May 10, 2022
Dear Honorable Colleagues:
Yesterday, the Greater Boston Real Estate Board wrote to us in opposition to rent stabilization (see attached screenshot). As one of the lead sponsors of the Tenant Protection Act (H.1378) to lift the statewide ban on rent control, I would like to take this moment to offer a response.
BACKGROUND ON RENT STABILIZATION
Rent stabilization, or "rent control" as it is often called, can be a moderate and practical policy option designed to limit displacement and help longtime residents, working families, and at-risk tenants remain in their homes, while also allowing for landlords and owners to earn a fair rate of return on their investments.
Rent stabilization policies typically recognize the difference between small, owner-occupant landlords, and larger, corporate actors or those who own large portfolios of rental properties. Our bill, for example, exempts all small, owner-occupant landlords from any new regulation.
Another common feature of rent stabilization is that new construction can be exempted for a certain period of years, so as to mitigate the chance that new regulation could impact the construction of new housing. Our proposal allows for such an exemption as well.
Over the past few years, several jurisdictions, including Oregon, California, New York state, Minneapolis, and St. Paul have all advanced rent stabilization policies and options into law. Meanwhile, Boston Mayor Michelle Wu has convened a Rent Stabilization Advisory Committee after her big victory in last year's election where rent control was prominently debated.
GBREB'S ANALYSIS OF DATA FROM ST. PAUL
In yesterday's letter, the Greater Boston Real Estate Board (GBREB) asks us to look at the city of St. Paul, Minnesota, where voters approved a rent stabilization ballot initiative in 2021.
GBREB's argument is based on a single, very narrow datapoint — that in a three-month period, from December 2020 until March 2021, developers pulled building permits for 1,393 units of multifamily housing — but in a three-month window one year later, immediately following voter approval of rent stabilization, from December 2021 until March 2022, developers pulled just 231 such building permits.
The headline, "Apartment construction slows by more than 80% in St. Paul," sounds pretty bad. But as anyone who has looked closely at permitting data can tell you, observing such a small window of time in a single municipality is rather arbitrary and statistically insignificant. One or two sizable projects, falling on either side of that three-month window, would completely change the results. Development projects happen over long time horizons, and wintertime is particularly unreliable. Plus, the timeframe in question occured at the height of the Omicron wave of the pandemic.
Indeed, an official with the St. Paul Department of Safety and Inspections has responded to these sensationalized claims by casting doubt on the notion that the city's new rent stabilization ordinance has impacted building construction. "Full-year numbers are what’s considered meaningful — frankly, not just by the industry but also more valid statistically,” she said. “Fluctuations over short periods are typical and, historically, more permit applications are filed in late spring/summer.”
With the Boston Globe now reporting on widespread displacement of Boston's Black residents, and with inflation now making the affordable housing emergency worse than ever for so many of our constituents across the Commonwealth, we need informed, rational discussion of our housing policy options — not sensationalized headlines and cherry-picked data.
BRIEF HISTORY OF RENT STABILIZATION IN MASSACHUSETTS
It's worth pointing out that rent stabilization has been a common feature in Massachusetts law over the past 102 years.
In the 1920's, following World War I, we had rent stabilization in Massachusetts (see Ch. 578 of the Acts of 1920). By the time of the Great Depression these policies were generally abandoned as rents started falling naturally. Then, during World War II and well into the 1950's, we once again had rent stabilization in Massachusetts. There was even a ballot question where Massachusetts voters strongly supported continuing with rent stabilization. The ballot question prevailed in 190 of the 340 municipalities at the time, according to the Congressional record.
When the push came to do urban renewal — clearing out diverse, densely-populated neighborhoods such as the West End in Boston in favor of new interstate highways — there was a related push to do away with rent control, thereby allowing highway construction to proceed more easily.
In the 1960's, the great social movements of that time renewed the call for housing justice, and by 1970, Massachusetts once again allowed rent stabilization.
In 1994, some landlord groups and real estate interests pursued a ballot question campaign that banned rent control statewide by the slimmest of margins (51% to 49%). Notably, the three cities and towns that had rent control voted overwhelmingly to keep it, while opponents took the fight to many of the other communities where there was no organized base of support to defend the policy or correct the record on misinformation. Given that dynamic, it's remarkable that 1994 ballot question was so close.
I share this history to suggest that consideration of rent stabilization policies is nothing new and nothing radical. What's radical is our current displacement, affordability, and homelessness crises. Over the past century, the longest period we've gone without at least a local option for rent stabilization in Massachusetts is the period from 1995 to the present. Over that time, wealth and income inequality have become profoundly worse, the housing market has become much more globalized and financialized, we've seen family homelessness get much worse, and today, we face the worst inflation since the 1970's.
CONCLUSION: RENT STABILIZATION IS PART OF A COMPREHENSIVE RESPONSE TO THE HOUSING EMERGENCY
In sum, this is precisely the moment for us to consider allowing a local option for basic rent stabilization, as part of a comprehensive approach that includes support for new housing production and funding for housing programs and services.
We all know we are facing a housing crisis, and we can all be proud of some of the major steps we've taken to address it — from passing the Governor's Housing Choice bill to lower certain zoning approval thresholds, to passing a requirement for multifamily housing near transit, to implementing the nation's strongest eviction protections in response to the pandemic and investing some $600 million toward homeownership programs and various other housing supports in our first round of ARPA spending, just to name a few items.
As we look toward the final months of this legislative session, I am reaching out to invite you to support the legislation I filed with Rep. Elugardo and Sen. Gomez to lift the statewide ban on rent control, H.1378/S.886. This will allow our municipal officials to bring everyone to the table — that means renters, homeowners, and landlords alike — to consider meaningful tenant protections that can work on the local level.
If you have any questions, concerns, or thoughts about our bill or this topic in general, please do not hesitate to reach out. Thank you kindly for your consideration.
Yours in service,
Rep. Mike Connolly