By John A. Shope
After having been eliminated by statewide referendum 25 years ago, rent control is back under discussion. Oregon and New York recently expanded their rent control laws, and a group of Massachusetts legislators have filed a bill authorize Massachusetts municipalities to bring it back here as well. A gaggle of Boston City Council candidates have declared their eagerness to do so. The unfairness, even likely unconstitutionality, of taking the economic value of the minority who own rental property ostensibly to further a broader social purpose apparently has not even merited their mention.
Unlike most of these candidates, I’m old enough to remember rent control in practice. I even lived in a rent-controlled apartment in Berkeley, California. Though I was fully employed, the rent in a prime location was only $100 per month. The landlord hadn’t made any updates in decades, of course, and we battled mold and cockroaches. The same squalor prevailed in Boston and, especially, Cambridge, where the laws were stricter. The truth is that rent control makes whole neighborhoods, not just rental units themselves, into slums, because no one wants to invest in rehabilitation of property next to a rent-controlled building that’s falling apart. Although the rent control laws often purport to exempt new construction, developers know that truth, as well as the distinct possibility that rent control will ultimately be expanded to their properties, too. Exactly one downtown market-rate rental tower, but many public housing projects that became notorious dens of crime, were built during Boston’s rent-control era. Its elimination by popular vote was a key ingredient in the urban renaissance.
Boston’s rents are too high, but that’s because the city’s sclerotic land use laws allow almost nothing to be built by right. Rather, they permit building only after a years-long discretionary and therefore highly political review process punctuated by demands to “reduce density” and extractions of “community benefits” that only drive up costs and reduce supply. (“Community benefits” sound nice, but my experience as a neighborhood president has taught me that they are frequently arbitrary, opaque, unaccounted for, and/or unenforced.) The current process frequently yields a building permit only when the cyclical market has turned down and the project economics no longer work, so only a fraction of what could be built ever gets built. Our problem is not a lack of land but over-regulation, and it has persisted from one mayor to the next.
One law that politicians can’t repeal is the economic law of supply and demand. If we truly want rents to come down, we need to make it easier for developers to build by right large market-rate buildings on either empty or teardown lots (subject to historic preservation in recognized districts). We also need to confront the political reality that elected representatives who figure prominently in the current process often are incentivized to oppose new market-rate housing because the new residents likely wouldn’t vote for them.
It’s fun to see the fashions of my youth in the 1970s enjoy their current revival. It would be a tragedy if the housing policies of that era were revived as well.
John A. Shope is a Boston attorney and resident of Bay Village.