Despite the absence of a long-sought transfer fee, a sweeping new housing bill signed by the governor Tuesday was cheered by Vineyard housing advocates who say several new provisions could ease the Island’s housing crisis. 

The $5.1 billion bond bill is the largest in Massachusetts history, and it includes policies that explicitly give the Vineyard new housing opportunities, allow accessory dwelling units by right in certain areas across the state and make special allowances for towns with fluctuating populations. 

Housing has long been one of the biggest struggles on Martha’s Vineyard, and the pandemic exacerbated the problem. The gap between the median price of a home and the Island’s median income is now nearly $1 million.

One of the biggest pieces of the new legislation to chip away at that for the Island is a new seasonal communities designation, advocates said. The new designation recognizes that tourist destinations face different housing challenges and gives them new ways to create and preserve housing.

State Sen. Julian Cyr, one of the Island’s representatives in the statehouse, helped craft the designation and said it will allow Vineyard towns to acquire year-round housing occupancy restrictions on properties, as well as develop housing for public employees. 

Mr. Cyr gave much of the credit for the bill’s passing to Vineyarders, who have been pressing lawmakers for solutions as the Island’s median home price climbed to about $1.5 million in 2023. 

“These provisions are now law because of the unrelenting and dedicated advocacy from scores of Islanders,” Mr. Cyr said Tuesday. 

Only Martha’s Vineyard and Nantucket automatically qualified for the seasonal designation, though several towns on the Cape and in the Berkshires would likely qualify. Under the designation, the Islands can create year-round housing trust funds that target housing for people who may make too much for affordable housing, but still can’t afford to buy homes in the Vineyard’s red hot housing market.

“The seasonal designation is a big win,” said Arielle Faria, a project manager at Island Housing Trust and the co-chair of the Coalition to Create the Martha’s Vineyard Housing Bank. 

To have the state acknowledge that the Vineyard and other seasonal communities are different is a major change from past policy, Ms. Faria said. For the first time, the state has also included the phrase “attainable housing” in law, indicating a willingness to move towards housing for the so-called “missing middle” faction.

Though the bill had some wins, it’s not quite what the Vineyard was hoping for when hundreds of Islanders went to the State House and urged lawmakers to pass legislation to start a transfer fee tax on high-end home sales. 

That provision, which could have bankrolled a housing bank, was cut out by both the state House and Senate, despite its support from the governor. The seasonal designation also previously had a $50 million bond attached to it, which was lost when competing versions of the bill were hashed out by lawmakers. 

Dukes County commissioner and housing bank coalition member Doug Ruskin said there were a lot of great things in the bill, but these losses were a blow. 

“It doesn’t come with money and that’s what we need most,” he said.

Despite these setbacks, Ms. Faria, who is running for state representative, said these new policies are a step in the right direction. 

“Just because we didn’t get a transfer fee in this round, we did get a lot of what we asked for,” she said. 

Several other provisions in the bill could help the Island, according to local officials. 

As part of the seasonal communities designation, municipalities are now also allowed to use public funds for municipal employee housing. It’s something that Edgartown has been seeking for a while, said town administrator James Hagerty. 

As the population grows older and housing prices climb, he has had trouble staffing town hall, especially in high-level positions. The town just last week closed on the former Martha’s Vineyard Land Bank headquarters on Upper Main street in Edgartown, with hopes of potentially using the property for town employees. 

The new law will allow the town to formally dedicate cash to develop housing there, making it easier for the town to compete with off-Island communities and higher paying private sector jobs.

“It’s definitely welcomed,” Mr. Hagerty said. 

The 182-page bill has some zoning changes to make building smaller homes easier, something Vineyard officials felt could help if used for the year-round housing market. The state will now allow secondary homes on a property, known as accessory dwelling units, by right on single-family zoning districts across Massachusetts. The units would need to be 900-square feet or smaller. 

Seasonal communities could also adopt zoning to allow so-called tiny homes — homes with less than 400 square feet in floor area —  on undersized lots if the homes were used for year-round housing and meet other zoning and building provisions.  

These new allowances will help with the Island’s need, said Victor Capoccia, the chair of the Tisbury affordable housing committee, though they won’t fix everything. 

“The overall reaction: it’s good news, but it’s not the solution,” he said. “It’s a step in the right direction and we need to do much more.” 

Supporters of the housing bank echoed the sentiment and said they would continue to pressure Beacon Hill for more ways to support Islanders. 

“We’re not stopping until we have a transfer fee passed,” Ms. Faria said.