Rent Control: Coming To A Boston Rental Property Near You?

by Rich Vetstein on January 19, 2023

in Affordable Housing/40B, Rent Control, Rental Housing, Senior Housing

Boston Mayor Michelle Wu Preparing To File Comprehensive Rent Control and Just Cause Eviction Bill

Yesterday all the major Boston news outlets reported that City of Boston Mayor Michelle Wu is readying a proposal to bring back rent control to Boston. Voters statewide rejected the controversial idea three decades ago in 1994, and several new economic studies, including out of Cambridge, MA, have definitively proven it is a failed policy. Wu’s rent control ordinance would cap annual rent increases between 6% – 10% depending on the Consumer Price Index and Inflation Index. While very small owner-occupied buildings are exempt from the law, this may be negated by Wu’s “just cause” eviction protections, which make it nearly impossible for landlords to bring “no-fault” evictions and remove “at will” tenants.

Under the Home Rule Amendment, “Wu Control” would need full approval from the entire state Legislature and Gov. Maura Healey. According to the Boston Globe, House Speaker Ronald Mariano has “questions” about the policy, including fears that it could discourage investments in housing. “It’s been voted down a number of times,” the Quincy Democrat noted. Gov. Healey, meanwhile, avoided taking a position on Wu’s proposal, saying, “It’s something I have to look at and review.” Similarly, a spokesperson for Senate President Karen Spilka said only that she would review “any finalized proposal” that came before the Legislature.

Predictably, property owners are vehemently opposed to bringing back rent control. As I have written here, the great thing about the 1994 vote banning rent control is we now have empirical data and a reliable study from prominent economists which has compared the Cambridge housing market during rent control vs. after rent control. We also have data and a similar study out of San Francisco. Both studies (and others from the past) have found that rent control did not work at all, and actually had the exact opposite effect — contributing to gentrification, displacement of tenants and income inequality.

If Wu is successful in getting rent control passed in Boston, rest assured that lawyers like myself will be seriously contemplating lawsuits challenging the measure, perhaps even all the way up to the U.S. Supreme Court, which showed a willingness to strike down overreaching eviction moratoria laws during the Covid pandemic. The same rationale could easily apply to rent control.

What far left progressives like Mayor Wu fail to appreciate is the basics of micro-economics and supply vs. demand. There is far too little affordable housing in Massachusetts, due in large part to burdensome zoning, lack of available buildable land, and NIMBY neighborhood groups. Imposing an artificial government price control does nothing to address the critical supply issue. To the contrary, it will just make it worse, as studies show rent control results in deferral of landlord repairs and capital improvements and depression of nearby housing stock. If Wu is serious about tackling housing, she must have the City build its own affordable housing projects and incentivize developers to do the same. Otherwise, she’s just playing politics.

I spoke to Dan Rea on his “Nightside” show on WBZ Radio about Mayor Wu’s rent control proposal. Listen HERE.

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