Boston Just Cause Eviction

Boston Rent Control Bill Will Wreak Havoc In City’s Housing Market

by Rich Vetstein on March 9, 2023

in Massachusetts Real Estate Law, Rent Control, Rental Housing

Wu Administration Misled Public On Details Of Plan: Corrupt Local Rent Control Boards Can Override Rent Increases, Lifetime Leases Allowed, Small Housing Providers Unfairly Targeted

The Boston City Council just passed Boston Mayor Michelle Wu’s controversial rent control measure by a 11-2 vote. Wu marketed her plan as some sort of reasonable compromise where rents would be capped between 6 – 10% annually. Her PR team also attempted to re-brand rent control as “rent stabilization,” which again implies something softer than traditional rent control, which Massachusetts voters rejected back in the 1990s — because it was always a disastrous failure. The problem with all this is that Michelle Wu flat out misled and lied to the public about the details of her rent control plan. The devil is always in the details, and when you actually read the bill (embedded below), it will become abundantly clear that this is the most extreme rent control policy ever proposed in Massachusetts history. That is not an exaggeration. This plan will wreak havoc in the Boston housing market. It will only take me 5 minutes to explain why below.

The Return of Local Rent Control Boards Which Can Override and Lower Rent Caps

Mayor Wu in her letter transmitting her Rent Control Proposal states, “The maximum allowable rent increase would be set at the Boston Metro Consumer Price Index (CPI) + 6 percent, but in no event could rent for a unit exceed 10% in a year.” This is false. Hidden in the proposal (Sec. 2e-g) is a provision authorizing the return of local rent control boards, filled with political appointees, who have the authority to override the 6-10% cap, and lower the rent control cap on annual increases, or veto rent increases altogether. The bill provides: “The City may provide for fair return standards for the regulation of rent, which may including but are not limited to, changes to permissible rental rates based upon certain maintenance and capital costs and rapid increases in property taxes. . . The City may establish or designate an administrator or board, to promulgate regulations pursuant to this section and govern local rent regulation.”

The 6-10% cap was always a bait-and-switch. The Wu administration and local political rent control boards can simply lower the annual cap whenever they want based on an amorphous “fair return” standard. Depending on the circumstances, a local rent control board could also veto any proposed rent increase. Do you know what happens when housing providers cannot increase the rent while inflation, real estate taxes and maintenance costs are soaring in this weak economy? Take a wild guess. We saw this in the 1970s and 1980s — before left progressives like Mayor Wu were even born. Without enough rental income, small owners cannot afford to make repairs or do renovations, and their properties fall into disrepair. They will be forced to sell to big corporate investors who treat tenants even worse. Neighborhood property values sink, and crime goes up. After rent control was lifted in the mid 1990s, we saw the single greatest housing and development boom in the history of Boston. The Seaport neighborhood was created. Southie because a place for young professionals. Roxbury, Dorchester and Mattapan saw huge public investments in housing and infrastructure. Today, we are seeing entire areas turned around — near the TG Garden, Allston-Brighton, SoWa, Mission Hill, and on and on. That’s not a coincidence.

Rent Control Building Cambridge 1980s

The return of notorious rent control boards is also a huge problem. If you are old enough, you may remember the stories of out of control, corrupt rent control boards in Boston, Cambridge and Brookline doling out rent controlled units to college professors, doctors, and even state supreme court justice Ruth Abrams, who had a rent controlled apartment in Cambridge. Who will sit on these rent control boards under Wu Control? There are no standards or guidelines in place, and you can bet that ultra left activist Friends of Michelle will be sitting on these powerful boards, accountable to no one, certainly not housing providers or voters.

In all of their many press conferences, TV interviews, and “listening” sessions, which were dominated by tenant and housing activists, you never heard Michelle Wu say a word about the rent control boards or the “fair return standards.” That was intentional, and it was done to mislead the public and play down this proposal as fair and reasonable. Don’t be fooled by the smoke and mirrors. Read the fine print. This is a fugazi.

“Just Cause” Eviction Protections Enacted — Neverending Leases and Lifetime Tenancies Created

If rent control were not bad enough, the bill also includes “just cause eviction” protections for tenants which — and I’m not exaggerating — allows tenants to claim never-ending leases and lifetime tenancies. Now this is the 4th or 5th time that the City has tried to pass “just cause” eviction protections, the latest being the Jim Brooks Act, all of which failed to get enough votes. But somehow now, this incredibly one-sided measure has wound up in the Rent Control bill, and no one even blinked an eye.

The bill gives tenants an unlimited legal right to a lease renewal (even if there is no right of renewal in the lease) for an equivalent term of like duration at the rent controlled rate. Tenants at will have the same unlimited right to renew. There is no limit on the number of times a tenant can request a renewal, so this essentially creates a Never-Ending Lease with the applicable Rent Controlled Cap. Total insanity.

Furthermore, under the “Just Cause” measure, all “no-fault” evictions are prohibited in Massachusetts. These are essentially any eviction other than a non-payment situation, a serious lease violation, or some type of criminal activity. As has been the law for centuries in Massachusetts, a landlord may end a month-to-month tenancy at will with a 30 day notice to vacate. Landlords may also evict tenants who stay on after a lease has expired, or tenants who have refused a renewal request raising the rent. These situations come up all the time — owners want to sell the property; the landlord-tenant relationship has deteriorated beyond repair; a tenant is squatting after the lease expires. In all of these situations, the housing provider is stuck with the tenant. No eviction is permitted. Does that sound crazy to you? It does to me. Even in the case where an owner wants to move back into a rental unit or lease to a family member, the bill requires the payment of a relocation benefit to the tenant, set by the City. This would likely be thousands of dollars.

They call this “Just Cause”? Well, I call it illegal and unconstitutional. These provisions would essentially allow the government to force a housing provider to house a person against their will, indefinitely. Sounds like a violation of the Fifth Amendment Takings Clause and Contracts Clause of the U.S. Constitution. I can assure my readers that I, along with the legal team who challenged the Covid Eviction Moratorium, are looking very closely at the legality of this, as well as the the entire bill. Stay tuned for more developments there.

Small Housing Providers Are Unfairly Targeted

Wu Control unfairly targets smaller “mom and pop” housing providers, excluding large corporate landlords who have built projects within the last 15 years. Small housing providers account for 90% of the housing stock in Boston, according to WGBH Public Broadcasting. All stand alone rental properties built after 2008 would be rent controlled unless one of the units is owner-occupied and has six or fewer units. Units less than 15 years old are exempt. So while newer projects in the Seaport or Back Bay would be exempt from rent control, the family who rents out their condominium or owns a couple rentals in Southie or Dorchester or Roxbury would be subject to rent control. Does this sound fair to you?

Wu Misled Public About Smaller Multi-family Buildings

The Wu administration kept saying their rent control measure does not apply to smaller building with 6 or less units, so to the small landlords, nothing to worry about here. That is another lie. Read the bill. The exclusion on rent control only applies to a 6 or less unit building where the owner lives in the building. A stand alone 2, 3, or 4 family decker house, or a one or two unit condominium building and any other smaller rental property where the owner does not live there WILL BE SUBJECT TO RENT CONTROL.

Condominium Conversion Restrictions

The Wu Control Bill also allows the City to enact a condominium conversion ordinance which would impose a myriad of restrictions on your right to convert a two-three family house or other building into a condominium. Mandatory tenant relocation payments, and notification requirements (up to 1-2 year delays) would be imposed. This, in and of itself, would significantly discourage the creation of new housing units. Condominium units create new tax revenue for the City, and they also allow long time and elderly residents to tap into the equity value of their homes, but this would go by the wayside if there are too many impediments to conversion. It’s just another stupid policy decision by the Wu administration.

Rent Control Is Terrible Public Policy; Studies Show It Backfires

As I have written here, the great thing about the 1994 statewide 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 many 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. Rent controlled owners typically defer repairs and capital improvements, because they aren’t getting enough rental income to make the numbers work. With more run-down rentals, rent control also lowers property values overall in neighborhoods.

Moreover, a recent new National Apartment Association report analyzing the impact if a 3% annual cap on apartment rents in Boston concluded that:
● New apartment supply will drop by more than 700 units per year;
●  Apartment property values will drop by more than $260 million; and
●  Property tax revenue to the City of Boston will drop by more than $2 million annually.

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.

On To the State House

I have not seen one article in the media which has raised the above problems with the new rent control boards, their ability to veto rent increases, the just cause eviction measures, the lifetime leases, and the targeting of small housing providers. Not one. PSA to reporters: Do Your Job, and Do It Better. This disaster of a bill now goes to the State House and requires a majority vote and Gov. Healey’s approval. I sincerely hope that legislators take the time to truly review this proposal and get everyone’s input on it. Don’t exclude the rental property owner side like the Wu administration did. In fact, MassLandlords, the leading housing trade association, had to sue the Wu administration to get them to turn over public records and emails concerning how the Mayor’s Rent Stabilization Advisory Committee were selected. Certainly not the transparency Mayor Wu touted in her election campaign….

If you are interested in joining the fight against Rent Control, consider joining MassLandlords. The Small Property Owner’s Association (SPOA) is also engaged in this. The Greater Boston Real Estate Board issued a statement following Wu’s introduction of her plan saying, “rent control, also known as rent stabilization, is a proven failure. It increases housing costs, discourages upkeep and maintenance and disincentivizes construction. We strongly oppose Mayor Wu’s plan to bring government price controls on housing to Boston because it would make the region’s housing crisis even worse. Instead, the city – and all of Massachusetts – should focus on passing pro-housing policies that reduce red tape, encourage construction and lower overall costs.”

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Breaking: Boston City Council Passes (Watered Down) Just Cause Eviction Petition

by Rich Vetstein on October 5, 2017

in Housing Court, Landlord Tenant Law, Rental Housing

Updated 11/10/17

Proposal Heads To State House Next

Once thought to be dead, the Boston City Council yesterday approved the first ever “just cause” eviction act in Massachusetts, known as the Jim Brooks Community Stabilization Act. The Act, which opponents dubbed a return to rent control, requires landlords owning 6 or more units to file a notice to quit/termination with the newly formed Office of Housing Stability, prior to starting an eviction. However, after intense lobbying by property owner groups, the council passed a watered-down just cause eviction provision which only applies to foreclosing owners/lenders. The vote was 10-3 in favor of the Act, with City Councilors Bill Linehan, Sal LaMattina, and Timothy McCarthy voted no.

City Rights Notice

The Act requires that a landlord or foreclosing owner provide a city-approved “notice of basic rights” and a list of tenant assistance organizations simultaneously with the issuance of a notice to quit/termination or notice of lease renewal/expiration. In the case of a lease non-renewal or expiration, landlords and foreclosing owners must provide another “City Termination Notice” to the tenant and the City, at least 30 days prior to starting a summary process (eviction) action. All of these notices must be filed with the summary process case, and the failure to provide these notices will result in eviction cases being dismissed. As with any notice to quit, the best practice is to have such notices served by licensed constable or deputy sheriff.

“Just Cause” Grounds for Eviction

The original version of provided that landlords could only evict tenants for nine (9) specified just cause reasons. However, the final version passed only applies to foreclosing owners/lenders, not to ordinary landlords. Some of the just cause reasons include

  • Nuisance/damage to unit
  • Illegal activity such as drug use
  • Refusal to pay reasonable rent
  • Failure to provide access.
  • Owner requires premises for housing for family member

What’s Next?

It’s not all bad news for property owners, however. The bill faces more hurdles before becoming law. It is a Home Rule Petition, so it must be approved by the entire State Legislature before it becomes law. That may prove to be quite difficult for proponents. The bill may also face court challenges because, as opponents argue, it’s an unlawful return to rent control, which was outlawed in the 1980’s, and fundamentally alters existing private contracts and the very nature of a tenancy at will relationship.

The Act is also somewhat of a compromise between property owners and tenant groups. Tenants wanted to require landlords to submit to mediation for rent hikes of more than 5%, but were not able to get support for it among city council members. Tenant groups also pushed for prohibitions on evicting elderly or disabled tenants and long term renters with children in the school system. The Mayor rejected those ideas as well.

Additionally, small landlords owning 6 or fewer units are exempt from coverage as are owner-occupants of multi-family dwellings and Section 8/federally subsidized housing providers.

The final text of the Act can be read here.

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Breaking: Boston Mayor Walsh Files Just Cause Eviction Home Rule Petition

by Rich Vetstein on December 5, 2016

in Affordable Housing/40B, Housing Court, Landlord Tenant Law, Leasing, Massachusetts Real Estate Law, Rental Housing

A Step Back To Rent Control Or Solution To The Affordable Housing Crisis?

Citing skyrocketing rents and lack of affordable housing — and over the vociferous objections of property owners — Boston Mayor Marty Walsh has sided with pro-tenant groups and has formally submitted a home-rule petition to the Boston City Council to create wide-ranging “just cause” eviction protections for all Boston tenants. Harking back to the days of rent control, the petition, named the Jim Brooks Community Stabilization Act after a recently deceased Roxbury housing advocate, prohibits virtually all no-fault evictions in favor of evictions only for certain enumerated “just cause” grounds. The law also requires landlords to file a notice of termination with the newly formed Office of Housing Stability prior to starting an eviction. In a state which is already extremely pro-tenant, this new law will make evicting tenants even more difficult and cost prohibitive, and may also affect owners’ rights to raise rents and sell rental property in the City of Boston.

“Just Cause” Grounds for Eviction

The petition (embedded below) provides that landlords may only evict tenants for nine (9) specified reasons:

  • Non-payment of rent.
  • Violations of lease provisions
  • Nuisance/damage to unit
  • Illegal activity such as drug use
  • Refusal to agree to lease extension or renewal
  • Failure to provide access.
  • Subtenant not approved by landlord
  • Landlord requires premises for housing for family member
  • Post-foreclosure and occupant refuses to pay fair market rent

Middle Ground?

It’s not all bad news for property owners, however. The Walsh bill is a compromise from what tenant groups had pressed for. They wanted to require landlords to submit to mediation for rent hikes of more than 5%, but were not able to get support for it among city council members. Tenant groups also pushed for prohibitions on evicting elderly or disabled tenants and long term renters with children in the school system. The Mayor rejected those ideas as well.

Additionally, not all landlords are covered by the new law. Exempt are owners of 6 or fewer residential rental units, owner-occupants of multi-family dwellings, and Section 8/federally subsidized housing.

Landlord groups, meanwhile, remain skeptical of Walsh’s proposal. State law already has strong tenant protections, Greg Vasil, chief executive of the Greater Boston Real Estate Board told the Boston Globe. Adding more will only subject building owners to even-more-drawn-out legal fights with tenants, he said. And, Vasil added, Walsh’s restrictions may deter developers from building more apartments in Boston, which has been a top priority for the mayor, who has pledged to add 53,000 units by 2030 and combat high housing costs. “This would make it more difficult to develop housing for the middle of the market,” Vasil said. “We’ve been making good progress and I’d hate to see anything happen to that.”

Because the bill is a Home Rule Petition, it must be approved by the City Council then the entire State Legislature. The bill may also face court challenges because it fundamentally alters existing private contracts and the very nature of a tenancy at will relationship. If the petition becomes law, evictions in Boston will become even harder and more expensive.

Readers, what are your thoughts on this important development? Post below in the comments.

Boston Just Cause Eviction Home Rule Petition by Richard Vetstein on Scribd

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Raucous Boston City Council Hearing On Just Cause Eviction Proposal

by Rich Vetstein on March 15, 2016

in Housing Court, Landlord Tenant Law, Leasing, Massachusetts Real Estate Law, Rental Housing

Owens_Pinto-780x439Hundreds Cram Into City Council To Debate Controversial Petition

Hundreds of tenant activists, small property owners and landlords packed City Hall and poured over into overflow rooms last night as the Boston City Council held its first public hearing on the need for “just cause” eviction legislation, to stem the city’s skyrocketing rents. Harking back to the days of rent control, the proposal would prohibit a landlord from evicting any tenant except for certain “just cause” grounds. These grounds and their related procedural impediments to eviction, would in my opinion, make it nearly impossible (or cost prohibitive) to evict tenants, raise rents and sell occupied rental property in the City of Boston. For more specifics of the proposal, please see my prior post, Boston Tenant Activists Pushing Just Cause Eviction Proposal.

The City Council, led by Councilor Josh Zakim, heard four hours of impassioned testimony from both sides of the issue. Renters say it would create safeguards against eviction; landlords say it would slap them with thinly disguised rent controls.

“Any way you look at it, this is rent control,” Skip Schloming, of the Small Properties Owners Association, said in an interview just before the hearing started.

Lisa Owens Pinto, executive director of City Life/Vida Urbana, for the tenant side told news outlets that “this proposal would just require property owners to provide a good reason to evict someone.” Ms. Owens Pinto said her organization’s measure has three central provisions – landlords must provide a reason for an eviction; if a rent increase is sought, a landlord must first notify the city; once notified, the city must use its resources to contact and advise the affected tenant.

Gilbert Winn, chief executive of Boston-based developer Winn Companies, told the council that a new set of regulations isn’t needed and warned that any changes may have an adverse effect on housing. “You can’t attack the very thing you are trying to protect, which is the rental economy,” Winn said. His company is a major developer of affordable housing projects. Winn, the son of Winn founder Arthur Winn, also claimed the proposal would provide tenants with a potential avenue to avoid living up to their rental agreements. “If a contract between a willing renter and a willing owner cannot be adhered to, and only one party has to adhere to it, then the whole system falls apart,” Winn said.

The proposal has been a moving target. A revised draft of the group’s proposal, originally submitted as a home-rule petition, wasn’t available at the hearing, leaving several councilors perplexed as to why it hadn’t been officially filed. “We’re talking about a specific proposal and I’m finding it hard to follow because we don’t have the draft in front of us,” City Councilor Josh Zakim said about halfway through the four-hour hearing.

Prior to the hearing, tenant advocates agreed to drop one of their most controversial requests: a mandate that rent increases of 5 percent or more be subject to nonbinding mediation. Instead, they are pushing for a rule that would require landlords to notify the city of rent hikes that result in eviction, known as a no-fault notice to quit.

Mayor Marty Walsh had initially signaled support for the measure, but wanted to see how the details would be fleshed out. As they say, the devil is in the details and it’s quite possible this proposal will get significantly watered down during the legislative process, if it survives at all.

The hearing was videotaped and can be viewed on the City’s website here.

Photo credit: New Boston Post photo by Evan Lips

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Boston Tenant Activists Pushing “Just Cause” (Rent Control) Eviction Bill

by Rich Vetstein on November 29, 2015

in Landlord Tenant Law, Massachusetts Property Values, Massachusetts Real Estate Law, Rental Housing, Senior Housing

Update: Hearing On Proposal Scheduled for March 14, 2016 at 4PM at Boston City Council Chamber Room

Rent Control Thinly Disguised As “Just Cause” Eviction Proposal

Citing skyrocketing rents and lack of affordable housing, several activist pro-tenant groups in the City of Boston, with the assistance of the Harvard Legal Aid Bureau, have submitted a home-rule petition to the Boston City Council to create a wide-ranging “just cause” eviction protection for all Boston tenants. Harking back to the days of rent control, the petition would prohibit a landlord from evicting any tenant except for certain “just cause” grounds. These grounds and their related procedural impediments to eviction are shockingly socialist in nature, and in practice would make it nearly impossible (or cost prohibitive) to evict tenants, raise rents and sell occupied rental property in the City of Boston. Rental property owner groups are vigorously opposed to this proposal.

“Just Cause” Grounds for Eviction

The petition provides that landlords may only evict tenants for eight (8) specified reasons. The most troubling situations are outlined below.

  • Non-payment of rent. A tenant’s failure to pay rent must be “habitual” (which is left undefined) and “without legal justification.” Ordinarily, if a tenant fails to pay rent even once, the landlord may terminate the tenancy and evict. Under the just cause standards, the standard is significantly higher. What exactly is “habitual”? Two late payments, three, four? No one knows, but the petition puts the burden of proof on the landlord.
  • Damage by tenant. In order to evict, the tenant must have “willfully caused substantial damage to the premises beyond normal wear and tear and, after written notice, has refused to cease damaging the premises, or has refused to either make satisfactory correction or to pay the reasonable costs of repairing such damage over a reasonable period of time.” This would make it much more difficult to evict based on damage caused by a tenant.
  • Disorderly conduct. The tenant has continued, following written notice to cease to be so disorderly as to destroy the peace and quiet of other tenants at the property.
  • Illegal activity. The tenant has used the rental unit or the common areas of the premises for an illegal purpose including the manufacture, sale, or use of illegal drugs.
  • Failure to provide access. The tenant has, after written notice to cease, continued to deny landlord access to the unit as required by state law.

Rent Increases and No Fault Evictions

The most fundamental impact of the just cause eviction petition is how it attempts to severely curtail landlords’ legal right to raise rents and file no-fault evictions. Make no mistake about it, the underlying premise of the petition is rent control – to keep rents (even under market) from increasing and stabilizing “affordable housing.”

Resurrecting the old Boston Rent Control Board, landlords are required to participate in a City-approved mediation session with that agency before raising rents or even declining to renew an expired lease. The board is then required to notify all tenant advocacy groups in Boston of the situation. These groups are invited into every eviction or rent increase process. It will be one landlord against many tenants and advocates. There is no stated limit as to how long the mediation process can last, and after which a landlord still must go to Housing Court which can take anywhere from 6-12 months to complete a no-fault eviction under current law. A landlord’s failure to follow these requirements will result in the immediately dismissal of their eviction case and can also subject them to a $1000 fine by the City.

Moreover, in true socialist form, there are also substantial roadblocks to evicting tenants even where the unit will be used for the owner’s own personal residence. Owners are banned from evicting tenants who are 60 years old, disabled or have children in the school system and have lived in the premises for 5 or more years. (Landlords can only end tenancies after the school year is over.) Seeking to turn private properties into government subsidized elderly and disabled housing, the petition thereby creates lifetime tenancies for these classes of renters. This will greatly discourage investment and capital improvements for these properties many of which are double and triple deckers in struggling neighborhoods.

Rent Control Does Not Work

As counsel for landlords across Greater Boston and having testified at the State House in support of various landlord tenant legal reforms, I am strongly opposed to this proposal. This petition is the fourth attempt by Boston tenant advocates to bring back rent control, all of which have failed after voters rejected rent control state-wide in the mid-1990’s. The idea of rent control has been debunked as a failed policy by countless economists, and actually makes affordable housing stock shrink. A restrictive price ceiling reduces the supply of properties on the market. When prices are capped, people have less incentive to fix up and rent out their property, or to build new projects. Slower supply growth actually exacerbates the price crunch. Those landlords who do rent out their properties might not bother to maintain it, since both supply and turnover in the market are limited by rent caps; landlords have little incentive to compete to attract willing tenants. Landlords may also become choosier, and tenants may stay in properties longer than makes sense.

The problem of skyrocketing rents in Boston and affordable housing is complex and certainly worthy of out-of-the-box thinking. As an old city with little if any developable land left, Boston has always dealt with a supply vs. demand problem. Boston developers have long been required to pay into linkage funds designed to promote affordable housing. Mayor Walsh recently announced a plan to build 53,000 new housing units by 2030. The city’s colleges can also do a better job of creating new student housing. But even with all of this centralized planning, the influx of people to the city, drawn by jobs and Boston’s quality of life, have made this problem a very tricky one to solve.

However, rent control disguised as a just cause eviction proposal is not the answer. It’s not fair to make small property owners to bear the burden of creating affordable housing across the city. That’s just flat out Un-American. If we want more affordable housing, create economic incentives to build more, and encourage the City to buy their own properties and create housing. Rent control has never been a successful solution.

If and when the Just Cause Eviction proposal rears its ugly head in the Boston City Council again, email your local city councilor and the Mayor.

A copy of the Just Cause Home Rule Petition can be found below.

Boston Just Cause Ordinance Draft Sept 2015

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