Rent control in Massachusetts

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Rent control in Massachusetts was a means of limiting the amount of rent charged on dwellings. There have been three instances where rent control was implemented: after World War I, after World War II, and between 1970 and 1994.

Contents

Early efforts

In 1920, with troops returning home from World War I and with an economic recession, the state's rental market was tight. [1] The Great and General Court of Massachusetts adopted several laws to address the situation. [1] This included limiting rent increases to no more than 25% per year. [1] [2] A state analysis found that some landlords got around the limits by rushing renters out and increasing the rent with the next tenant. [1] Others began raising rents by the maximum amount allowed, 25%. [1] The law expired three years later. [1] [2]

In response to the Great Depression and World War II-era shortages, Congress enacted emergency price controls on consumer goods and rent control in 1942. [3] [1] [2] The federal policy lapsed in 1953, but Massachusetts continued until 1955 when Governor Christian Herter vetoed an extension. [1]

1960s and 1970s adoption

The history of rent control in Massachusetts and around the nation "paints a consistent picture of market distortions and unintended, often inequitable, consequences." [4]

Legislative and municipal adoption

In 1969, the City of Boston sought and was granted the ability to institute rent control. [1] In 1970, the state authorized rent control in municipalities with more than 50,000 residents, potentially affecting to more than 40 communities. [1] [2] The effort was spearheaded by a group of Harvard University graduate students. [5]

Lynn, Somerville, Brookline, and Cambridge adopted rent control when given the chance. [2] Local boards in these communities approved or disapproved of increases in the rent to each unit under their jurisdiction. [6] Rent control boards had executive, legislative, and judicial powers. [7] They passed new laws, enforced new laws, and judged whether or not their laws had been violated. [7]

Landlords could not increase rent without permission, even for basic repairs and upkeep, and instead had to submit detailed requests and proposals demonstrating that the work had been done with the cheapest possible materials. [6] Landlords would have to pay for repairs or to replace broken appliances and then submit receipts to the rent control boards, who were under no obligation to approve increases to recover the costs. [7]

Urban blight and decrease in rental units

According to the National Bureau of Economic Research, the number of rental units was reduced by 15% and tenants were 8-9% less likely to move due to rent control. [8] [9]

Tenants paid 40% below market rates on their units, and the value of properties was diminished by 45%. [8] Because they could not recover their costs, development of new buildings was discouraged and basic upkeep of existing buildings went undone. [6] [4] Properties that were under rent control fell into disrepair, and they negatively impacted the property values of the buildings around them. [1]

In 1985, Boston mayor Ray Flynn ordered a survey of all boarded up buildings in Boston. [7] By the time rent control ended in Boston, there were more than 10,000 vacant units in that city. [7]

Redistribution of state aid

Because they fell into disrepair, and because properties that generate less income are less valuable, they were assessed lower. [10] Municipalities lost tax revenue because of the lower assessments. [10] Because of the lower tax revenue, state aid to communities with rent control went up, forcing communities without rent control to subsidize those who had it. [10] [11]

Rent controlled units went to the rich

There was no requirement that rent controlled apartments be rented to low-income tenants and at least 20 percent of all rent controlled apartments housed the rich. [9] [4] The vast majority housed middle- and high-income earners. [9] In an independent study conducted of 2/3 of the rent controlled apartments in Cambridge in 1988, 246 were households headed by doctors, 298 by lawyers, 265 by architects, 259 by professors, and 220 by engineers. There were 2,650 with students, including 1,503 with graduate students. [9]

Those who lived in rent controlled apartments included

Racial disparities

Despite making up 25% of the population of Cambridge, only 12% of rent controlled apartments in Cambridge housed people of color. [9]

Worsened climate change

Landlords were not allowed to charge tenants the actual cost of the heating and cooling bills. [6] In one building in Cambridge, the rent control board set an allowance in 1979 of 1,038 gallons of heating oil a year. [6] By 1983, when the rent control board allowed an increase in rent to account for more oil, tenants were burning 4,730 gallons a year. [6] In that four year span, an extra 12,000 gallons of oil were burned and 122 tons of carbon dioxide were emitted into the atmosphere. [6]

Repeal

Cities

In 1974, the voters of Lynn overwhelming repealed rent control. [8] Sommerville repealed their law in 1979. [8]

Boston began decontrolling units in 1974, allowing rents to reset when new tenants moved in, and relaxing other controls. [1] [8] Brookline began decontrolling units in 1991. [8]

Statewide

Rent control was repealed in 1994 via ballot initiative. [13] [5] [8] [1] At the time, only Boston, Cambridge, and Brookline had rent control measures in place. [13] [8] Only Cambridge had a full system in place. [8]

Many saw the repeal effort as difficult because it was often not just the poor and the elderly who benefited from rent control, but middle class and even wealthy renters. [12] The opposition challenged the 73,769 petition signatures the pro-repeal side collected to put the measure on the ballot. [12] In the end, the pro-repeal side had 34 more than was required. [12]

Proponents of the repeal argued that it kept rents artificially low, made it hard to lease a property, and made it difficult to make repairs and improvements to the property. [14] Opponents argued that it kept prices from rising too quickly in a tight market. [14]

After the vote, the Massachusetts General Court passed a law protecting low-income tenants in rent control apartments from being evicted. [12] Only 9.4% of tenants in rent control apartments qualified. [12] [9]

Impact on Cambridge

Within four years of repealing the law, Cambridge, where "the city's form of rent control was unusually strict," saw new housing and construction increase by 50%, and the tax revenue from construction permits tripled. [12]

Property values in Cambridge increased by about $7.8 billion in the decade following the repeal. [10] Roughly a quarter of this increase, $1.8 billion ($3 billion in 2024 dollars), was due to the repeal of rent control. [10]

Close to 40% of all Cambridge properties were under rent control when it was repealed. [10] Their property values appreciated faster than non-rent controlled properties, as did the properties around them. [15]

Cambridge decisions

Bologna

In 1984, Vincent Bologna, a Sicilian immigrant and United States Navy veteran, purchased a dilapidated, abandoned house in Cambridge. [16] He renovated the building himself, hauling away 55 truckloads of trash and restoring the building, including remedying all 60 code violations. [16]

He turned the building into a two family home, and moved his family into the 800-square-foot rear apartment. [16] He rented the front apartment to Drs. Krenie and Marie Stowe, a psychiatrist and her daughter, a student at Harvard Law School. [16] [5] The Stowes sublet out rooms in their apartment. [16]

The Cambridge Rent Control Board ruled that because the property had once been a rooming house, even though it was illegally operating as one in violation of the local zoning laws, that it was covered by rent control. [16] Because of this, they ruled Bologna had been overcharging the Stowes, who made a combined income of $110,000 a year in 1986. [16]

The Board ordered Bologna to convert the house back into a rooming house and to slash the rent he was charging the Stowes by $1,000 a month. [16] The Stowes then sued Bologna for retroactive overcharges, plus triple damages and legal fees. [16] [8] Their lawyer encouraged them not to pay any rent, as Bologna did not have enough assets to pay more than $100,000 in fees and damages. [16] The Bologna family faced foreclosure and bankruptcy as a result. [16] They also lost another rental property that they owned because they could not keep up with the mounting legal bills while not receiving rent from the Stowes for five years. [17] [8]

The Cambridge Zoning Board then refused to allow Bolgona to convert the home back into a rooming house as it violated the zoning laws. [16] Bologna and his family were ordered to live in a one bedroom apartment in a converted garage. [16] [5] [14]

Coughlin

A city ordinance required the rent control board to issue a permit allowing one or more rent controlled units to be removed from the provisions of rent control before the city could issue a demolition permit. [18] In January 1989, the owners of 189-191 Hampshire Street told the state Building Code Appeals Board that their building was dangerous in its current condition and that they could not afford to make repairs. [18] They asked for permission to tear it down instead. [18] In July, the state board agreed and ordered Cambridge to issue the permit. [18] The city then took the owners to court to prevent them from tearing it down and removing rent controlled apartments. [18]

McAdams

Cambridge prohibited any apartment from being vacant for more than 120 days. [19] Those who violated the law were subject to a $500 a day fine and jail time. [19]

Because of the low rents owner John McAdams was receiving, he was unable to repair several of his apartments on Broadway to make them habitable. [19] He testified to the rent control board that it would cost more than $45,000 to make them legally habitable. [19] The board allowed McAdams to receive between $144 and $192 a month for the apartments. [19]

When they sat vacant longer than 120 days, criminal charges were filed against him and a warrant was issued for his arrest. [19] Four families then moved into the apartments, without McAdams' knowledge or consent. [19] Mayor Alice Wolf said she recognized that squatting in the apartments was "an illegal action," but supported the squatters and visited them in the apartments. [19]

Petrillo

Peter and Helen Petrillo owned a three-family house in Cambridge. [20] They lived in one unit, rented a second unit to Helen's brother, and rented a third unit to another tenant. [20] When their daughter's home burned down, the Petrillos moved into the basement to give their daughter, her husband, and their three children their unit. [21] [22] [14]

The Rent Control Board ruled that it was now a four unit building and thus subject to rent control. [21] They ordered the Petrillos to slash their tenant's rent and to pay them damages. [21]

Additionally, because the basement ceiling was too low, the board ordered the Petrillos to jack up the entire house, at their expense, to create a legal apartment. [17] The board refused a request to allow the basement to be restored to its previous unfinished state. [17] Three days after the board's ruling, Peter died of a heart attack. [21] [20] [14] [8] Peter's "heart attack was a result of the stress from the hearings. It was just too much for him," according to Helen. [14]

Tarvezian

In 1990, George Tarvezian owned a six unit rent controlled property that was "clearly distressed" on Prospect Street. [23] He was in the process of selling it to a non-profit when a judge found him guilty of illegally not renting out several the apartments and ordered him to either sell the property or immediately rent them out. [23] At the time, two united were rented and a squatter was in the third. [23] The non-profit said the building needed a gut rehab and estimated it would cost $50,000 per unit. [23]

Tarvezian served six months in jail and was fined $3,000. [24]

Other

Hong Lu, who spoke English as a second language, was unable to adequately represent herself when she appeared before the rent control board. [24] They ordered her to rent rooms at $250, well below the $450 rent charged by the nearby YMCA. [24] She was forced to borrow money to pay her bills. [24]

When Roberta Dowling took more than 120 days to rent a vacant apartment in 1990, she was fined $25,000. [24]

Emil and Donna Javorski originally lived in a unit they owned, but later moved. [24] The rent control board convicted them of not living in their own home before the Javorskis filed a change of address form. [24]

Owners were not to purchase a rent controlled condominium and then live in it themselves. [24] Several owners of condos protested at city council meetings with bags over their heads to protect their identities and to prevent them from being arrested. [24]

Attempts to restore rent control

In the years between 2012 and 2024, the rise in the median gross rent in Massachusetts rose nearly 30% faster than the median household income did across the Commonwealth. [4] Massachusetts has one of the lowest rates of new housing production anywhere in the country. [4] In response, some have called for a return to rent control as a way to prevent tenants from being evicted and neighborhoods from becoming gentrified. [4] However, there is "a general consensus among economists" that instituting rent control would not solve the affordable housing crisis facing the state. [4] The center-left Brookings Institution has found that "While rent control appears to help current tenants in the short run, in the long run it decreases affordability, fuels gentrification, and creates negative spillovers on the surrounding neighborhood." [25]

State representative Mike Connolly has proposed bills to restore rent control in the Massachusetts House of Representatives for years without success. [13] [8] In a 2020 effort, Connolly proposed a rent control measure as an amendment to an economic development bill in the House; it failed 22–136. [13] In 2023, he organized a last minute effort to restore rent control via ballot initiative at the 2024 Massachusetts election. [13] He suspended the campaign several months later when he only got 10,000 of the 75,000 signatures needed to put it on the ballot. [26]

Mayor Michelle Wu has proposed re-instituting rent control in Boston. [1] Her proposal has been criticized by both the real estate community, which opposes any form of rent control, and rent control advocates for not going far enough. [1] The Boston Real Estate Board launched a campaign in 2023 to oppose Wu's measure, saying it will discourage housing production in a city and a region that already has an acute shortage, will make maintaining properties more difficult, and will hurt tax revenues. [1]

West Stockbridge

A special state law passed in 2013 gives the West Stockbridge Board of Selectmen, acting as the Rent Control Board, the power to regulate rents at trailer parks. [27] [28]

See also

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References

  1. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Arsenault, Mark; Ostriker, Rebecca (December 17, 2023). "A BOSTON BUILDING, SCATTERED SOULS, AND RENT CONTROL REVISITED". The Boston Globe.
  2. 1 2 3 4 5 "Rent control was enacted in 1920". Mass Landlords, Inc. Retrieved January 3, 2024.
  3. ↑ "History of the Rent Control Debate in California". No Place Like Home. Archived from the original on 2020-09-26. Retrieved 2020-11-28.
  4. 1 2 3 4 5 6 7 Peyser, James (April 2, 2024). "Does rent control help or hurt the quest for affordable housing?". CommonWealth Beacon. Retrieved April 17, 2024.
  5. 1 2 3 4 5 6 7 "'THE WEEK'". Vol. 46, no. 20. National Review. October 24, 1994. pp. 10–24.
  6. 1 2 3 4 5 6 7 "Rent control boards stopped improvements and basic repairs". Mass Landlords, Inc. Retrieved January 3, 2024.
  7. 1 2 3 4 5 "Building maintenance went downhill". Mass Landlords, Inc. Retrieved January 3, 2024.
  8. 1 2 3 4 5 6 7 8 9 10 11 12 13 Joyce, Tom (January 13, 2020). "Once Rejected by Voters, Rent Control Back on the Table in Massachusetts". NewBostonPost.
  9. 1 2 3 4 5 6 7 8 9 "Renters who needed to move couldn't qualify". Mass Landlords, Inc. Retrieved January 3, 2024.
  10. 1 2 3 4 5 6 "Towns lost tax revenue". Mass Landlords, Inc. Retrieved January 3, 2024.
  11. ↑ Quattrochi, Doug (December 17, 2023). "Boston's Cherry-Flavored Rent Control May Cost Your Town a Teacher or Two". Banker & Tradesman. Retrieved January 3, 2023.
  12. 1 2 3 4 5 6 7 Havemann, Judith (September 19, 1998). "Mass. City Gets New Lease on Life". The Washington Post. Retrieved October 23, 2023.
  13. 1 2 3 4 5 Lisinski, Chris (August 3, 2023). "Cambridge rep moves to put rent control on state ballot". CommonWealth. Retrieved October 22, 2023.
  14. 1 2 3 4 5 6 Chong, Curtis R. (November 7, 1994). "Citizens Dispute Question 9". The Harvard Crimson . Retrieved October 22, 2023.
  15. ↑ Autor, David H.; Palmer, Christopher J.; Pathak, Parag A. (June 2014). "Housing Market Spillovers: Evidence from the End of Rent Control in Cambridge, Massachusetts". Journal of Political Economy. 122 (3): 661–717.
  16. 1 2 3 4 5 6 7 8 9 10 11 12 13 English, Bella (July 1, 1992). "Rent law exacts a price too high". Boston Globe. p. Metro 1.
  17. 1 2 3 "The Conditions of Massachusetts Rentals under Rent Control: A Retrospective". Massachusetts Landlords Association. January 7, 2021. Retrieved October 22, 2023.
  18. 1 2 3 4 5 Stroud, Ellen (January 3, 1991). "Rent case pits state against rent board on demolition question". The Cambridge Chronicle. pp. 1, 2.
  19. 1 2 3 4 5 6 7 8 Stroud, Ellen (July 5, 1990). "Opposing illegal vacancies". The Cambridge Chronicle. pp. 1, 7.
  20. 1 2 3 Lewis, Diane (January 5, 1990). "Cambridge settles rent control case". The Boston Globe. p. 36.
  21. 1 2 3 4 Jacoby, Jeff. "At stake in Question 9: fairness for property owners". The Boston Globe. p. 15.
  22. ↑ Petrillo, Helen (February 7, 1995). "What about the toll on elderly homeowners?". The Boston Globe. p. 18.
  23. 1 2 3 4 "Judge orders landlord to sell". The Cambridge Chronicle. December 6, 1990. p. 8.
  24. 1 2 3 4 5 6 7 8 9 "Affordable housing and its providers disappeared". Mass Landlords, Inc. Retrieved January 3, 2024.
  25. ↑ Diamond, Rebecca (October 18, 2018). "What does economic evidence tell us about the effects of rent control?". Brookings Institution. Retrieved April 17, 2024.
  26. ↑ Carlock, Catherine (November 11, 2023). "Connolly suspending campaign to put rent control on statewide ballot". The Boston Globe. Retrieved November 11, 2023.
  27. ↑ "AN ACT PROVIDING FOR THE ESTABLISHMENT AND ADMINISTRATION OF RENT REGULATIONS AND THE CONTROL OF EVICTIONS IN MOBILE HOME ACCOMODATIONS IN THE TOWN OF WEST STOCKBRIDGE". Commonwealth of Massachusetts. Retrieved February 22, 2024.
  28. ↑ Bellow, Heather (February 22, 2024). "A West Stockbridge trailer park is petitioning to raise the $241 monthly rent by 230 percent. Tenants are fighting back". The Berkshire Eagle. Retrieved February 22, 2024.
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