MassLandlords sues Boston over rent control committee

2023-03-03 Business Update - MassLandlords sues Boston over Rent Control Committee

Resource Person:

Douglas Quattrochi - Doug

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Hi! My name is Doug Quattrochi. I’m the executive director of MassLandlords.

Our business update for today is we’re suing the city of Boston. Now you may have heard about this already. Basically the mayor has been working on this rent control proposal for a year now, and we filed a public records request back when the committee that was going to write the proposal was first created. First of all because we weren’t on it and we know a little bit about housing. Second of all because there were some concerning biases in the types of people appointed to it. I’ll get to that.

But in a second, let me just say thank you if you’re a member and specially if you’re a member who donates extra on top of dues. That’s how we’re able to do policy work here, so please join MassLandlords. Please become a property rights supporter by donating extra.

Let’s look at what the proposal that this Rent Stabilization Advisory Committee has produced. Ostensibly the marketing is, it’s consumer price index, CPI, or inflation plus 6 percent is the maximum amount a landlord can raise the rent on a renter on a given year or a 10 percent cap.

Now the mayor is looking for credibility by comparing the plan to Oregon, which has an objective inflation-based rent control system, but Oregon has no 10 percent cap, so right off the bat, we know that something is different here, and it’s not designed to help landlords survive during high inflation periods like in the ‘70s and ‘80s. It’s unfair from the get-go. But the thing about this inflation plus 6 percent business is that’s also completely bogus because what the city’s own staff presented at the city council meeting on February 21st is that a rent control board will have broad discretionary power to ignore the cap if a tenant raises habitability concerns or if there is any alleged change in service to the unit, and theoretically if a landlord needs to make repairs, they might allow rent increase, but that goes the other way, too, were if the repairs aren’t looking like they’re being made, they would disallow rent increases. It goes right back to the ‘80s and ‘90s, the rent control boards in Cambridge where landlords cannot operate housing.

Now when you look at who produced the proposal, you get some additional concerns here. Before I get into that, let’s just look at the kind of minutes that we saw in Cambridge.

We scanned three gigabytes of data from the Cambridge rent control years, and landlords had to do all kinds of work just to justify repairs. For instance, you see bullet point 13 at 12 looks like Jainwood Circle. They’re arguing about whether a sink and a toilet are necessary or whether they work what the rent increase should be. That’s not the kind of oversight that helps create new rental housing.

As a matter of fact under the rent control proposal, landlords would need permission to renovate, and even if we do get permission from the rent control board to do that, we’re still subject to rent control. On the other hand, if a developer comes in, knocks the building down, rebuilds it from the ground up, they don’t need a rent board permission to do that, and furthermore, they’re exempted from rent control for 15 years.

How is a landlord supposed to ever do a gut renovation under this scenario? The answer is landlords are not. If you look at who’s appointed to the Rent Stabilization Advisory Committee, this is just a list of the people on the committee who have donated to political races in Massachusetts the past, and the underlined folks have a particular interest in acquiring property and redeveloping it. More than half of the Rent Stabilization Advisory Committee and the proposal that it produced is geared towards helping people knock old buildings down, possibly under duress from a rent control board, and rebuild them for an exemption from rent control. That’s a big problem for us.

As a matter of fact, we asked the city of Boston to show the email trail that would explain how this came to be, how all those developers got put on the Rent Stabilization Advisory Committee, and the city said, “Well, here’s an email,” without saying there were none others, and of course, we know there have to be because some of those folks actually work with the city on other matters. We sued them, and we’re going to litigate this until we get every last email that we’re entitled to, Docket 384cv00483 in Suffolk Superior Court.

This is a huge credibility problem for the mayor of Boston. I think it’s raising a lot of eyebrows already on Beacon Hill, and it’s something that’s really important to understand because this is just one way in which we have a Baptist and bootleggers situation here. There are some folks advocating for rent control because they really want to help renters and they believe it’s right just like the Baptists of the Prohibition Era got intoxicating liquors banned. But on the other hand, you get some folks who stand to benefit in the business world with a rent control regime, and it looks like those folks are developers who are just like the bootleggers or future bootleggers of the Prohibition Era who nodded dissent to strict liquor bans. You have developers asking for strict control of gut renovations and landlords trying to keep their places from falling down.

This is a big problem for us, and it’s something that we want to call attention to here. We know from long experience directly in Massachusetts that rent control reduces the quality of housing, the availability of units. It has unintended disparate impact on the basis of race. It’s really hard to get a rent control department especially if you’re low-income or have poor credit, or any other housing barriers. In America and in Massachusetts no less, we have an unfair black-white wealth gap that really will disadvantage the folks this rent control system is designed to help.

We learned when rent control was repealed in ’94 it’s because state aid is reduced to surrounding towns when one city clobbers its assessments and therefore tax revenue, real estate tax revenue goes down in the rent control city, and everyone else has to pay to keep that city going. That’s why rent control was repealed and why it won’t pass again. Of course, with all these just cause evictions stuff, it’s really impossible to enforce house rules like no smoking. You basically have to rise to the level of strict evidentiary standards in all matters, getting witnesses, and it’s very difficult to do in the court. All of this combined is designed to distress properties, for small landlords to sell, and turn his real estate over to the developers for some different use.

Of course, we’ve written about all these aspects on our own page. These articles are pinned there. I hope you’ll educate yourself and tell others about this. This is a really important matter that we’re working on. We’re going to keep you up to date as the situation develops.

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