Boston: The case for rent control

But there’s an ingredient that’s conspicuously absent from Mayor Wu’s anti-displacement plan: rent control.

Rent control is one of the most direct and effective tools we have to keep renters in their homes. It’s a state guarantee that no matter what happens in the housing market, tenants can still have a clear idea of what they will be paying for rent the following year, just as homeowners have regular mortgage payments that they can plan for over the long term. And to be fair to Mayor Wu, bringing rent control back to Boston’s housing market was a pillar of her 2021 mayoral campaign. (From the 1970s to the early ’90s, Massachusetts cities and towns with over 50,000 residents had the right to enforce rent control laws of their own making — which several did — until rent control was banned statewide in 1994.) Wu tried to make good on her promise by sending a home rule petition to the state Legislature, seeking permission to enforce a 10 percent cap on annual rent increases for just over half of the city’s rental units.

Unfortunately for Boston tenants, Wu’s rent control proposal didn’t make it past Beacon Hill.

Democratic lawmakers declined to sponsor the petition, with some expressing concern that rent caps would hamper the development of new housing. Since then, Wu has backed off from rent control, even as Boston rents keep getting worse. Although she rightly criticized her reelection opponent Josh Kraft for pitching a “fake” rent control policy — which would involve giving tax cuts to landlords who voluntarily choose to cap their rent increases below a certain percentage — her comments were a harsh reminder that Boston still doesn’t have any caps, real or fake, on rent increases.

Most opposition to rent control from policy makers, economists, and landlords is predicated on a misunderstanding of what rent control can and should do.

As the journalist Jerusalem Demsas has argued, rent caps are not a long-term solution for the housing crisis. For broad, lasting affordability, more housing is needed, and there are situations in which rent controls can chill development. But rent control is an anti-displacement tool that can keep people housed as we wait for new housing supply to slow down the rent increases. That should be a worthy goal.

The reality is that people who lose their homes or are at risk of getting pushed out of Boston don’t have as much lobbying power as property owners. And that distorts how politicians think about the worth of rent control.

Renting in a market without rent control is terribly risky — and it’s worth noting that we don’t accept this level of risk in other markets for essential goods.

The United States has placed cost controls on certain food staples such as milk, and states play a role in regulating the cost of insurances and utilities. The government does all of this with little pushback. Why? Because most Americans agree that what’s best for the market is not always what’s best for the public and that compromise is necessary when must-have goods are on the table. This idea has become a topic of debate for the “Yes In My Back Yard” (YIMBY) movement, which started in the San Francisco Bay Area in the 2000s as a foil to the “Not In My Back Yard” (NIMBY) sentiment that often kills new housing development. While early YIMBY leaders focused on zoning reforms — and often dismissed rent control as an impediment to increasing supply — some advocates immediately acknowledge that while rent control may not encourage development, it certainly fulfills the goal of keeping people in their homes.

“It’s important to keep an eye on the economic sides of rent stabilization policies, but the models don’t always reflect the reality on the ground,” says Aaron Weber, a steering committee member of Somerville YIMBY, a group pushing for more housing, especially near public transit. “You can put together a little chart for what the math says rent control will or won’t accomplish. But you also have to series out for your actual next-door neighbors who may be about to get priced out.”

There simply haven’t been many attempts to enforce rent control alongside policies that promote building. San Francisco’s era of rent control, which spanned the 1970s and ’80s, is often cited as a cautionary tale, but its rent stabilization law was paired with restrictive land use rules that made building multifamily housing difficult. Around this time, Massachusetts also adopted stricter zoning laws, and in both regions, landlords responded to the standing rent control laws by converting rental units into condos for sale that would not be bound by the policy. The result was a decrease in available rental units.

Yet rent control was still popular. Commonwealth property owners succeeded in getting rent control repeal onto the ballot in 1994 and won only narrowly — 51 to 49 percent, with a large majority of Boston, Brookline, and Cambridge residents voting to keep the policy, despite its imperfections.

If the goal is to stop Boston from hemorrhaging renters, especially low-income renters, then a less than ideal rate of development in the short term is preferable to the cost of development without the guardrails of rent control — a cost paid primarily by low-income renters.

Consider Annie Gordon, a Mattapan resident of 50 years whose building — the Fairlawn Estates — was rent-controlled until the 1994 ban. Although the former owner chose not to raise rents drastically, the situation changed in 2018 when the building was purchased by a corporate landlord that proceeded to raise the monthly rent by as much as $500 for some tenants. “People were not making enough to keep up,” Gordon recalls. “Being an elderly person on a fixed income, I couldn’t afford the rent increases.” Gordon and a number of her neighbors managed to hang on, organize, and make enough noise to spark a resale of the building.

The new owner tapped City of Boston housing acquisition funding to secure the building and brokered a offer with the remaining residents that included a version of rent control for the entire building. Annual rent increases are immediately capped at 2 percent for all rental units there. This is a heartening success story, but it was hard-won, and not all of the residents who fought for it could be there to celebrate.

If we thought of rent control as an anti-displacement policy while we try to build our way out of the housing crisis, it could spare thousands of people from the hardships that Gordon and other renters have endured. It would also be an overdue extension of the government support that homeowners have enjoyed for decades. Whether it’s offering hefty tax subsidies, shaping interest rates, or regulating lending policies, government involvement in the housing market is nothing new. Granting more protections to renters would be a logical step.

Massachusetts voters may have a chance to bring back rent control next year.

A housing advocacy group, Homes for All Massachusetts, is currently campaigning to pose a ballot question asking voters whether they would support an annual increase cap of 5 percent for rental properties. Some new buildings and small landlords would be granted exemptions.

Jim Rooney, the CEO of the Greater Boston Chamber of Commerce, called the proposal “a terrible idea” in an interview with the Boston Herald. “People stay in those units,” Rooney said — implying that a decline in rental unit turnover would be a bad thing.

That might be the case if you’re looking to level up to a new apartment with better amenities or a more desirable location. But if you’re trying to stay in your home and your community, “turnover” may sound like a softer word for displacement.