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Gordon: A few questions on the rent control issue

By Jesse Gordon
Wednesday, October 15, 2003

Rent control is back on the agenda in Cambridge. Specifically, rent control will appear on the ballot on Nov. 4, sponsored by the Committee for Cambridge Rent Control. A lot has been written about the politics of rent control, but very little about what the rent control initiative would actually do. And some serious questions still need to be addressed.

The CCRC is seeking citywide support on the November ballot, which could then result in a Home-Rule Petition to the state Legislature, which could re-legalize rent control in several cities thereafter. A vote on rent control passed in the Democratic City Committee after a lively debate. Several city councilors have spoken out against rent control. In other words, the vote in November is only one of several steps needed to re-implement rent control.

Rent control was abolished in Cambridge in the mid-1990s after a statewide referendum. What's the purpose of re-instituting rent control now? Says CCRC's Bill Cavellini, "The new rent-control system focuses more on moderate-income people because low-income people have found other ways" to deal with rent, including leaving Cambridge. Cavellini says the new rent control won't "focus on impoverished people - it's to keep working people of low and moderate income in the city, as a response to the housing emergency."

Some relevant aspects of the new rent control proposal include:

  • A city-appointed board would set the maximum rent, based on the rent in February 1999 (when the city declared a "Housing Emergency") and on the board's determination of fair market rates.

  • Administrative costs would be covered by a maximum 2 percent fee on rent-controlled units, paid by the tenants, with low-income tenants exempted from the surcharge.

  • Applies to all rental units except those built after 1999; those in owner-occupied structures with less than four units; and government-managed properties.

  • Landlords can apply for exemptions for financial hardship, or if they accept low- and moderate-income tenants from a city-maintained list.

  • Tenants have the right to purchase their rental units before other bidders when offered for sale.

    The new system would apply to about 17,000 rental units across Cambridge, which translates to about 33,000 people, or 32 percent of the Cambridge population. For comparison, the U.S. Census indicates that about 11,000 people in Cambridge are below the poverty line. Hence, even if all the people in poverty are tenants instead of owners, the new rent-control system applies to moderate-income people as well as low-income people. About 900 landlords own the properties that would be subject to rent control.

    The CCRC estimate the administrative costs for the Rent Control Board at $1.5 million to $2 million. That would be paid for by the surcharge on rent-controlled units.

    The city manager would appoint the five-member Rent Control Board. The board would have power to decide rent levels, as well as to determine which units are subject to rent control and when landlords can move units out of rent control. Many details of the rent-control proposal are left to the discretion of the board, which means many questions are left unanswered, such as:

  • How will we deal with the situation where well-paid government officials reside in rent-controlled apartments?

  • How will we demonstrate that low- and moderate-income people are indeed finding residences in Cambridge that they would not otherwise have found?

  • What are the larger economic costs of rent control, such as the loss of property tax revenue to the city due to decreased property values?

  • Couldn't the Affordable Housing Trust achieve the same results in a less intrusive manner?

    On the last question, Cavellini offers, "We support the AHT," which is another city-run board that buys and rehabs buildings, and makes them permanently affordable by operating them via nonprofit organizations. "But when rent control was abolished, we originally asked for $10 million per year for 10 years for AHT - the minimum to get some units on board for low- and low-moderate- population that was hanging on by their fingernails. Funding started at $2 million per year and is now only at $4.5 million per year." The result is that AHT only produced a few hundred units.

    The CCRC is confident they'll get a majority vote in favor of the proposal. But they need a two-thirds vote to force the City Council to submit a Home-Rule Petition. And then they need a veto-proof majority in the state Legislature, because Gov. Romney has signaled his clear opposition to rent control.

    The city councilors and candidates for City Council will address rent control and other housing issues as part of a debate on the evening of Oct. 15 at 7 at the YWCA on Temple Street, moderated by Robert Reich. See www.CambridgeCityCouncil.com for details.

    (Jesse Gordon chairs the Progressive Democrats of Cambridge.)