2008 Survey of Cape CodSecond Homeowners

Overview of FindingsMay 19, 2009

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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)

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Overview of Presentation

• Research Questions

• Methodology

• Response Rate

• Respondent/Second Home Profile

• Current Use of Second Homes

• Conversions of Second Homes

• Economic Impact

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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?

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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?

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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

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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

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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

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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%

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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

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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

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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

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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

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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

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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 Years

7.8% 8.5% 9.0% 6.2% 7.9%

6-15 years

12.0% 13.1% 16.3% 14.0% 14.0%

Overall 19.7% 21.3% 24.8% 20.1% 21.5%

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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

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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

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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

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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

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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

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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

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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

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Shopping

0%10%20%30%40%50%60%70%80%90%

100%

BeforeConverting

AfterConverting

Clothing

Sports and RecEquipment

HouseholdFurnishings

Office Supplies

Applicances

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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%

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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

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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

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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

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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

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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%

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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

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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

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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