Councilor Morris Bergman
Councilor Moe Bergman
Moe Bergman - Moe
Richard Merlino - Rich
Moe: It’s a pretty tough act to follow, but I‘ll try. I do want to say something about Sandy Katz, too. Sandra, she’d come if she heard me say Sandy. I knew Sandy for many, many years not only as a friend but also as an attorney. I could share a quick story share with you because I was holding it off until I got the chance to speak, but it’s somewhat amusing, and I think it says a lot about Sandy.
I also own commercial property. That’s one of the reasons why as a city councilor, I take a lot of concern and interest in many of these landlord-tenant related issues, so I contacted Sandy about a personal question. I asked her if she knew somebody that could redo some hardwood floors in the building that we own, and she gave me names. “I don't know the person that well, but here’s a name.”
The person came and I went to check on the work at some point. I noticed something unusual. Not only did he not finish, which wasn’t that unusual, all the radiators in the building were gone. It was a time when scrap metal was pretty valuable. They had started the floors and taken the radiators out.
I called Sandy and I kind of told her what had happened. There was a little bit of a pause and she says to me, “I told you I didn’t know them that well.”
Moe: [laughter] That was Sandy. Nonetheless, I’ve been staring at my phone not because I have not been listening to what’s happening, but I wanted to read to you one of the reasons why I’m here. This is House Bill H1316. I don't know if any of you know it by number or even read it. It’s short, so I’m printing it out and handing it out, and I’m going to read to you.
In essence, it says the following, and I have a couple of different photos, so I’ve got to get to the beginning point. It says that, “Any city or town made by majority vote of its governing bodies,” I’ll ad lib, that’s the city council, “with three local ballot binding question, impose a limit on the size of annual rent increases for rental units within its jurisdiction.”
I won’t quote the rest, but I will just summarize it for you. This would apply to any unit that’s s three or more units, the exception being owner-occupied three units. It would also apply to anybody whose income is less than 80 percent of the annual income for the people living in the area. It would exempt government-owned buildings and it would apply to Section 8 portable vouchers.
Now it’s only been filed in January of this year and has not gotten out of the House Subcommittee on Housing, but it’s pretty ominous if it will ever come to pass. Now the rental increase you can impose is the CPI, which last year was 1.8 percent, so for $1,500 a month rent, that would give you a $30 rent increase or 5 percent, whichever is greater. That would give you a $70 rent increase. It would be renewable every certain number of years, so the city could decide once it imposes it to give it a termination date, but then it could be renewed thereafter.
Now I’m not suggesting it’s going to pass, I don't know how much weight it has, but I will tell you this, there’s been a lot of discussion about shortage of housing. Obviously, I was listening to the presentation earlier, a lot of tenant’s rights advocates, and the Statehouse says, “The balance of people advocating for the tenants certainly doesn’t equal the lack of people advocating for landlords.”
I want you to be aware of it because it’s something the city council would have to vote on, certainly not before because it hasn’t been passed, but oftentimes I think getting ahead of these things and letting your elected officials know that you’re opposed to it especially now in the election cycle is a pretty smart thing to do.
If you have contact with your city officials, if you want to have contact with you city officials, we’re all on a webpage. You should contact all of your city councilors, particularly the city councilors in the district where your property is located, and you should tell them that you’re aware of the proposed legislation at the Statehouse they have been advocating to pass. You do not want the City of Worcester to adopt, that’s assuming none of you wanted to adopt it. I’m assuming that his crowd feels that way.
When it’s been adopted in the past, it’s been a disaster. Cambridge had it; Brookline had it. You can go online. I’m not going to waste your time. You can go online and you can read the disasters, stories of what happened in those days.
I will also tell you that Worcester, as you all know, the market is finally picking off and it would be a huge bucket of cold water on the rental market if Worcester had a situation where rent control was imposed.
The dangerous part of this legislation more than anything else is it leads up to the cities and towns, I think. It’s not statewide because maybe a statewide level could be defeated, but there are certain cities and towns, Worcester being one of them, where I think there are strong tenant groups and a strong mindset about protecting those tenants’ rights and I think rent control is one of those issues that people could grab a hold of. Again, you should be aware of it now people give it some momentum. I think the plan now is to contact your city councilors again and make sure they know.
I’m happy to take questions because I’m throwing something at you that maybe of you may not be aware of. Was that okay?
Rich: Yes, absolutely. Who has a hand that [unintelligible 0:05:13]?
Moe: [crosstalk 0:05:11] right there.
Rich: Repeat the bill number.
Moe: I should know it by heart, but I want to make sure.
Female Audience 1: Yes. House 1016.
Rich: You’re showing off, Brian.
Moe: House 1316 is right.
Rich: Ding, ding, ding! You got that one passed.
Moe: Are there questions? Anybody? I’m sure there’s concerns, but—
Female Audience 2: Are you saying—
Rich: Would you mind using this, please? Thank you.
Female Audience 2: Are you saying it’s not in committee or—
Moe: It’s in the committee and state level, so it’s not before the city council. If it were to pass at the state level, it will be up to the cities or towns, the 371 municipalities to decide separately and on their own whether they want to impose this or not. I suspect some towns that don't have a lot of housing units would probably not care or vote for it, but a city like Worcester, we’ve got to be very careful on our toes. That’s for sure.
Female Audience 2: Thank you.
Rich: The good news is we’ve never –it has to be somebody who’s like in the middle of the room, right? No, I’m just kidding. I’m happy to come back there. Of course, I don’t shut up anyway, so I have something to say. We’ve actually never been better positioned than we are now to address some of these things. If this came up 10 years ago, we could have been screwed, right? We’re getting stronger. I mean, Doug, the organization that he’s putting together with the employees and volunteers, we actually have a fighting chance to be able to influence these things now.
Male Audience 1: My question is, if they’re look at this as a resolve or partial resolve to housing shortage and things of that nature, how does it fix it? We have a robust economy. By fixing prices at a certain percent that people can’t get increases, how does that change the number of units? How does that change the number of places that people can get? And so maybe that becomes our battle or our question for people that are considering this bill. How does that fix it? What does it do to address it beyond the fact of locking in the rate?
Moe: I agree with your logic, but you’re looking at it logically, not politically. There is a lot more than that, always the same. Oftentimes, unfortunately they’re not. there are lot of people that would rather have their rent locked in at a lower rate and they vote. They’re going to influence people whether the logic is there or not. As you state, it’s not going to create more units, but it’s going to make them pay less rent, so they’re going to advocate for it.
You have to advocate. The landlords have to advocate the logical position, which is it’s going to put a chill on the marketplace. It’s going to cause less people to invest in commercial property in Worcester. It’s going to cause a lot of I think mortgage problems with bank lending in people in Worcester because unlike other communities where they can have a reasonable return on their investment by virtue of rent and rent increases over time we wouldn’t be able to do that were this to happen.
Again, this is not happening now. it’s still at the state legislative level. It may never come to pass, but once it passes, if it were to pass at the state level, it’s something we have to deal with in Worcester. I’m suggesting, I know the politics in Worcester pretty well, and if I were betting me and I would say this would have a fair shot, if there isn’t an opposition ready to go and ready to advocate and hopefully ahead of time.
Rich: All right, other questions for Councilor Bergman? No?
Moe: Going once. There you go.
Rich: All right. Yes, we don’t want our first ever illogical law passed.
Male Audience 2: Thanks, Rich. I just want you to walk over here. I’m kidding. Moe, is the workaround on this bill, would it be to have let’s say a one-year lease with the tenant and then you’re executing a new lease the following year, so it’s a new tenancy. It’s not an increase; it’s a new tenancy.
Moe: It’s on the unit, not on the tenant. That’s what’s proposed.
Male Audience 2: Okay, got it. Thank you.
Rich: I’m not attorney. I could be completely wrong. It probably doesn’t matter, but the argument might be made that a tenancy doesn’t end until the people move out because that’s how the security deposit law is applied, so who knows.
Moe: If’ it’s on the unit, yes.
Rich: Yes, if it’s on the unit. Yes, it doesn’t matter.
Moe: The good news is there’s time to advocate against it. The bad news is if people don’t, it could take hold, and if it gathers some momentum, there might be enough voters out there to influence elected officials to seriously consider this. Again, you have your district councilors, your own large councilors, they own property in Worcester. You feel this issue is important to you. I think at some point, there should be some sort of formal resolution asking people where they stand on.
I just don’t think we’re ready for that yet, considering it’s still floating around the state legislature and folks like you guys haven’t had the chance to talk to your local politicians and let them know that this is floating out there. but I think at some point, once people get educated on the subject, city councils should be asked to seriously take a stand on this, so everybody knows where they stand. Hopefully, if the stand is against this, people at the state house know that some of the communities are really not excited about this. That may prevent them from ever passing, but it’s something that I want all of you to be aware. It’s something that’s kind of quiet now, but when it gets loud, it may be too late.
Rich: Well said. All right, we have time for one more. Did you have anything else that you want to—
Moe: No, that’s fine. I know you’re cramming a lot in. I’m more than happy to come back another time.
Male Audience 3: Just like a clarification as the unit and tenant. Does that mean that if I have a unit and I’ve been renting it for the last five years and $ 1,000 a month, the tenant moves out, and I can’t go out any more than the maximum, which is 5 percent?
Moe: CPI or 5 percent. If it’s a unit that’s subject. If it’s not an owner-occupied three-family building and it’s not a government-owned building, yes. That’s the issue: you cannot go up CPI or 5 percent, whichever is greater.
Male Audience 4: Because what I usually do is when a tenant moves out, that’s when I go up my rent, and maybe $50, $100 to catch up with the market value.
Moe: I’ll further look into that because the language is a little ambiguous on that, but I think I’m correct on it. It’s unit oriented.
Rich: Either way, it’s bad.
Moe: It’s bad. That’s right, it’s bad. So please stay on your toes. The city website has a list of elected officials and their phone numbers. I’m happy to come back maybe in the fall, later in the fall towards the end of the year, whenever you can have me back, Doug, and kind of update you on where we are on this. I think if you guys do your homework, I’ll do my homework, and maybe we could be at a point where we put something before the city council. I could file it, and some of you folks can come and advocate to what I would file, which would be a resolution opposing rent control in the City of Worcester, okay?
Rich: Fellow landlord and Councilor Moe Bergman. Thank you very much for coming.