Rent Control and Rent Stabilization Lived Experience

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Webinar: Rent Control and Rent Stabilization Lived Experience

Full transcript below.

Rent Control Lived Experience Full Transcript

Resource Person:

Linda Levine – Linda

Host:

Douglas Quattrochi - Doug

Technical Host:

Naomi Richardson – Naomi

[Start 0:00:00]

Presentation

Doug: Thank you very much for being with us this afternoon. My name is Doug Quattrochi. I’m the executive director of MassLandlords. Our technical host today is Naomi Richardson, and then we're joined by a very special guest, Linda Levine. She's a Cambridge landlord and has been a landlord since the rent control years and lived through what rent control was like when we had it in Massachusetts. Her volunteering was in fact instrumental in defeating rent control in the 1994 ballot initiative, which is why we don't have it today unless the city or town is going to reimburse owners for the damage rent control causes and that's the law that Linda helped get past. She's been our MassLandlords record scanner, working with the Cambridge Historical Commission to scan all the records from the rent control years and she's here with us today to share her experience living through rent control. Linda, take it away.

Linda: Thank you so much, Doug, and welcome to friends, neighbors and I don't know if I have any family members listening in, but I’m happy to see you all. Rent control is a term that we've used for many, many years and recently Mayor Wu’s administration has tried to rebrand it as rent stabilization, so you may hear it called rent stabilization. But I just want to say that their branding of rent control is rent stabilization probably has not been very successful because if you listened to the news recently, most newscasters call it rent control.

Rent control in Cambridge was originally instituted in 1970 as a temporary emergency measure—

I’m going to go to my next slide.

This was the house that I lived in actually as a rent control tenant starting in the early ‘70s. I lived in a three-bedroom apartment with two roommates.

I didn't want to go past that yet. Sorry. I want to go back.

Doug: It looks like it keeps going forward, huh?

Linda: Yes, it's going forward but I’m going back. I want to go backwards [chuckles].

Doug: Try the left arrow.

Linda: Here we go.

Doug: You got it perfect.

Linda: Okay, yes. It has a mind of its own.

The picture on the left is a sort of an aerial view of what the house looked like with the asbestos shingles full of mold and there was a hurricane fence in front, asphalt driveway not driveway asphalt walkway and it was falling apart. This house was originally built in 1861, so you can imagine that it has a lot of mileage on it, and as a tenant it was kind of bare bones but the rent, it was rent controlled rent and I was saving money. I was happy.

I had an opportunity to buy the entire house in 1986, and the family that I bought the house from had owned this house for 75 years. It was a rent-controlled house. I knew I was going to be getting rent control rents, but the numbers would not work out as far as buying it even back in in 1986, so I had to sell two units, and in order to do that had to be converted to condominiums and the former owner helped me do that. She actually did the conversion, and I sold one unit to a friend of mine. She may be on this call, I’m not sure. She's been living there with her husband ever since 1986 and I sold the other unit to a tenant who had been living there, a Russian couple who lived on the other side.

The house was basically a two-family house when it was built and was converted to five units some time I think in the ‘50s, probably in the 1950s. It made it kind of difficult though because five units is commercial real estate. That means that your interest rate is going to be higher when you buy it. Jimmy Carter was president at that point and if you may know that the interest rates were a lot higher than they are today. Probably I think I was paying about 13 interest on a mortgage, so I ended up with the unit that I lived in. I sold the former owners’ unit to my friend and then I had two rent-controlled units, which were called hybrid units. By the way, this is how the house looked in the 2021, a couple of years ago, and I’ll explain what hybrid units are later.

The reason that we got rent control in all of Massachusetts in 1970 was there a lot of pressures. There was university expansion. The rents were generally going up. There was urban renewal, which Michelle Wu is basically trying to get rid of right now, and there was a big highway being proposed. We called it 695 and they were doing a lot of land clearance. There was manufacturing job loss and the Vietnam War, there was a lot of social unrest at that point.

[0:05:24]

By the way I came up to Boston from New York in late 1969 to go to BU for graduate school, and I had never heard of rent control. See? This was a another one of the pressures that that changed the political atmosphere. The 18-year-olds got the right to vote, and this was the root of the proposed Highway 695 and it was going to go right through Cambridge.

You can see the remnant on this picture. The highway never got built. This was Interstate 93, and there's this they call it the ghost off ramp. This was BU in 1970. These are pictures I took. There were all kinds of student demonstrations, and there were very active demonstrations, anti-Vietnam War, and peace demonstrations.

Rent control was supposed to be a temporary measure and then Massachusetts has something called home rule. It’s the right of cities and towns to fashion their own solutions to local problems. The goals of rent control, it was supposed to be originally a consumer protection act. They were trying to prevent excessive profits. This they did rather successfully, but they helped to maintain an appropriate level of quality in the rent-control stock. In order to do this, they couldn't let people do too much renovation or they would be gentrification, which was a very dirty word as it still is today in many circles. Another goal was to maintain diversity.

This was the Enabling Act 1970. The tenant organizers put a great deal of pressure on the Massachusetts legislature, and this only applied to cities with over 50,000 people and you were allowed to limit the rents in buildings constructed before 1969. After 1969 or maybe 1968, you could do anything you wanted. You could charge any rent that was the market rent. It also did not apply to owner-occupied three families or under.

But you only had five cities who adopted this rent control. As you can see Boston had it, but they instituted vacancy decontrol in 1974. Somerville had it, and they repealed it in 1979 I think because the homeowners had control of their city council at that time. Cambridge alone had the very strictest form of rent control. Lynn had it; it was repealed in 1974. Brookline also had it, and they decontrolled most of it in 1991.

Now this man, Robert Moncrief, was a city councilor and he explained. If you go to YouTube and you Google Cambridge inside out, you can hear an interview with Bob Moncrief. What he said was, he said it was a different world at that time. Lyndon Johnson's model cities were great. Landlords were wicked and no one studied anything. He later changed his mind about rent control and actually wrote a really wonderful monograph about the ending of rent control. He was a lawyer by training and he wrote a wonderful monograph, which you can find on the internet.

This was the Cambridge Rent control board and they were not elected. They were appointed by the city manager. There were two landlord representatives, two tenant representatives and then – the picture the woman here was a one family. She lived in a single-family house and she was supposed to be neutral.

[0:10:10]

But the rent control regulations, they start small and as time went on, more and more regulations were passed, and you can see the history of this if you get to read any of the scanned documents that we found at the Cambridge Historical Commission because there's a history of all the minutes of the Board meetings. By 1994 when rent control ended, there were 103 pages of regulations.

Now the thing is that it wasn't so simple to go up to the rent control board and get your rent adjusted. You had two choices. You could wait for a general adjustment or if you did a lot of work on the house and you thought you had spent enough money and you wanted to get a different kind of adjustment, you had to get an individual adjustment. This is what I did at first because this house, as I showed you the picture of it, it was neglected in many ways and needed a new roof, o that was one of the first things I had to do. I was in love with watching this old house, and I thought it would be great fun to do a renovation and do something to make to bring it back to historically the way it might have looked when it was first built.

What I learned was that when you go up to the rent control board, it's a quasi-legal body and they had the power to legislate, make the laws. They had the power to administer them, and they had the judicial power. There were hearing examiners and there were legal counsels, and what we learned very quickly is that they were pro-tenant. Rules of Evidence were being applied and going in front of the rent control board I would say was go a little bit like going in front of the Inquisition. They looked at every receipt that you submitted down to the penny. I think it was probably much more difficult than an IRS audit.

Most landlords were just not prepared this kind of adversarial nature. They thought, “Well, you know I’m providing low-cost housing to the city and this is how I’m treated. Not well.” You've probably heard this quotation about justice and I just wanted to explain why I went from being a rent control tenant to being an advocate to get rid of rent control.

The tricks of the trade were to delay rent increases, so in 1987, I applied. I didn't want to wait for the general adjustment. I went to the rent Board and I thought I can fill out a form, but I submitted my form and I waited a few weeks and I didn't hear anything so I called them. They said, “Oh, we can't find your form. Be patient,” they said. “First, they said, “be patient. It takes quite a few weeks.” That was in February of 1987; in March I called them and they said we can't find your application. Then I called them again and they said they can't schedule the hearing without my deeds. Okay, I gave them my deeds; then they told me well we don't really need your deeds. Then they said they can't schedule my hearing because they were working on the citywide general increase.

The hearing was finally scheduled for September 2nd. Then they continued it I don't remember why. The second hearing was scheduled because they said they needed more documentation. Then they sent a letter, advising me about the hearing and they mailed it not to me but to my neighbors. I finally had a hearing before the rent Board almost a year later. I wrote January 20, 1988. So then what the Board does is they set interim rents and they didn't approve the way the rents were apportioned because we were condominiums. So they said they needed another hearing.

They said they sent a letter about the increase to me about interim rents and guess who they mailed them to. They mailed them to Mount Vernon Street instead of my address on Mount Auburn Street. I finally received it on February 2^nd. Now you might understand why justice is delayed, and rents that I was collecting in the beginning were $212 and I think $230 and that included heat.

One of the things that you'll begin to learn if you can if you read the minutes of the Board is how they decided some of these things like your what to do with legal costs and even today legal costs are you know at least $200 to $375 an hour, but they wanted to include legal costs in your administration fees, which they gave you 6 percent. We didn't feel that was fair.

[0:15:36]

By the way after my experience with trying to get a hearing to get my application for a higher rent, I began to think this isn't quite right, and I thought you know maybe there are other people who are having similar problems to what I was having. Sure enough, I found a group and they were calling themselves the Small Property Owners Association and they were just a handful of people. We met in somebody's living room in Cambridge.

One of the other things that we began to understand is something called fair net operating income, and we were supposed to be guaranteed a fair net operating income but guess what? That didn't include your mortgage, so we began to question some of these things, and then in 1975 the old Rent Control Act was due to expire, but Michael Dukakis was the governor, and the rent control was extended.

Now another thing that was happening around the same time is that there were a lot of condominium conversions beginning to happen, and there was a lot of controversy about how good this was for the city and for the state, and a lot of people wanted to prevent it. But of course rent control owners wanted to get out from under rent control at that point, so it enabled a lot of rent control tenants to become owners and I was one of them.

These are some of the buildings that were converted. This is a typical rent-control buildings in Cambridge, and of course the rent control advocates were totally against this because it took rent-controlled units off the market, so they passed a new ordinance. This ordinance was to restrict the removal of units rent-controlled units specifically from becoming condominiums, and I was able to circumvent this because the two units that I had remaining were called hybrid units. It meant I could rent them, but should I ever want to live in it myself, I could not. It had to be rented.

This was a man who was a city councilor. His name was Bill Walsh. He was a lawyer. He was a very aggressive and Loud advocate and anti-rent control advocate, and an advocate for the owners. He made a lot of noise, and there hasn't been a city councilor I think since Bill Walsh who's been as much of an advocate for owners. he was called the Mini Condo King and he was a real estate developer. He got into a lot of trouble because as you know real estate goes up and down, the value goes up and down and he probably expanded too much and he fell under pressure when the values went down and he got into a lot of trouble. That's another story in itself because he did end up in jail for a time. By the way, he passed away quite a few years ago.

SPOA was formed and this was the very beginning, the first letter about SPOA. We tried to get more members, which wasn't hard. We had many, many meetings. We had meetings at the city council and we came up with a list of reforms. There was a subcommittee, but basically they were just letting us talk. Nothing was going nothing was going to happen. The city council had a majority who were tenant advocates, advocates for rent control, and they had us they had us in their iron grip.

We were organizing at that point. One of the things that we began to learn is that tenants were basically opposed to the ownership of private rental property. It was fine to have government ownership of it, and I would say it wasn't just the tenants. There's a group of people in Cambridge, who are basically ideologically opposed to it, and you'll probably find this still today.

[0:20:17]

We were very excited when the city council voted to have Abt Associates do a study on the rent-controlled tenants. At that point we were suspecting that the rent-control tenants were not the elderly, families, and low income as was originally proposed that this was this was who rent control was supposed to benefit. Abt Associates did their study, and basically it was a masterpiece of politically satisfying both sides, and we were kind of disappointed. We thought this is going to be this is going to show that rent control is really a sham.

So in comes another person, this man named, Arthur Maringas. He owned a three-family in Cambridge and he was born in Massachusetts, but he lived in California, came back, and lived in Massachusetts, lived in in Riverside and Cambridge. He was a federal auditor and he began to look at rent control in a different way. He was looking at it from the point of view of assessments, of rent property assessments. “Gee,” he said, “my property is assessed this amount, and I’m looking at a six-family down the street and it's a beautiful house on a much bigger lot and it's assessed for much less.”

He began to look into it, and what he did was an entirely different kind of approach than the Abt Study. The Abt Study apparently was a random study. They chose I think it was 545 different rent control units. Mr. Maringas went down to the rent Board, and by the way, computers were being used of course, but there was no internet. He looked at every single unit that he could find and he began to cross-reference them with property tax records, voting records to see who lived in units, census records, and he found basically what we what we're really suspecting.

He said that there were 296 doctors who lived in rent-controlled apartments, 250 professors, 298 lawyers, 2,650 students, 220 engineers, and by the way the number of rent-controlled units he found was like close to 19,000. One of the things that he said was the rent control board has no idea how many units there are. They thought there were only 17, 000 something units, and he was very critical and we were jumping up and down thinking Mr. Maringas has exposed what's going on, but this was just presented in front of the city council. Basically, the city council they listened but that was about it. It went nowhere um Mr. Maringas had lots of findings.

He was auditing government contracts, and he said you know what the Abt Study did would never fly. I have much more faith now in government auditing. He said the public assistance program at the rent Board was totally unregulated and he said how much he said basically property taxes were subsidizing rent control tenants. How much, he didn't know how much, but you know and he said the city council and city of Cambridge have no idea what that number is.

The landlords and the SPOA were still trying to do political organizing and we got this thing called Proposition 1,2,3 on the Cambridge ballot. It lost badly because there's only about a third of Cambridge are owners and the rest are tenants, so it was defeated by a large margin and that also was very bad for us because there was now a 6-3 pro-tenant majority of the city council.

There were a lot of rent control stories and you may have heard a little about them. This is uh this is a picture from today. These are condominiums now on Broadway in Cambridge, but in 1988 the rents were only $150 to 4190 a month if you can believe it so the owner decided he would rather keep them vacant. I guess he had enough money from other sources, so the tenants decided these would be great apartments for rent control and they moved squatters in and they said we'll do the repairs that are needed. Guess what, the city supported them. These two pictures are from the same building. This is how the building looked basically 1965. It’s from the Cambridge Historical Commission collection. The picture on the right is what I took last year, a picture I took so these are condominiums now and you can imagine these are assessed for you know whatever condominiums go for now in Cambridge.

[0:25:50]

This was another very famous case in Cambridge. It’s called the Petrillo case. This is their three-family house, and they had an apartment in the basement they hadn't rented, and then their daughter needed a place to live when there was a fire in her house. Their daughter moved in and the rent control board someone ratted on them basically and said this is not a three-family house anymore. It’s a four-family house, so they had to come in front of the rent control board and the rent control board decided yes this is a four-family house and now you're under rent control and guess what the ceilings aren't high enough in the basement. It’s not considered habitable. They ordered the Petrillos to lift the house up basically. A couple of weeks later Mr. Peter Petrillo had a heart attack and died.

Another famous case, there were criminal charges for leaving an apartment vacant, and this man was fined and also sent to jail.

Now SPOA is still trying to get rid of rent control and still trying to prove that there's something wrong with rent control in Cambridge, so we commissioned Rolf Goetze to do this report in 1994, and the title says it all, Affordable Housing not for the Privilege, Not for the Poor. By the way, all these things are scanned. He basically found what Arthur Maringas found that the rent control tenants were not very diverse. The market tenants were much more diverse, I say much more but they were more diverse, and rent control was not doing what it purported to do. it kept the rents low, but that's about it.

About that time SPOA was trying to figure out a way to get out from under rent control, and we talked about doing a lawsuit. By the way, Bill Walsh said don't do a lawsuit. We got advice from him. He said it takes much too long to have a lawsuit and he said I think your chances of winning are small. We did it anyway. SPOA raised $150,000. We claimed it was unconstitutional, but we lost on summary judgment and at that time Question Nine passed so we dropped it on appeal.

Some of the other things that rent control did is one of the thing is called eviction control. It meant that if you wanted to evict someone, you had to go to the rent Board first before you could go to Housing Court, and you could not evict for cause like if you wanted to put your daughter in a rent-controlled apartment that you owned and you wanted to evict a tenant, you had to go to the rent control board and chances are they would rule against you.

We tried picketing. Barbara Bush was speaking in Wellesley. I’m in this picture by the way on the on the far right. These are actual signs that we pulled off of signposts in Cambridge. The gap between the rent-controlled rents and market rents was growing at a ferocious rate at that point, so the rewards were high. Since there was no social media, we wrote letters to the editor and we flooded the media with letters. This is just an idea of a few of the letters.

Now we have another one of these horror stories. You've probably heard of this one. This was the Bologna case. Vinnie and Laura Bologna had a beautiful house that they renovated. Basically Vinnie Bologna said he evicted raccoons before he could do the renovation and they filled up I don't know four or five dumpsters worth of material and then Vinnie and Laura were a young married couple. I think they had two very young children at that point. They lived in the back in the carriage house and they rented out the front of the house.

[0:30:15]

This was part of that story. They had tenants who decided to sublet and rent-control tenants were allowed to sublet at market rents. There was nothing wrong with that apparently, according to the rent control board. Apparently Vinnie and Laura did not have a very good lawyer to start with, and they had $100,000 in fines and it was just a nightmare for them and they ended up declaring bankruptcy and moving. Much happier story, they’re grandparents at this point, four children and grandparents living in Lexington, I think.

We kept writing op-ed pieces. We kept writing letters, and this is a picture of a famous house, famous to us anyway in Cambridge. This was Chester Cooper's house, and he used his house as a billboard. As you can see, he wrote, “Welcome to Cambridge. Abandoned hope all ye who plan to buy property here and beware of rent control.” The city tried to get him to take down the signs, but they couldn't. By the way, his house was right on as you get off the Mass Pike on River Street, so it had great visibility.

This is one political theory as to why we could do nothing. It’s an old political theory called the Iron Triangle. Some people would say rent control was basically about control, control of everything. You had the legislate legislative body, which was the Cambridge City Council, and tenants had a majority of the seats on that. You had the outside lobby, which was one was called the CCA, Cambridge Civic Association, Cambridge Tenant Union. They had eviction free zone and all these people were orchestrating who were not elected and then you had the bureaucracy, which was the rent control board. By the way, the city uh the city manager is appointed by the city council so he could only do what the city council drives him to do. This is one explanation of why we had to do something else.

This is another famous landmark in Cambridge. This is the house, it was owned by a fellow named Peter Valentine, and Peter Valentine as you can probably guess was an artist, and he was also a very eccentric and rather strange character, but he was a rent control tenant and this was the house he lived on. It was an MIT-owned house, and it was on a site that MIT wanted to develop. MIT was able to get everyone else to move but Peter, so Peter held out, and MIT moved his house. This was I think a three-family house. They moved it to another lot. They renovated it for him and Peter lived here and he painted the house with his poetry, which a lot of people come and visit for his poetry and his art, but poor Peter died sometime last year. I guess it's questionable as what's going to happen to the property. He didn't have any children, but he did have family.

As I was explaining about the Rent Control Ordinance that said you could own your condominium but not live in it, they weren't enforcing this this ordinance, and a lot of real estate agents and some people think real estate agents, so hundreds of these units to unsuspecting owners. They just said, “Well you know you can do. They're not enforcing it.”

One of those owners was the fellow and his wife on the right, Jon and Maria Maddox. They were living in this building on Ellery Street. It was a 440 square foot condo. This was 1983, and at some point the rent control board came under pressure to start enforcing this ordinance so these people became called condo criminals. Jon and his wife got worried. Jon was a lawyer. They got worried that they were going to be in trouble.

We had learned about doing initiative petitions and Barbara Anderson was one of the early people who advised us and said this is what you should do, but it's a big deal to do an initiative petition, and at that point we really didn't have that many members. You need an oodles of money. I think these petitions basically comes down to needing about $1 million to do them, which of course we did not have. We were rent-controlled owners. But we did join up with the large owners who in the end did help us.

[0:35:30]

We put this petition out and we thought, “Well, we'll try. We probably won't win the first time, but we'll get some experience and we'll know how to do it the next time.” But well, I’m skipping ahead.

This is this is another one of the pieces that we had that we that we commissioned and as you probably all know, anyone who writes about rent control is from an economic point of view is against it. It doesn't work for so many reasons, a few of which I’ve enumerated. By the way, the houses were falling apart at this point. There was very little investment. If you had a rent-controlled house, you did only what you had to do so if you walked if you were to drive or walk around Cambridge at that point, you could tell which houses were under rent control. They looked terrible. They were falling apart Jon was not a member of SPOA, but he became a member and he wanted to learn about the lawsuit that we had started. He actually wrote this initiative petition and he did it for us pro bono. This is Jon and Maria today. We came up with the name Massachusetts Homeowners Coalition. Denise Jillson, who was president of SPOA at the time, stepped down, and she headed up the campaign, and I became a co-president of SPOA at that point and the petition was called Question Nine. It’s not easy to write these petitions, and it went through a couple of iterations before it was accepted by the Attorney General Peter Sachs.

Rent control ended, a story you all know, and when it ended, if you were low income, you could apply for protection and what the legislature did was and Governor Weld and we all agreed there's going to be two years before rent control would end for people who were protected. Of all the people, who applied there were only six percent who needed the extra protection, so this guy did not fall in, they were not homeless on the streets because of this. In fact, you can ask any real estate agent many of the formerly rent control tenants bought property in Arlington, Somerville, and a lot of other cities nearby.

This was a silver bowl that was given to me. It says, “From Bondage to Freedom.” We were also admonished not to raise our rent suddenly now that we could have market rents as long as he didn't have somebody in your apartment who was elderly or had applied for the extra protection and so the city gave us a citation for being very, very mild about.

Now the tenants of course we're doing things, and this was a little booklet, which I think we will scan this little booklet, too, it's The Secret Of Question Nine by somebody who wrote about the end of rent control and one of the things that you have to understand is some of these people are still active. this Steve Meacham has been active since I was active and he's a professional. He’s a social revolutionary, a member of a small national organization called Freedom Road, to which he recruited other eviction-free zone members and that was something I pulled out of this little booklet.

Now the tax base is something that Arthur Maringas was talking about, and I won't go too much into it but it was very depressed because of rent control assessments and one of the things that was studied later was what was that number. and this this study goes back to 2005 which was right now quite a few years ago. It was an MIT study and they found that Cambridge gained $7.8 billion in appreciation on rising assessments.

Now I think you all know that Cambridge is today a very, very rich city in part because of the commercial development and the biotech in Kendall Square, but back when rent control was on, I was told that Cambridge was near bankruptcy and you'd have to ask somebody else about that.

[0:40:26]

I have some takeaways. First of all rent control will not stay mild and no matter what happens in Boston, no matter what they're proposing right now, someone is bound to start saying well we've got rent control now, and we don't believe that whatever they say is going to happen now is going to stay that way.

I forgot to say Cambridge called it rent control. Boston started calling it rent stabilization. It's basically the same thing. Boston was trying to rebrand it because rent control has such a taint to the name, but if you listen to the media, the media is calling it rent control, so I don't think the rebranding is particularly working. The property taxes will always be higher on non-controlled properties, and they had condos. Condos were forced to be tenant occupied.

Rent control hearings were adversarial, and that's because our legal system is adversarial. By the way, I’m saying RC/RS, rent control/rent stabilization, is going to be on all non -owner-occupied singles and multi-family so if you own a single-family house at least in Cambridge and you moved away for a time, your property will come under rent control. The other part of it was as we suspected and as you could see from the numbers that I showed earlier, the tenants became much more professional. They were the doctors. They were the lawyers. They were the professors. That's because landlords wanted to be sure they were going to get their rents, and the city could not control that.

This is a picture that I took only in October, and as you can see this is a tenants’ group and they were demonstrating in Harvard Square at the Oktoberfest and they're calling it rent control.

That's the end of my presentation. If anyone has questions, I’ll try to answer them.

Question and Answer

Doug: Sure. If you have questions, type them into the Q&A. As a matter of fact, it looks like chat has been off, so I’ll turn that on as well. if you can't find the Q&A box.

Linda: The box is not there.

Doug: Yes, that's fine. Thank you, Linda. You should now be able to chat with everyone. If you have a question, you can put either in the Q&A or the chat. While you are thinking about what you want to ask and typing, Linda maybe I could ask a couple questions to get started.

Linda: Sure.

Doug: So the ballot initiative that ultimately ended rent control didn't really succeed in Cambridge, right?

Linda: Right.

Doug: Folks in Cambridge still voted against that, so how did how did the statewide ballot initiative and rent control in Cambridge?

Linda: Well it ended it for the whole state, so that's why it ended it everywhere. There was still rent control in Boston. I forgot to mention something very important, and that is our petition allows for rent control, which you haven't been hearing, but you can have rent control but the city wherever it is has to subsidize the difference between whatever the rent control rent is and the market rent. I think that word has to get out.

Doug: Yes, exactly. Those are kind of like really two important takeaways from that ballot initiative.

Linda: Yes.

Doug: It was drafted in a very sensible way that says if you want to really do this, if you want to have rent control, you can.

Linda: Right.

Doug: This is currently the law in Massachusetts, General Law Chapter 40P says…

Linda: Right.

Doug: If any city or town wants rent control, you can have rent control but you just have to pay owners for the difference between the rent you’re charging the tenant and the actual market rent for the unit.

Linda: I haven't heard anyone in Boston saying this, anyone in the media. This word, really it would be great to publicize—

Doug: Yes.

Linda: That we do have, we can have rent control.

Doug: Yes, absolutely, and so that combined with the fact that Cambridge had artificially reduced its assessed values and its tax base and its municipal income meant that Cambridge was getting an awful lot of state funding through the state aid formula.

Linda: Absolutely.

Doug: And so when that words like when Denise Jillson was out way out in Pittsfield, putting signs up and down the road there, when she was out there she was telling people and all the rest of the state that your taxes paid locally are going to subsidizing Cambridge's failed rent control system.

[0:45:13]

Linda: Right.

Doug: And that's really what opened people's eyes to the need to repeal rent control.

Linda: That was one of our big arguments and also the eastern part of Massachusetts is much more progressive and leftist than the rest of the state, so once you get out to the middle part of the state and the western part of the state, they understand this much more and they basically carried the referendum question.

Doug: Yes, absolutely and that's something that renter advocates still say like on the radio we've heard Jim Braude say, “Oh, people in Cambridge wanted rent control. It’s so unfair that the rest of the state said we can't have it.” [chuckles] But I mean the rest of state was paying for it so there's a reason they said—

Linda: They were paying for it, and tenants all they had to do was come out and vote when they were rent control attendants. Vote for the city councilor who was going to keep voting for this.

Doug: Yes.

Linda: They didn't have to do anything else.

Doug: Very easy—

Linda: I mean it was it was a great deal, and it was a tremendous savings for tenants. By the way rent control, didn't solve any of the problems that the housing emergency, there weren't enough apartments. One of the other things I just wanted to talk about there was one other paper. We found it at the Cambridge Historical Commission that was a terrific paper that never got publicity. It was called Rent Regulation in Cambridge by Jenny Netzer. She called it um a policy analysis exercise, and I’m guessing she did this when she was at the Kennedy School probably as a student, a master's degree student. She is now big time. She has her own consulting firm, and I tried to write to her about it, but I didn't get an answer. It’s about a 70-page paper, and if anyone wants to get a good feeling as to an overview of what this was all about, she did an excellent job and this is part of the scanned documents I’m sure Doug will have it up on the rent control website or—

Doug: Yes, thank you for prompting me. So we've collected all of your work and we're going to (A), analyze it to produce some summary reports, but (B) create a couple websites. One's going to be an impartial archive of all the records without any kind of summary or advocacy and then there's going to be a no rent control Massachusetts website coming up.

Linda: Great.

Doug: So we do have some questions from the chat here.

So DS asks, “How is it legal for a government to select a certain group, in this case landlords, to pay or subsidize somebody's cost of living? Why would this not be a ballot that our taxes would subsidize people rent this way?”

Linda: Well, it is legal and that's what we're trying to show in our lawsuit, which lost. By the way, Biden now is proposing some kind of rent control, which I just saw for the whole country, and I was talking to one lawyer who told me that he thought that would be unconstitutional for private landlords, that maybe he could do it for federally subsidized landlords.

Doug: Yes, that would be interesting because during the pandemic, they declared a federally involved property was anything that had been underwritten by Fannie Mae or Freddie Mac, which is basically most mortgages.

Linda: Right, yes.

Doug: Alan asks, “In cities with residential exemptions, could this mean that those owner-occupied units, who think that this won't affect me, that those property taxes will increase for them?”

Linda: Well, you know it depends on the assessment like what happens if you're assessed and you don't like the assessment, you have a form you fill out and you ask them to look at your property. I’m not sure if I’m understanding this entirely.

Doug: Yes, no I mean basically Allen's point is if somebody thinks they're an owner-occupied landlord and they're not involved here, that's wrong because the rent-controlled properties will be reduced in assessed value while the uncontrolled properties will go up in assessed value and so everybody ends up paying for the rent-controlled disaster, so.

Linda: Yes, absolutely, absolutely. You're paying for it even if you're really clear that you're paying for it.

Doug: Yes.

Linda: If you're a non-rent control owner, landlord.

Doug: That's right. So that's a very good point to share with folks, Alan.

Linda: Yes.

Doug: Brent asks, “Is the rent control with city paying landlord the difference between market rate currently in place?” So you know Chapter 40P does anybody have a rent-control system?

Linda: I would say no. I haven't heard of anything.

Doug: Yes, and the reason is because they're trying to shift the apparent costs of their program, so they don't want to actually pay for it. Most cities would not be adopting that.

Linda: For sure they don't want to pay for it.

Doug: Yes, but then Brent's follow-up question is, “Can city councils reject a rent control scheme under 40P?”

[0:50:02]

Linda: Yes.

Doug: Yes, it's totally up to them.

Linda: It depends on your city council, either alderman or the city councilors and yes. By the way, Alan I saw I think um Alan is right about the mobile parks. They do have rent control.

Doug: Yes, mobile parks. So mobile homes are an interesting and perhaps different question because in the case of like if you own a significant asset, maybe represents your entire life savings, which is your home, but you're renting the land on it, maybe there's a different expectation there. But certainly if the asset isn't even yours like in the case of rent control for apartments, the owner owns the land and the building. It’s much more clearly economically a failure.

Yes. Alan asks, “Can anyone supply a list of current rent control activists who own and rent to middle or low income who are not family?”

I’m not sure I understand your question, but people like who support rent control who say they're landlords.

Linda: Yes, I think that's what he's getting at [chuckles].

Doug: Yes.

Linda: But I don't think there's a list, and I think it's small if there is.

Doug: There are a few people at City Life/Vida Urbana who seem to have acquired property specifically to say that they're landlords, and as a matter of fact they provided they provided testimony during the Rent Stabilization Advisory Committee, which is something we took note of, claiming to be landlords but not actually landlords.

Linda: That's really interesting.

Doug: Yes, well they're not because they're landlords. They might be actually landlords, but they're there because they're city life lobbyists. Yes okay.

DS asks, “Should we raise rents now to get ready in case rent control takes effect in Boston?”

Linda: Well, that's very interesting because when rent control went into effect in 1970, they rolled rents back. I think they went back to 1967 to get a year when they thought you were getting fair net operating income, and then they rolled rents back, so they could do it again. Beware.

Doug: Yes, and it has been filed in the legislature, not the Boston proposal, which is still not written down not publicly anyways, but there have been previous proposals to roll rents back. So if you want to raise rents, just make sure they're at market and that's probably the best we can do at this point.

Linda: Yes.

Doug: Yes.

“Are there any tenant activists who own rentals with their own money?” Alan asks.

I mean we don't know them. If you're aware, then let us know.

Then Anonymous asks, “What's the difference between rent control and Section 8, Home Base, and other programs? If it's paid by the state taxes, it sounds kind of the same.”

Linda: Well, it's quite different actually because when you're Section 8 there, you have to apply for it. You have to be below a certain income. There was nothing about rent control tenants, right? You could have a rent control tenant who was a millionaire. They just wanted maybe a little pied-a-terre in the city you know and they had a house on the Cape. A lot of them didn't have houses on the Cape, by the way vacation houses on the Cape, but there was no way for us to really know who they were, you know except by some friends who talked about it.

Doug: Yes, Mayor Ken Reeves, City of Cambridge, had a rent-controlled unit. Judge Ruth Abrams in the Massachusetts Court System had a rent-controlled unit, so landlords held their units vacant longer waiting for a perfect applicant to come along, and those folks were disproportionately high income as opposed to Section 8, which is what we call means tested. Exactly what you said, Linda, you have to apply. You have to be in need if that help.

Linda: Right, right. Now I’m wondering if it's somehow illegal for a city to impose means testing on private landlords because they've never done it [crosstalk 0:53:55].

Doug: That would be interesting. Well, I mean what we heard anecdotally from what happened inside Boston was that they didn't have a good plan for means testing because rent control was all about the unit and not the people living in it, and you need a whole different regulatory framework to apply some standards on applicants. So I think it just was it was more than they bit off more than they could chew trying to do a rent control proposals. That's why they've just copy pasted what we had in the ‘70s and ‘80s and changed some numbers here and there.

Alan says, “I think we're not allowed to leave a unit empty for more than three or four months. There was a daily fine of over three or four months.”

Linda: Yes, that's true, Alan, and I showed you the slide about the man who was fined $3,000 and jailed for six months because he left his units empty.

Doug: It’s crazy to think that that should be a power of the unelected rent control board that they could send somebody to jail.

Linda: Yes. I don't know the details of that case, but it was made a criminal complaint, so a crime maybe a misdemeanor I’m not sure, but yes an unelected board can do that, too.

[0:55:10]

Doug: It was really bad. It reminds me you know, the very first reaction of Representative Conley and Representative Honan in April 2020 when the pandemic started was they filed a bill that would put sheriffs, judges, and landlords in jail if we attempted to collect rent or enforce a rental agreement. You don't remember that, Linda?

Linda: No [chuckles].

Doug: Yes, that was the most horribly offensive and non-public spirited thing I’ve ever seen a public official do and that's only because I haven't lived through the rent control years. It was really horrible for you guys.

Linda: Well, Cambridge of course had the strictest form of rent control, and it just got stricter and stricter. You know, it wasn't as bad in the other cities, but it could happen anywhere and I see no reason why it won't happen in Cambridge again because we have a city council who is pro-rent control.

Doug: Yes.

Linda: They cannot have rent control because you need a statewide enabling act through the Massachusetts legislature. The legislature has basically ignored the calls for rent control in the past, but if Michelle Wu is not successful, I have heard that there's going to be a referendum question in about a year or two.

Doug: Yes, they had planned that initiative petition to take effect in 2020, but the pandemic derailed that, so we haven't seen that come back yet, but they definitely could.

Last question and we'll wrap up. Marita asked, “If rent control is legalized, how long until it's actually implemented?”

Linda: I don't know.

Doug: We don't know, but so where Boston's at now, there's been a leak from the Rent Stabilization Advisory Committee where the gist of the plan has been made public, but they would have to actually write it down, file it with the Boston City Council who would have to vote on it favorably, and then that gets sent to the legislature. It goes to the Joint Committee on Rules. It has to be agreed that this can be filed late because they missed the deadline which is January 20th this year for the next two years. Then it has to go to committee and be voted out of committee. If it gets to the legislature, it's unfortunately pretty likely to pass because home rule petitions are usually adopted as a matter of just let the town or city do what they want. But it's the kind of thing that could happen in the next two years, so it could happen relatively fast and it could happen slower. That's obviously something we're going to be opposed to. Yes, all right.

Linda: Stay tuned [chuckles].

Doug: Yes, stay tuned.

Linda: It’s going to be a rocky ride [chuckles].

Doug: Yes, it might be. Any final words of wisdom or encouragement to share with attendees today, Linda?

Linda: Final words, going in front of the Rent control board was like going in front of the Inquisition [chuckles]. There's no mild form of rent control. It’s bound to get stricter.

Doug: All right, well on that sobering thought let's prepare ourselves to support one another, support MassLandlords and advocate strongly against this. There'll be a lot of opportunity to reach out to our reps and senators as well as Boston city councilors so stay tuned from us.

Linda: I just want to just plug there. There are other landlord groups that are opposed to rent control, and SPOA is certainly one of them and then the larger groups, too, the groups of the larger landlords. I think we will all work together when the time comes.

Doug: Yes, I’m sure we will. So thanks so much, Linda. We really appreciate you sharing this experience. It’s so easy to repeat the mistakes of the past if we don't learn our history, so thank you.

Linda: You're welcome. Thank you for having me do this.

Doug: Yes, and to all of you who are here today, if you have any follow-up questions, if you'd like to be connected with Linda, email us at hello@masslandlords.net and make sure to leave us feedback at masslanders.net/yellow that tells us if we have any improvements to make or if you enjoyed this afternoon's event and also accounts for continuing Ed credit for certified Massachusetts Landlord Level 3.

So thanks very much everyone. Thank you very much, Linda. Take care and have a great afternoon.

Linda: Thank you.

[End 0:59:37]