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Wu sets up committee to study rent stablization; would recommend legislation for after Baker leaves office
By adamg on Thu, 03/10/2022 - 12:20pm
Mayor Wu today announced members of a rent stabilization advisory committee of "housing advocates, developers, tenants, and other stakeholders" that would develop proposed legislation to let Boston put some brakes on rapidly escalating rents, in a way the city hasn't seen since small landlords won a statewide referendum question in 1994 to ban rent ordinances in Boston, Brookline and Cambridge.
Wu, who ran for office on a platform that included rent stabilization, said the goal would be to create a bill that could be submitted to the state legislature next year - after Gov. Baker, who has opposed the idea of rent control, leaves office and, presumably, either Attorney General Maura Healey or state Sen. Sonia Chang-Diaz, both Democrats, replaces him, in a state where the leading Republican candidate is a strong Trump supporter. The measure would first have to be approved by the City Council as a home-rule petition, or formal request, to the state legislature.
Unlike rent control, in which the city essentially sets rents and annual increases, rent stabilization typically limits the percentages by which landlords could increase rents, often by the cost-of-living. However, the mayor's office adds, rent stablization could "include other tenant protections" for the roughly 65% of Boston residents who rent.
Members of the committee:
- Emma Anderson, Boston Teachers Union member
- Kathy Brown, Coordinator at Boston Tenant Coalition
- Joe Byrne, Executive Secretary-Treasurer for the North Atlantic States Regional Council of Carpenters
- Karen Chen, Executive Director at Chinese Progressive Association
- Filaine Deronnette, Vice President of Health Systems for 1199 SEIU
- Emilio Dorcely, CEO of Urban Edge
- Dermot Doyne, Local landlord and business owner
- Chris Herbert, Managing Director of the Harvard Joint Center for Housing Studies
- Beyazmin Jimenez, Abundant Housing Massachusetts Board President
- Michael Kane, Executive Director at HUD Tenant Alliance
- Brian Kavoogian, Managing Director of National Development
- Curtis Kemeny, CEO and President of Boston Residential Group
- Joe Kriesberg, President of Massachusetts Association of Community Development Corporations
- Denise Matthews-Turner, Co-Executive Director at City Life Vida Urbana
- Lisa Owens, Executive Director at Hyams Foundation
- Jeanne Pinado, Vice President of Capital Markets at Colliers International
- Mimi Ramos, Executive Director at New England United for Justice
- Megan Sandel, Associate Professor of Pediatric Medicine at Boston University
- Chanda Smart, CEO at Onyx
- Lauren Song, Senior Attorney at Greater Boston Legal Services
- Justin Steil, Associate Professor of Law and Urban Planning, MIT
- Carolyn Villers, Executive Director at Mass Senior Action
- Josh Zakim, Founder and Executive Director at Housing Forward MA
- Kirk Sykes, Managing Director at Accordia Partners
- Kim Sherman, President of Related Beal
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Comments
Already not going well...
What a cluster**** of a committee. Few actual experts and just a all-star lineup of special interests. Can't wait to hear what the professor of pediatric medicine has to say about rental prices?
good point
the committee should be made up entirely of landlords and real estate agents
that way we’ll know for sure whether they’ll make the best decisions for renters
Actually....
Man sometimes it really is worth it to do a 3.5 second google check just to make sure you aren't running your mouth on something that's objectively wrong. Spare the embarrassment. Literally, first search result:
Megan Sandel, MD, is an associate professor of pediatrics at the Boston University School of Medicine as well as an associate professor of environmental health at the Boston University School of Public Health. She has held both of these positions for the last eight years, but has been working with the university since 2002, first as an assistant professor. She is the former pediatric medical director of Boston Healthcare for the Homeless program and the first medical director of the founding site for medical-legal partnerships, Medical-Legal Partnership-Boston. In addition to publishing articles and serving on committees, she is considered an expert in her field on the topic of housing and child health.
Seems like a great person to be involved on policy about how to keep people housed.
If you take *two seconds* to
If you take *two seconds* to look into this, you will see that she is also an associate professor of environmental health, and "is considered an expert in her field on the topic of housing and child health". Her most recent publication investigates household unmet basic needs in the first 1000 days and preterm birth status.
The operative words are, "..
The operative words are, "...after Baker leaves office." (which explains my Mayor's relationship and MBTA frustration woes with the ghost blow-up-doll in the State House).
Can someone help me out
Not sure if I am for, or against this (rent control).
I see the value of stopping the gauging, and helping renters in our city be able to stay in their homes. And do agree that something needs to be done.
On the otherside, San Fran has rent control, and has the most expensive and competitive housing in the country. It created a fix in the beginning, and a bigger problem in the long-term for them. Can a plan be created to avoid those mistakes?
Is Wu looking at building code, to increase housing supply (the only constant that would help housing costs is more available housing)?
Would appreciate more informed readers to comment to my thread regarding pro's/con's.
I'm personally against rent
I'm personally against rent control and here's why....
Anything that tries to artificially cap pricing is always hugely wasteful and inefficient. This is to say nothing of creating 'second-tier' housing in buildings throughout the city. Think of it this way, if rent control were to actually succeed, you'd have some people locked-in to low pricing, but that means the the landlord would never have incentive to do anything to keep up the unit. Additionally the landlord would then want some waiver to pay lower taxes, since his/her property value is below market level (due to low rent). If the landlord gets that, the unit becomes the 'slum unit' of the building as there's never incentive for them to do any work. If the landlord doesn't get a tax break, they'll want to sell it. Meanwhile, the city gets less property tax from these artificially low units throughout Boston.
The argument is that we don't have enough housing around Boston. I think there are better ways to solve this than rent control (which hasn't been successful anywhere it's been implemented). Here's what I'd do:
1. Create a real estate transfer tax that only takes effect for units sold within 18 months of purchase. That will eliminate the incentive for brokers to buy and flip, ensuring there are fewer empty units.
2. Increase Boston property taxes, but offset the increase for those with residential exemption (as that means they live here, are paying MA income & sales taxes). Use the bulk of revenue from this increase to build mid-tier (not luxury) buildings.
3. The state needs to force neighboring towns to relax their building codes (just as Boston has done) allowing apartment complexes to be built near MBTA stops. Adding housing should be a metro issue--not just something Boston is forced to address alone.
rent went down
Avg Boston rent went down when the Universities went remote, due to COVID. There was less competition for housing with the student population not returning to the city.
Why can't a solution be to have the Universities give back, in some way, towards this rent-cost issue in the city, given that their student body contributes to this issue, while they remain tax free institutions (and tax subsidized!)?
“Anything that tries to
“Anything that tries to artificially cap pricing is always hugely wasteful and inefficient“
Do you feel the same way about gas and electric rates? Shall we just let the utility providers charge whatever they want?
The key difference
The key difference is that the gas and electric companies are intrinsically monopolies because of the limited space under the public streets to install pipes and wires, with a very high barrier to new entrants, and therefore are subject to price regulation as a condition of being permitted to dig up the streets and install their pipes. Housing, on the other hand, has thousands of competing suppliers operating in a market that has very low barriers to new entrants.
Yes, that is a difference.
However adequate heat and housing are both public health issues. For example, gas and electric cannot be shut off for non payment during the winter, if there is an elderly occupant and I think also children and the disabled are protected.
Insurance companies are regulated, medical providers as well. Anyone on the other hand can become a landlord and pretty much do as they like with few restrictions. Yet, their product and services affect public health as much, if not more than the utility companies.
Insurance companies are
Insurance companies are regulated in sense that there is oversite in how they administer their policies. In the same way, landlords are largely regulated in terms of the building code and various laws protecting tenants.
Neither insurance companies' nor medical providers' prices are regulated or determined by the government.
Market structure is an issue
For good public policy reasons, some of which you cite, landlords and health insurance companies are more heavily regulated than, say, hardware stores. But the key difference between housing and electricity remains: at the end of the day you have a choice of landlords; you don’t have a choice of electric utilities. (Yes, you have a choice of suppliers, but you don’t have a choice of who actually runs the wires to your house and delivers the electricity). Hence the more clear cut case for price regulation in the latter than the former.
It can't be shut off if there
It can't be shut off if there is a baby under 1 or an elderly person. Other than that, off it goes.
No such protection from ….
…. cold weather evictions.
In condo conversions a judge can delay or deny an eviction in the case of elderly or disabled tenants. But developers got savvy long ago and make the purchase of property dependent on buildings being emptied of tenants prior to the sale. So sellers comply because they are not required give a reason for evicting their tenants.
Also, I believe the delivery
Also, I believe the delivery rates are regulated, but the supply rates are set on the open market. And you can choose your own supply company, but I've never heard of any competitive suppliers that aren't a total scam.
How about a vacancy tax? If
How about a vacancy tax? If your unit sits empty and unrented for more than, say, 4 months (unless it is empty because you are renovating it), you have to start paying vacancy tax on it. The tax should increase every few months, too.
There's a ton of empty units around town because developers would rather let them sit empty and write the losses off on their taxes than lower the rent. Same for commercial, actually, except it's even worse on that side. Incentivize people to lower rent.
Frankly, I think that rent control should be re-emplemented.
I think that rent-control should be re-instated. Here's why:
A) When rent control in Boston and elsewhere here in the Bay State was lifted, rents soared to outlandish and outrageous proportions almost overnight.
B) Rent-control protects the tenants by protecting against rent-gouging, and retaliatory evictions. This is not to say that landlords don't have a right to raise their rents when necessary, but if and when a landlord's costs go up, s/he has the right to raise his/her rents accordingly, but no more.
C) Rent control protects against retaliatory evictions of tenants. This means that if a tenant has a repair in his/her apartment that has gone undone for a really long time, despite a tenant's repeated requests to have a necessary repair done, the landlord cannot evict the tenant for making the reasonable request to make the necessary repair(s) on his/her apartment.
There is a fundamental question here
The fundamental question is whether, if you own something, we want to give the government the right to compel you to sell it for less than it’s worth. There are obviously gray areas, lots of nuance, and natural exceptions, but it’s still a pretty fundamental question.
The fundamental question is
The question here isn't about "something", it's about one very specific thing: rental housing. We as a society have already asked and answered the same general question in the affirmative for a variety of other specific goods and services (e.g. bans on price gouging).
A). When rent control was
A). When rent control was lifted, some rents went up quite a bit. They were ones which were held artificially low bec of decades of rent control. They went up to market rates.
B). As a practical matter, the rent control boards in the three cities never approved rent increases near the costs the landlord had to deal with (and I lived in a rent controlled unit; I'm aware of what went on).
Do you agree that all prices increases should be limited to only increases in costs?
Do you believe your wages should should only go up by the amount your expenses increase, based on you maintaining the same standard of living your whole life?
C). You're in luck. Such laws already exist. It's unmistakably clear a landlord cannot take retaliatory action against a tenant for pursuing his/her rights.
What is the mayor's plan to
What is the mayor's plan to prevent rich people from renting large below market rate, which they only use on occasion, thereby making the housing shortage worse? Or a single person keeping their very cheap 3-bedroom? It happens all the time in NYC.
And does she have anything to say about the extreme NIMBYism, supported by the city's zoning and the boards that enforce it, which is stifling the construction of new housing? I have an idea: roll back all zoning restrictions to how they were in 1922. The neighborhoods built then are still great places to live today.
They had better keep it simple
I don't know why Wu is constantly chasing policies that have already gone elsewhere. Anything rent-control related generally tends to lock the municipality into stasis as SF shows in the extreme case.
Portland might have not totally shot themselves in the foot, but we're still watching on that front.
Ultimately you need housing supply. Trying to control pricing too much just punishes newcomers to the advantage of those already there first (more NIMBY/vetocracy, broadly)
Those same people then often become trapped b/c they are afraid to relocate when it would suit their needs. Thus enduring awful commutes b/c they don't want to move, or can't b/c more and more people are avoiding moving due to the inability for price to fluctuate as needed.
I expect whatever comes out of this group to exacerbate problems more, because that is simply the norm with almost all attempts to control pricing that we see across the nation.
Deregulate zoning.
Rent stabilization, not rent control
@jorf - your dire predictions tend to be more of a problem with rent control. Rent stabilization allows increases - if done right, it would allow reasonable ones. But no one should have to worry about their rent suddenly increasing 50%, which currently happens and forces people out of their homes.
Except it's not "their" home.
Except it's not "their" home. It belongs to somebody else.
The real solution is homeownership. The city needs a way to poison the well for landlords to get them to sell their rental units to buyers who will actually live there. I think the cleanest way to do that is by levying a really high property tax rate on rental property. That will discourage people from hoarding more of Boston's property stock than they need. There are plenty of eager buyers.
Except it IS their home.
They live there.
It’s someone else’s investment property.
Except it’s not
The landlord owns the deed. The tenant is simply borrowing the property for an agreed upon monthly price.
Tenants do not borrow property.
Tenants are consumers who pay for a service and who have rights and protections under consumer law.
Tenant live in their homes. Being a tenant does not meant you are a homeless or unhoused person. Although without rent stabilization many are at risk for homelessness.
But no service is rendered
A physical thing is being borrowed. The owner always owns the deed to the property. You’re misconstruing these words.
Have a look at the laws.
You might get a better understanding.
This is not borrowing
The landlord sells the use of the real estate for the agreed upon rental period. Both parties have responsibilities to each other.
If the landlord converted the real estate to a condo then other laws kick in such as right of first refusal for the tenant.
A book is borrowed from the library. A mower is borrowed from a neighbor. Real estate and property are much more involved.
I wish them luck
I'm honestly interested in their findings. I'm skeptical that these sorts of interventions are beneficial as a whole but I could be convinced otherwise.
But perhaps more importantly, I'd like to see how well a committee of 23 people manages to produce anything substantial.
Missing information re: the Boston rental picture
The majority of residential real estate in Boston are owned by corporations that own large quantities of units. Owners of 1 or 2 units are a minority. In addition what were local concerns were voted on by the entire Commonwealth’s voters who had no business or interest in how rents were handled in Boston. Brookline and Cambridge.
It is assumed that increases in taxes and insurance will be passed into tenants. Legally a landlord can increase the rent only partially into a lease term if their costs is taxes and insurance increase. Foolish to do that but legally allowed.
A better version of a rent law would be tailored to the number of units owned by a landlord, including whether the landlord lives in the same building as with a triple decker.
Pulling a Swirlz
Show me your citation. I just quickly Googled this and found this statement in a WGBH story:
"small and medium-sized landlords make up almost 90% of all landlords and 44% of all rental units across the city."
I think you are confusing ownership with Property Management, which is an entirely different thing.
Is 44% not a minority? Also,
Is 44% not a minority? Also, that number includes both small- and medium-sized landlords, so small landlords owning 1-2 properties make up an even smaller share of the total.
Half as short a list would
Half as short a list would work just fine to diffuse any and all responsibility.
Eh?
Is “Half as short” the same as “twice as long?”
Expect limited impact with grand rhetoric
The way this will come out is probably something like an 8% cap on annual rent increases with an exemption for small owners and buildings with 4 units or fewer -- and possibly even for new apartment buildings, if they take seriously the risk of discouraging investment that rent control presents.
That may give it a chance of passing the House, but will likely protect few vulnerable people and instead create a class of relatively well off long-term renters, as existed in Cambridge back in the day.
Important to note that around 35% of the rental units in the city -- as either public housing or other kinds of affordable units -- are already hard-capped at 1/3 of tenant income or 30-90% of area median income.
“… but will likely protect
“… but will likely protect few vulnerable people and instead create a class of relatively well off long-term renters”
Sounds like a page torn out of the real estate industry’s propaganda handbook from back when they poured money into getting a statewide referendum to abolish rent control passed.
Even though the residents of Boston were overwhelming in favor of keeping it. Most of whom were low income, middle and working class and who are still losing ground. Landlords of small owner occupied properties lost as well.
Look who then profited from that! Real estate agents and speculators, mortgage lenders, absentee landlords and out of state and international property developers.
Couple more people on the committee
Kirk Sykes, Managing Director at Accordia Partners and Kim Sherman, President of Related Beal. The mayor's office says it left them off the list by mistake.
Left the big developers off for the first social media cycle
Convenient oversight.
I support both rent control
I support both rent control/stabilization and increasing the housing supply, and I'm not sure either one would work to bring costs down without the other. Famous failures of rent control, like San Francisco, failed to increase their housing supply, which is what allowed rent control to change from a broad benefit to a rich-kid lottery over time. Rent control seems to help for a few years, and housing supply needs to be dramatically increased during that window for things to work as intended. If the window is missed, things go south.