Evictions In East Boston: Landlords On What A 'Just Cause' Ordinance Would Mean

Part two of our special four-part series, "Evictions in East Boston."

Long-term tenants are being pushed out of neighborhoods like East Boston that are undergoing rapid transformation. Housing advocates say the problem is so acute, they're pushing for a significant change in city housing laws, a so-called "just cause" eviction ordinance.

"This ordinance would require corporate landlords to have a reason to evict a tenant at will," says Lisa Owens-Pinto, executive director of City Life/Vida Urbana. "If the corporate landlord wanted to raise rents a lot, then they would be required to sit down in non-binding mediation with the tenant or the tenant association, to try to come up with a reasonable solution. If they are not able to come up with a mutually agreeable solution, then the corporate landlord would go ahead with a no-fault eviction."

Skip Schloming, executive director of Small Property Owners Association.

Greg Vasil, CEO of the Greater Boston Real Estate Board, which tweets @GBREB.

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On his reaction to the proposal in Boston for a "just cause ordinance":
Greg Vasil: "Just cause would have a tremendous cause and effect on the real estate market in Greater Boston. As we all know, the market in the city is quite hot. There's tremendous development, there's tremendous production. The result of that is the simple fact that Boston, for many years, didn't produce enough housing. Just now, we're getting to the point where we can. And our struggle is that we're producing for the high-end of the market, not for the the middle- and lower-income numbers. The factors are labor, materials and, certainly, land costs. If we add more bureaucracy and government red tape to this process, it is going to be an absolute nightmare and it will chill the market in Boston and send us back to the dark ages of rent control."

On the housing advocates arguing for the ordinance:
GV: "These representatives aren't advocates for the middle class. They're advocates for lower-income people, affordable people, not the people in the middle class sector. If you take a look at the plan that the mayor's put forth for his housing agenda, he's truly trying to build for the middle class, for a lot of working families. Not people who are on subsidy, section eight, people who can't earn too much money because they'll lose their housing."

On whether he sees the "just cause ordinance" as a return to rent control:
Skip Schloming: "Yes. The tenant advocates that are proposing it desperately have wanted rent control to come back. They've tried three times in the past, around 2004, and they failed. And, we showed the general taxpayers in the city what's wrong. This is a devastating control of the housing being taken away from the owners and given to a bureaucracy. And, it's not about corporate developers. That's what the advocates are calling it. But...the controlled owners involve every non-owner occupied two, three, four and larger buildings, and that includes many, many small owners who live just next-door or down the street."

On the ordinance exempting owners with more than four units:
SS: "It's more than four units, yes, but it's also less than four units if they're not owner-occupied. These are small owners, and you can consider a small owner someone who self-manages the property rather than hiring a management company. So, you can own a number of units and live close-by and manage them very well and yet you're labeled with this bad label of absentee landlords. It's going to affect these landlords. These are not corporate developers."

GV: "I think when you take a look at what has been produced, especially these corporate developers that they're targeting, are we looking to do just cause evictions for people that are paying, $3,000, $4,000, $5,000 a month? I mean, it paints with an awfully broad brush. When we take a look at what we're trying to do, the inclusionary zoning requirements for the city have just been changed and have been upped and the fees are higher. There's a great step in the right direction to creating more. What the advocates have to realize is, this isn't the land of oz where you click your heels and snap your fingers and suddenly we have all these units. It takes time. It's a cycle. The reason we're in this mess is because nobody invested in Boston and built in Boston for a very, very long time."

On possible unintended consequences, like shifting the property tax burden to non-controlled owners:
SS: "They are going after stopping all condo conversions — stopping all major renovations and doing everything they can to keep rents down. And, it means that the value of those properties will decrease immediately, as soon as this goes on. And then, as time goes by, if you're not able to do capital improvements...All rent increases that are more than 5 percent get reviewed under a lot of pressure on the landlord to not raise the rent. Those are the rent increases that'd be necessary for capital improvements being made. So, if you can't make capital improvements, the housing steadily deteriorates, so it's going to keep going downhill...just as it did under rent control. I mean, I lived in Cambridge. You could go house by house by house and you could tell which ones were rent controlled."

On the non-binding mediation the proposal would require for rent increases of more than 5 percent:
SS: "It's not mediation. All the rights from the side of the tenant — they get to have [a] free lawyer, they get to have tenant advocacy groups there, and the landlord's own tenants will be notified and brought in...They're the most powerful force because they will be facing rent increases, and the advocates will turn all those tenants against their landlord. And, no landlord wants to have hostile tenants instead of a rent increase."

On his argument that the proposal would "hasten the death of small property ownership":
SS: "The people who can handle this bureaucracy, who can hold out against the pressure about raising rents and raise them are larger owners...the real corporate owners. But, if you're on a one-to-one basis with your tenants, it makes housing much easier to manage. And, if it turns hostile all the time, which is what the tenant advocates want, they want that to be a hostile relationship...Mediation sounds friendly, this mediation...no way, will it be friendly."

On Matt Nickell's argument that developers are trying to get current residents out of neighborhoods like East Boston to construct a "new kind of neighborhood":
GV: "He didn't tell you that there's a contractual relationship between the landlord and the tenant. Chances are, these folks are only allowed to be there for 30 days if they're tenants-at-will. So, if a landlord owns a property and a tenant only has a 30 day tenancy-at-will, there's no guarantee that tenant could be there beyond. The landlord chooses not to renew — that's pretty well-established across the United States of America, the way we understand...When you look at this just cause concept, if you take a look at a literature search, it's really been tailored for rent control communities — rampant in California, places like New York, New Jersey, but rent control there means something different than rent control here. In our model of rent control, there was no subsidy back to the landlord for capital improvements. In their form of rent control, there is a subsidy back to the landlord. So, consequently, what we saw in Massachusetts with the Massachusetts version was decaying properties and no reinvestment in the properties. And that is a huge problem."

SS: "Literally, if you freeze the neighborhoods as they are, not put money into them, leave the rents where they are, not allow capital improvements, this is just going downward. There needs to be a process in some neighborhoods of renovation in order to get older buildings up and ready for the future, because we have beautiful housing in this city and yet we would be losing it because of deterioration."

On whether it's a problem if most current residents of neighborhoods like East Boston soon won't be able to afford to stay:
GV: "Let's take a look at the South End. If you take a look at the South End through the 80s and early 90s...[It] was probably a tougher neighborhood than East Boston currently is. And, real estate runs in cycles. People view gentrification as evil. Gentrification is a sign of economic strength. It's a good thing, because if we find a way to use gentrification and the improvement of neighborhoods the way we should be doing it — by producing housing for all, like the inclusionary zoning policies of the city, like the linkage fees the city provides, we could build communities where we have housing for lower-, middle- and higher-income people altogether. That's our goal."

SS: "And there's an option that is no-cost to the city at all, and it would require a zoning change, and that is to make accessory apartments and subdivided larger apartments. Now, what this means is, you can put an apartment in a basement or in an attic — you have to bring it up to code. Or, in the backyard as a so-called 'in-law cottage,' or you take the large two- and three-bedroom apartments in triple-deckers and divide them into two smaller apartments. Now, our households today are much smaller than they used to be, so these smaller spaces would be ideal and they would be plentiful all over the city and it doesn't take anything except a zoning change to get them to happen."

On whether there's a role for government to protect the middle-class:
SS: "It's a difficult concept to have everybody else be subsidizing the middle-class, which is already in fairly good shape, economically...It's shrinking, but I'm not sure that they need reinforcement."

GV: "I think that the middle-class is shrinking is exactly right, and I think it's a result of some of the policies that we've seen. But I also think it's a result of a global economy. When you look at Boston and the people that are acquiring here and buying these high-end units, there's a lot of foreign money. It's a lot of foreign investors and people that typically haven't been in this marketplace ever before. Rates have been low, money has been plentiful, they come to America. We've had groups from China coming over here, looking to snatch up anything they can. They first look at [the] Harvard, MIT area. Then they look at other areas of the city. There's a lot of international money that's come to Boston. They see it as livable, they see it as a fun place, they see it as a place they can send their kids to school...It's investment in our environment, it's something we can't stop. But how would it cut in a free market world where America is a free-market economy, where we come out to the world — we try to free the world and we come to the world and say, 'Don't invest in our cities'? That would be insane. So, I think it's something we have to deal with and then manage, so I think government needs to be smart in how they work with the development community to create units at all income levels."

SS: "[Just cause eviction] will stop all housing construction, period. The unions will be out of luck, the mayor's goal — 53,000 units by 2025, will never happen."

GV: "Here's the concern I have about just cause — is it even manageable? There's several hundred thousand units of housing — who's going to handle these cases? What's the backlog going to look like? It's going to be just unbelievable. How's it going to be paid for?"