions in terms of the rate of conversion The Upper Cape has the lowest anticipated conversion rate in the next 15 years at 19.7%; the Lower Cape has the highest at 24.8%

30 Summary (Cont’d) 4.Does the conversion of a seasonal home significantly impact the level of usage or just spread it out over the full year? Second home owners planning to convert their second home say they plan to increase the usage of their second home On average though they say approximately the same number of people will use the home for the same number of months This may mean they intend to use the home for more days per month

31 Summary (Cont’d) 5.How will changes in use patterns impact local spending patterns and the regional economy? Respondents planning to convert their second home report they will purchase a higher percentage of goods and services locally There may be a large loss of short-term rental space There may be a big increase in educated people looking for employment

32 Summary (Cont’d) 6.How will changes in use patterns impact demand for public and human services and infrastructure? There will likely be increased use of water and waste water There will likely be a particularly large increase in demand for internet services