Governor signs water submetering bill – useless to small owners, and worse yet

Water submetering bill passes

Useless for small owners

Worse yet:  just-cause eviction & back-door rent control

On December 16, Governor Mitt Romney signed the Water Submet-ering bill into law, over the strenuous objections of SPOA, which was excluded from drafting the bill. Backing the bill, however, were the Greater Boston Real Estate Board (GBREB) and the Massachusetts Rental Housing Association (MRHA). The new rules make water submetering impossible for most small owners and impose just-cause eviction and back-door rent control. Perhaps it’s no surprise, because the closed-door negotiations included only legal services lawyers and GBREB, which represents large landlords and developers, who can submeter at no cost in new construction.

Start-up costs & delays

Water submetering companies from other states testified that submetering is financially feasible only by doing 50 units or more at once. Under the new rules, owners can send bills to tenants for their water usage only after replumbing and separating out all the water pipes going to each apartment, installing certified submeters to measure only the water delivered to each apartment, and installing a radio-computer device to send the submeter measurements to a hired water billing company which will send out the bills and charge the owner.

Then the owner must replace all toilets, faucets and showerheads with new, water-saving fixtures, certified by a plumber. After all these costs, owners must wait for current tenants to vacate voluntarily before starting to bill new tenants only. Almost no owner is going to do it!
Conservation hypocrisy

There is a no-cost billing method that would conserve water, would be widely adopted and would not push rents up. A building’s total water bill can be allocated proportionately to each apartment using simple arithmetic. It’s done in many states. But legal services lawyers vehemently opposed it and GBREB did not have the clout to stop them. They all were sucked up by a study showing that submetering conserves more water than proportional allocation per building.  Conservation groups and SPOA were not at the negotiating table to push a key point: if almost no one does submetering (at least in existing buildings) and most would do allocation, then only the allocation method would achieve any conservation at all. For all of Massachusetts’ environmentalism, only one conservation group was arm-twisted to endorse this bill at the end.

Tenant lawyers also seized on alleged “unfairness” if tenants were billed for estimated instead of actual water usage and claimed owners would not reduce rents after shifting water bills to tenants. These bogus arguments were swallowed. Water is already included in rents in a “guesstimated” way (as well as tenant use of rooms, hallways, roofs, basements, etc.). And pressure on rents to rise would definitely be less if owners don’t pay water bills and don’t have high start-up costs.

Just-cause eviction & back-door rent control

But the worst part of this new law is that, again under pressure from tenant lawyers, owners are barred from ever starting water billing with any existing tenants. They also cannot raise the rent in order to pass on any start-up costs – ever. To enforce these rules, the new law imposes just-cause eviction and back-door rent control on all existing tenants right now!

Just-cause eviction in Massachusetts came and went with rent control, and now it comes back. It means the owner must prove to the court that he or she is not evicting the tenant except for specific, provable, good reasons and not in order to start billing tenants for water. Back-door rent control comes in because the new law specifically says no tenants can ever be charged for the start-up or billing costs, not even under a “new tenancy.”

Thus, ANY rent increase can be challenged, and the owner must then show the court every expense justifying a rent increase, exactly like the “grievance” type of rent control just defeated in Boston. How do you prove you are NOT raising the rent to cover start-up costs? Here, then, is yet a further deterrent to all existing owners to submeter. And coming weaseling back into our laws is just-cause eviction and de facto rent control in unpredictable ways. No owners can now safely raise the rent or use a 30-day notice to quit for any reason without a tenant possibly raising an intention to submeter as a defense and delaying tactic. A precious chunk of Question 9 was given away.

SPOA stonewalled

SPOA understood all these problems and outlined them carefully to legislators. We did an intensive phone call campaign and stopped the bill for four months. GBREB, nevertheless, pressured behind the scenes and the bill squeaked through.

This new law reflects the worst legislative outcome: higher costs on rental housing, bad rent control and eviction precedents introduced into law, while leaving present law effectively just as it is, with no conservation and almost all owners still paying water bills – all from closed-door backroom dealing.

We must at all costs avoid any similar outcome on a rent escrow bill. This is the clear danger we face ahead. We must present a strong-enough political force for a truly effective rent escrow law, or otherwise we will end up with “rent escrow” in name only – and the free rent trick that abuses small owners so badly will continue on largely unchanged.

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