SPOA's Statement to Boston Rent Stabilization Commission

As the public comment period for Mayor Wu’s “rent stabilization committee" draws to a close today, the Small Property Owners Association (SPOA) calls on all who care about fair and responsible housing policy to reject the city’s attempt to reinstate rent control in Boston.

 From the outset, SPOA questioned the exclusion of organizations representing small property owners from this committee, which has tried to rebrand rent control as “rent stabilization,” even though it is the same idea that died historically in Boston and surrounding cities — before it was appropriately buried in the graveyard of failed ideas. It was later apparent that city officials made a point of excluding any groups that oppose rent control from this committee according to various reports. The city then proceeded to orchestrate the first of its rent control “listening sessions” in the month of May.

 In the initial listening session last spring, more than 300 landlords called in to vehemently oppose rent control. That was after a bizarre series of twists and turns at the hands of City Hall. The first listening session was abruptly cancelled moments before the call was set to begin. This was followed by a sloppily drafted explanation as to why the call never happened.

 SPOA received numerous emails from our members that they had been denied entry to multiple “listening sessions”, despite these being advertised as opportunities for public comment. Landlord’s attempted registrations were met with “Registration is Closed” automatic responses. This has happened on several of the calls scheduled by Mayor Wu’s committee.

 After the initial call, the city announced that subsequent sessions would be viewer focused- some for landlords, some for tenants, and some for labor. On the first call, supporters of rent control flooded the chat with false and abusive comments against landlords. The chat function was disabled on the second call for tenants but reinstated for the subsequent landlord call. Meanwhile, the city has carried on under the false pretense that rent control is a forgone conclusion that has been accepted by all stakeholders.

 What’s going on here? Do these machinations sound like the city is truly interested in a fair and open discussion for all stakeholders? It appears that the city has made it almost impossible for rent control opponents to have a fair hearing. Instead, they are radically committed to unearthing a long-buried corpse only to put lipstick on it, before forcing it onto the masses in the name of “innovation.”

 However, the rest of us know better.

Rent control is BAD HOUSING POLICY. It has been tried, it has been tested, and it has failed repeatedly. It has failed in California. It has failed in St. Paul, Minnesota, where it was rolled back by its mayor. It has failed in Washington State. It has failed in Europe and elsewhere in the world. It has failed in every real estate market where it has been implemented. It is actively failing in New York City, where a rent control board lords over housing providers while preventing them from implementing reasonable repairs and rent increases. Hence, there is no doubt that rent control is “the best way to destroy a city, other than bombing,” per Assar Lindbeck, the world-renowned economist. 

 We know that rent control violates the rights of property owners by making it more difficult to collect their hard-earned rental income, which would be subject to artificial price controls. The policy would create additional challenges in removing noncompliant tenants for nonpayment and other disturbances, including vandalism, to the detriment of not only the owners, but the many good tenants who rely on housing providers to bestow them with safe, maintained places that they can call home.

 We also know that rent control leads to displacement, gentrification, and stagnation, as well as the disrepair and devaluation of property—all of which harm tenants, owners, and the housing stock itself. Likewise, the policy would negatively impact the property tax revenues for cities and towns, likely triggering tax increases on the general public to compensate for those lost revenues. Tenants will be left with decaying buildings, along with reduced options in the housing market, due to less construction and reduced housing supply, as well as dwindling turn-over in units that are already rented. Meanwhile, tenants who already live in rent controlled units, including wealthier ones who are more affluent than their landlords, will typically remain in those units, while the tenants from lower socioeconomic backgrounds looking to rent will be displaced.

 Moreover, why are property owners blamed for a housing crisis that we did not create? Even though rents have increased, the costs associated with running and repairing our properties have also risen. In fact, only nine cents on the dollar paid in rent is capitalized by the property owner, while the remainder of it is spent on the expenses of the property.

 Despite this fact, the small property owners, who typically keep their rents lower and who often avoid raising them for years, are the first targets in the cross hairs of the rent control threat, along with other dangerous proposals put forth by tenant activists. Therefore, how can we afford to manage our properties if our income is restricted, or even denied? Who are these city officials, who are neither economists nor landlords, to determine how much rental income is “fair?”And why are other industries not subject to the consideration of controls?

What will happen to all of the other businesses that small property owners support when we are run out of business first? These include the tradespeople from the carpenters, electricians, and plumbers to the people who work in the banking, insurance, and brokerage industries—not to mention the local governments that collect property tax revenue.

Where are the broader solutions that are supposed to help the entire community—as opposed to the proposals that scapegoat and victimize property owners? Innovative solutions can only be found when those who provide the housing and keep it affordable are heard and respected.

We should turn our attention to increasing the supply of housing, as well as a greater diversity of housing options, instead. As supported by Governor Charlie Baker and the Massachusetts legislature, the SOLUTION is to pass zoning reform to encourage more housing and to construct both new and affordable housing units, instead of disrupting the operation of existing buildings. The availability of these new units will create more competition, which will then stabilize, and reduce, the rent prices in Massachusetts. Furthermore, other solutions that are truly original and worthy of the term “innovation” may present themselves when property owners, who know the business, are actually heard for a change.

Rent control does not get new housing built and it prevents the owners of existing properties from maintaining them. The government must resolve to create an environment of mutual respect, security, and cooperation between housing providers and tenants, where both parties can prosper, rather than favoring one side over another to the detriment of the community.

Please contact your representatives at the city and state levels to voice your opposition to rent control and all policy proposals that violate our property rights. We have the right to run our properties safely and with dignity, as we provide for our tenants.

It is therefore time, once and for all, to move forward in the spirit of true innovation — and to let dead policies, like rent control, remain buried in the cemetery of failed ideas.

Small Property Owners Association (SPOA)