TOPA Bill Passes in Housing Committee
Alert! Alert! Alert! … The TOPA bills that we fought against passed favorably in the Housing Committee on Thursday, June 30. The bills are now on their way to the Ways and Means Committee. If passed there, TOPA will be considered by the entire House and Senate, where many lawmakers still don’t understand the devastating consequences it could have on our Commonwealth. Therefore, it is ever more crucial for us to continue voicing our opposition with more intensity! Please contact your elected officials and urge them to vote no. You must contact them urgently and often throughout the entire month of July! We have also included talking points that you can use below.
You can find your state Senator and Representative here:
https://malegislature.gov/search/findmylegislator
Using the link above, the elected officials that we need to influence heavily are:
If any of the above represent the district where you live, it's especially vital that you make every effort to reach out to them. If you know landlords in their districts, please forward this message to them — and please contact these officials yourselves, even if you are not in their districts. All of them need to hear from SPOA members!
TOPA passed last year without debate as an add-on to a bigger bill. No one noticed it at the time because it sounded good and like something that would not be problematic. We are now moving beyond the pandemic and we have more data as to how damaging TOPA is. We're hearing that legislators are thinking TOPA can’t be that bad since it passed once before.
As numbered currently -- S.890 and H.1426 -- TOPA would impose a tenant right of first refusal on the sale of rental properties throughout Massachusetts, including all LLCs. If you are not a resident of Massachusetts and own one condominium that you rent out, but have moved out of state, TOPA applies to you. H.4208, meanwhile, is a home rule petition that would apply the same restrictions in the city of Somerville, exclusively.
These bills could prevent property owners from selling their properties at market value and make it much more difficult for buyers to purchase and invest in rental property. The law restricts the seller's ability to select the strongest offer and instead forces the seller to accept contingencies and abide by terms and conditions spelled out in the sloppily drafted bill, which adds up to 227 days — or 7 to 8 months — to the timing of a sale.
Housing provider rights are under assault. Now, more than ever, we need you to explain to representatives that it’s getting close to impossible to be a small housing provider in Massachusetts. YOUR VOICE MATTERS!
These policies do the exact opposite of what they’re intended to do. As small property owners throw up their hands in the face of unprecedented market interference, we sell out existing affordable housing to be gobbled up by large corporate entities that have the resources and time to wait out red tape. Moreover, these large entities can’t facilitate the supportive personal relationships and face-to-face interactions with tenants that we do.
Here are some talking points on the bill to share with your legislators:
1. We have a housing crisis in Massachusetts. Many people, including Republicans and Democrats from Charlie Baker to Maura Healey, have recognized that for the state to remain prosperous, we need more affordable housing. We are simply not producing enough new housing — including workforce, affordable, multi-family and other types — to keep up with demand.
2. Last year, the legislature and governor took a huge first step to help get more housing in the pipeline by passing the Housing Choice bill, which relaxed local zoning requirements and offered incentives to create more production. This new zoning is already facing NIMBY opposition in the suburbs.
3. The Legislature is doing many good things to boost production. Just last week, the House unveiled an economic development bill which would create new incentives specifically to create “starter home districts.”
4. TOPA has been in place for 41 years in Washington, D.C. and has ground new production of multi-family housing to a halt. Why would we want this right now in Massachusetts?
5. TOPA, in its current form, is a sloppy bill. It’s written by academics and advocates with little knowledge of how a real estate transaction works. On paper, they say it is not much to ask of owners — but by their own timetable, they are adding a minimum of 227 days (7-8 months) to a transaction. That is unworkable.
6. They make it appear that small property owners of 6 units or less will be spared, but the actual language says that the most common ways small property owners own - through trusts and LLCs or corps-would not count, so any rental that was not owner occupied would be subject. This is unclear.
7. Most property owners are small owners who make up over 60% of the owners in the state. Most buyers are small as well. This bill, however, would give a huge leg up to out-of-state investment companies, like Blackrock and others, that have the resources to wait 7-8 months after putting in an offer to find out if the transaction will actually happen. These companies, who are gobbling up housing nationwide, prefer policies like TOPA creating barriers to entry for smaller owners.
8. We have had a great run with real estate values increasing. But in discussions with financial experts, we may have an economic recession. This proposal makes provisions for short sales and foreclosures – but as is the case with private sales, TOPA will add more obstacles and hurdles that complicate and prolong sales, given the reality of these transactions.
9. The state is dictating the terms of the sale. Requiring the type and amount of deposits, requiring inspections, and dictating the timelines. Requiring “all reasonable” contingencies and lots of reporting to the Attorney General for individual sales. This is really an unprecedented intrusion into contract law and private property rights.
Wishing you a happy and safe Independence Day weekend!
Small Property Owners Association (SPOA)