June 15, 2003
When Rent Control Just Vanishes
AMBRIDGE, Mass., June 10 With rent-stabilization regulations in New York set to expire on June 16, the usual suspects are doing their heartfelt best to frame the debate. In one corner are tenant advocates, who say that rent regulations cushion thousands of people from the abyss of poverty. In the other corner are landlord advocates, who say that the regulations stifle any free-market impulses to build and rehabilitate housing.
And yet, to prove that their exhortations are based more on experience than on ideology, both sides are fond of citing the same example: how rent control was eliminated in the metropolitan Boston area.
True, the pace of residential construction in Boston has accelerated since rent control was repealed in 1994. True, too, more neighborhoods that were once considered dangerous or dilapidated are becoming gentrified and more attractive to developers. But equally true is the fact that more working-class families, faced with soaring rents, are moving two or three area codes beyond the 617 exchange, and that homelessness and overcrowding are cresting. So parsing out how rent decontrol has influenced these changes is subject to a good deal of interpretation.
No one believes that New York lawmakers will literally follow the lead of Massachusetts and, with one stroke, wipe out the rent laws that regulate more than one million apartments in New York City. Instead, what is likely to happen sometime tomorrow or a short time later, lawmakers and housing groups predict, is that the regulations will be extended, with some tweaking.
Still, the recent finding that more than 10 percent of the city's rent-regulated apartments have gone on the open market or otherwise been removed from regulations since the Legislature began relaxing the rules in 1993 has raised the prospect, once unthinkable, that New Yorkers may one day live in a world without rent guidelines. If so, then Boston may offer the rough-draft, smaller-canvas embodiment of what could happen in New York.
There are some significant differences, of course. Boston's vast student population distorts the market. New York's rent-regulated universe of one million apartments dwarfs the Boston area's former pool of roughly 45,000. New York's system also relies heavily on variables that did not apply in Boston, like household income and monthly rent levels.
By the early 1990's, rent control was a major force only in the city of Boston and two neighboring communities, Cambridge and Brookline. Still, in 1994, the Small Property Owners Association, a coalition of landlords in Cambridge vigorously opposed to rent control, led the drive for a statewide referendum. And with a blunt campaign called "Get Government Out," they exposed prominent residents who clung to steal-of-a-deal rent-controlled apartments including a judge and the mayor of what rent-control opponents liked to call the "People's Republic of Cambridge."
To much surprise, the referendum passed, 51 to 49 percent, despite overwhelming opposition in the places that still had rent control. As a result, rent control had to be dismantled within a couple of years.
"To me, the phase-out is the best way to put an end to the reliance on rent control," said the chief executive of the Greater Boston Real Estate Board, Edwin J. Shanahan. "It's almost like an addiction. So instead of going cold turkey, you have the rent-control equivalent of a methadone clinic."
Since then, Mr. Shanahan said, the "magic of the market" had transformed the region into a more attractive, if more expensive, option for developers and young professionals. And one of the most popular trends has been the conversion of the area's ubiquitous "triple deckers," or three-level wood-frame houses, into condominiums that are sold by the floor. According to Boston officials, the median advertised monthly rent for a two-bedroom apartment is now about $1,600, up from $882 in 1995. In Cambridge, the comparable rent is roughly $1,700 now, up from $1,163 in 1996.
One landlord, Joe Maffe, said that under rent control, he had had so little leverage with a tenant in a two-bedroom apartment in a prime location (Beacon Street near the Boston Common) that the man was able to avoid paying the $302-a-month rent for 12 years. "Twelve years!" Mr. Maffe exclaimed, adding that he had ultimately paid the tenant $6,000 to move out. Now, the rent on that apartment has climbed to $4,800 a month, allowing Mr. Maffe to make vital capital improvements for the first time in two decades.
"Rent control," he said, "was a failed social experiment."
In addition, permits for multifamily buildings in Boston increased. From 1998 to 2001, 2,569 permits were granted compared with 420 from 1991 to 1994. More out-of-state developers, who Mr. Shanahan thinks had been scared off by rent control, are coming to Massachusetts.
If there has been any disappointment, Mr. Shanahan conceded, it is that virtually all the new construction has been of high-end luxury apartments. And that shortcoming lies at the core of the tenants' arguments that rent decontrol has been deleterious.
There is no shortage of statistics and studies buttressing these arguments. For something local, look at "The Greater Boston Housing Report Card 2002" prepared by the Center for Urban and Regional Policy at Northeastern University and two other organizations. Or at federal census figures for Cambridge, which reported a 30 percent increase from 1990 to 2000 in the number of households that spend more than 30 percent of their incomes on rent.
And for something national in nature, thumb through "Out of Reach," a recent report by the National Low Income Housing Coalition, which studied what is known as housing wages the amount of money someone would have to earn per hour to afford a two-bedroom apartment at a fair-market rent. Boston, with a housing wage of $25.83 an hour, now ranks fifth on the list of least affordable metropolitan areas. It had been 11th in 1998. (New York City, interestingly enough, was not on either list.)
"I think the repeal of rent control in Boston has been a disaster," said Peter Dreier, Boston's housing director from 1984 to 1992, who is now a professor of urban policy at Occidental College. "The victims of the repeal of rent control are usually invisible to people who make public policy and run for office, because they've been pushed out or they're hiding because they're doubled up."
There is no shortage of anecdotal body blows, either, about how rent decontrol has given places like Boston and Cambridge an increasingly transient nature and a widening income gap.
Countless parishes are losing longtime parishioners who are unable to afford the escalating rents, weakening the neighborhood fabric, said Kathy Brown, coordinator of the Boston Tenant Coalition. People in working-class neighborhoods like Dorchester and Roxbury are moving to places more than an hour's drive away, like Brockton and Fall River or Providence, R.I., said Mayor Thomas M. Menino of Boston.
"It's worse than ever before," Mr. Menino said. "Working people have been forced out. More people are doubled up. We've got the highest level of homelessness the city has ever had, due to the rental increase. That's not a healthy city."
As part of his housing agenda, Mr. Menino proposed last year to revive a version of rent control. But in November, the City Council narrowly rejected the idea.
Even if Mr. Menino had prevailed, he would have faced an arduous political task in winning the State Legislature's approval. But now, Cambridge tenants are urging their City Council to try a revival of its own. And on Monday night, they achieved a small victory, when the council voted to support a lawsuit, soon to be filed, that would make it easier to put rent control on the local ballot in November.
"We were viewed as Cassandras," said Michael Turk, who is a member of a new group called the Committee for Cambridge Rent Control, "but my God, it's actually worse."
One new and so far, effective method of preventing evictions is a housing version of collective bargaining, in which a landlord and a tenant group negotiate proposed rent increases, with the city playing mediator, said Steve Meacham, an organizer with City Life/Vida Urbana, a tenants' group. Mr. Meacham's group has been involved in about a dozen such cases.
One current example involves a 12-unit building at 90 Wrentham Street in Dorchester that recently changed ownership. The new landlord wanted to almost double the rents he charged tenants like Shirlane Reason, who works in customer service at Children's Hospital Boston, and Clarence Merriweather, a truck driver. Stunned, the residents formed a tenants' association, contacted Mr. Meacham and are now set to negotiate with the landlord later this month.
"It's like a guerrilla war, is what's going on," said Bob Van Meter, executive director of the Allston Brighton Community Development Corporation, which develops low-income housing. "It's building by building, block by block."
Some landlord advocates are unimpressed. They do not see why some tenants insist on remaining in the same neighborhoods. Why oppose mobility, they say, especially if there are job opportunities elsewhere?
But no matter what the logic of their arguments in their own minds, they also want to guard against complacency over the possible return of a law that has had such a divisive and exhausting history.
"It's like fishing," said Lenore Monello Schloming, the president of the Small Property Owners Association. "If you catch a fish and you get him out of the water and he's flopping in the sand, you have to make sure he doesn't get back in the water. Rent control is like the fish."