The Cambridge City Council might vote tonight in support of House Bill 3017 that gives away, for free, with no consideration at all, a right of first refusal to my property at NNN SomethingStreet, Cambridge MA.
Before you do this, or especially after you have done so, I ask you to think about what price you would ask if somebody wanted to buy a right of first refusal against your rights to sell your house, your condo, your property, or that of your parents or grandparents or brother/sister or any other relative that might have an estate from which you might someday inherit.
Would you be willing to vote in support of a bill to give me a right of first refusal to your property for free, with zero benefit or consideration?
And a transferable right of first refusal at that, and a right that lasts forever and ever, and on all owners, present and to come, as long as the owners are private. Would you give that to me for free? No? What would you want me to pay?
What would be the market valuation of such a right for sale? Is it 0% of the value of a property? Is it 0.1% perhaps? Or 1%? Even if it is as small as 0.1% then your vote in favor of House Bill 2017, is, in effect, reducing the total valuation of rental properties in Cambridge by tens of millions of dollars, and moving the tax burden associated with the valuations onto the owners of single family homes and condominiums and other businesses of all kinds.
The market will eventually put a valuation on this, over time, on the results of the kinds of motive, means, and opportunity for collusion between government agencies, government funded non profits, and tenants that will be created by this right of first refusal that you are voting on now. The valuation will not be zero. It will be significant, and again, it will come out of many pockets, in increased taxation on massive numbers of voters in Cambridge. You might hope that your voters are not smart enough to figure out that there is real damage and long term repercussion to what you are voting to support tonight.
But many years ago the majority of voters going to the polls in Cambridge voted against a local ballot question that was in favor of the city council voting for a home rule petition to attempt to re-establish rent control after 1994. So those voters figured it out. Enough people living in general public housing, or elderly housing, or any kind of housing receiving Cambridge tax dollars, all figured out that Rent Control was bad for the equitable distribution of property valuations, and was therefore bad for stability and was therefore bad for them.
So cross your fingers and hope that Cambridge voters won’t be able to figure it out again, if you wish.
The cost of H3017 is not free, and your vote is not in favor of a risk free course of action, nor are you playing in a zero sum game; because the total profit minus loss to everyone, landlord, tenant, all Cambridge voters and stakeholders, is non-zero and substantial. Long term this would even impact the marketability of properties owned by the Non Profits, if they ever wanted to sell to a private developer in order to have cash to create new housing on land that they might acquire. So short term, the Non Profits might gain (assuming they have easy access to other financing) but long term, the impact is negative on them too.