By Eric Weld, MassLandlords, Inc.
An attempt to enact rent control is making its way through the ballot initiative process. A petition has been filed to replace Chapter 40P, a 1994 law prohibiting most rent control statewide, with a law allowing local communities to enact any form of rent control.
We have written extensively at MassLandlords about the disastrous (and sometimes fatal!) rent control policies in the state from the 1970s through 1994. The latest ballot initiative would largely duplicate those failed policies. It would, again, inevitably lead to less rental housing availability, lower quality of rental housing, uneven and unfair tax administration, and a harmful disparate impact on people of color, immigrants and any rental applicants with housing barriers.
Not to mention, another rent control law is not necessary. Lost in media coverage of this ballot initiative petition (as also with the recent Boston rent control proposal) is the fact that Chapter 40P already allows for rent control.
Section 4 of Chapter 40P states that any municipality in the state may enact rent control as long as the town or city reimburses owners for the difference between market and controlled rent price.
The “Initiative Petition for a Law Relative to Local Options for Tenant Protections” was filed with the attorney general’s office on Wednesday, Aug. 2, 2023, by state representative Mike Connolly, Democrat, of Cambridge. The filing was the first step in submitting the petition intended as a ballot initiative for the 2024 election. Rep. Connolly submitted the petition along with 15 other citizens from Cambridge, Somerville and Boston. Aug. 2 was the deadline date for filing such an initiative ballot petition.
Connolly has also filed rent control bill proposals in each of the past three legislative sessions. His legislative proposals, like his ballot initiative, would also permit local rent control, among other housing policies.
The latest rent control petition follows a home-rule proposal for rent control in Boston, which was submitted to the governor in spring 2023. It was backed by Mayor Michelle Wu and approved by the city council. That bill was written by an advisory committee, devoid of small landlords, that was appointed by the mayor’s administration under mysterious and undisclosed processes. MassLandlords has an active public records lawsuit against the City of Boston to force the release of records pertaining to the appointment of members of the mayor’s Rent Stabilization Advisory Committee. The home-rule proposal was referred to the Housing Committee and would ultimately require Gov. Maura Healey’s signature to become law.
Chapter 40P Reversal
If enacted, Rep. Connolly’s rent control ballot petition would strike the existing Chapter 40P from state laws and, in its place, insert a law that is effectively its opposite. Chapter 40P is a law resulting from a statewide referendum prohibiting most forms of rent control. Instead of prohibiting rent control, Connolly’s proposal would allow any community in the state to enact, with plenary power, any and all rent control laws.
The proposal would grant considerable power to local legislative bodies. In some towns, that would include select boards, which sometimes consist of only three members – a substantial level of power for a small representative board.
Local legislative bodies would have absolute power to regulate rents, brokers and other fees, and evictions; to eliminate move-in monies; to appoint boards or committees to oversee and adopt further regulations; and to determine penalties, including fines and even jail sentences, for landlords. The proposal doesn’t apply any limits or include percentage amounts restricting local governments’ regulations. Effectively, each of the state’s 350 towns and cities would be free to decide how much and how to implement rent controls, how harshly to apply penalties, etc.
The law would also grant local authorities plenary power to approve or deny sales of rental units on the open market, such as converting to condominiums or through demolition.
Among its proposals to allow local legislatures to regulate housing providers’ businesses, the initiative assures that it would not allow depriving a property owner “of a fair net operating income.” Again, “fair” would be interpreted by, in some cases, small local legislative boards, which would be granted the power to decide how profitable, or not, local landlord businesses should be.
The proposal would disallow local regulation of: dwelling units that have been in operation for 15 years or less; owner-occupied 2- or 3-family units; hotels, inns and other short-term rental units; units already regulated through government agencies; hospitals, school dormitories, convents, monasteries; charitable dwelling facilities; and others.
Finally, the proposal awkwardly notes it would not allow violations of the U.S. or state constitutions. This is a specious clause. Four legal briefs have already been submitted to the attorney general’s office arguing that the initiative, itself, is unconstitutional on different grounds: 1) that it contains too many unrelated powers and provisions, addressing criminal law on one hand, for example, and civil tenancies on the other; 2) that it impermissibly addresses religious institutions among its exemptions (mentions of religion are prohibited on ballot questions); 3) that rent control would violate the constitution’s protections against “takings,” or depriving the right to use and benefit from a property; and 4) that the petition is so broad as to be a constitutional amendment to the home rule petition, which would require a different process.
A Step Backward
Its unconstitutionality aside, in its content, Rep. Connolly’s ballot proposal for local rent control – like his recent legislative bill proposals – misses the mark on several points. Massachusetts desperately needs more housing. Yet it’s been proved that rent control policies reduce housing stock, both by deterring development and because tenants in rent-controlled units are less likely to move out, leaving fewer properties on the market.
At the same time, average rent prices increase under rent control. When non-controlled properties’ tax rates are hiked – to help make up for lost tax revenues from controlled properties – owners of those properties have no choice but to raise their rents to help pay increased taxes.
And, as a well-known Brookings study concludes, when rent control has been in place, regulated properties are disproportionately occupied by people who can well afford them, not by those who need them most.
These points are not addressed and would not be resolved by Connolly’s rent control proposal.
Enacting such a rent control policy would be like patching a broken window by taping cardboard over it. Now you’ve reduced the window’s function, lost its value, and the window is still broken and will have to eventually be fixed.
In other words, rent control is a short-term Band-Aid, not a fix. The only people who benefit are the small portion of renters who have rent-controlled units when the policy is enacted. Everyone else loses.
Path to Ballot
Rep. Connolly’s rent control ballot petition requires several steps before becoming a question on the statewide ballot in 2024. In September 2023, the attorney general will make a determination on the petition’s constitutionality, weighing above-mentioned briefs to the contrary. If certified by the AG, it would then move on to the secretary of state for another approval process. Meanwhile, the petitioners are required to get at least 74,574 additional signatures and file them with local election officials and the secretary of state’s office in December 2023.
Once enough signatures are gathered, and if the petition is approved by the secretary of state’s office, it would then go before the state legislature in January 2024. Pending the legislature’s action on the petition, it may be approved as a ballot question in the next general election in November 2024. Or, more ballot signatures may be required for approval.
Real Housing Solutions
Rep. Connolly’s ballot petition is cynical and perverse. Connolly has acknowledged that we are deep in a housing crisis, and that not enough housing exists that people who need housing can afford. Yet, he proposes a policy with the knowledge that it would make our housing crisis worse, and would lead to less affordable housing while reducing tax revenues in communities that implement rent control. It looks like an attempt to gain political points on his part, simply because rent control is a popular button-pushing buzzword.
As we have written here so many times, the solutions to high housing costs in Massachusetts are not to force property owners to provide expensive housing below cost, based on artificial and arbitrarily based regulation. Such policy would only exacerbate our housing crisis in several ways.
Rather, common sense solutions would include, first, increasing rental assistance, in the short term, while long-term housing policies and wise development increase housing supply and tame market prices. An increase in state funding for rental assistance agencies should accompany an increase in assistance funding, to improve outcomes and accommodate increased applications.
Second, future policy must include reforming single family zoning laws, as other states have done. Massachusetts has begun chipping away at zoning laws prohibitive to multifamily development with the Housing Choice Act and the MBTA Communities Act. A next logical step might be to follow Washington state’s lead by enacting policy allowing multifamily development by right. That would encourage building of duplexes, accessory dwelling units, and even fourplexes under some conditions, potentially adding tens of thousands of affordable options. Zoning reform should also include easing setback, parking and lot size requirements that deter affordable housing development.
Not the Way Forward
There are ways to address the state’s housing crisis that don’t create winners and losers, or pit citizens against one another as rent control policies do. Rather than deterring housing development, as rent control does, we should be incentivizing it. Rather than penalizing property owners, we should be assisting them.
A rent control policy like the one Rep. Connolly proposes would only set us back in our progress toward better housing for all. We hope this short-sighted ballot petition does not succeed on its journey to become a question on the 2024 ballot.