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Rent control won't solve Boston's housing crisis

Renters' rights groups rally outside the Massachusetts State House in Boston on Jan. 14, 2020, also flooding the Joint Committee on Housing on Beacon Hill, to call for the return of rent control. (Lane Turner/The Boston Globe via Getty Images)
Renters' rights groups rally outside the Massachusetts State House in Boston on Jan. 14, 2020, also flooding the Joint Committee on Housing on Beacon Hill, to call for the return of rent control. (Lane Turner/The Boston Globe via Getty Images)

My landlord charges an unusually reasonable rent for greater Boston and is understanding about other financial matters. (He swallowed the bill for a new microwave after I accidentally fried the old one’s mechanical guts.) Others aren’t as fortunate as I in a region famous for housing costs that would make the architects of the Taj Mahal blush. Hence the excitement over Boston Mayor Michelle Wu’s campaign call for rent control as the solution.

It’s not. At least, strictly straitjacketing rents, as was done in some Massachusetts cities before voters abolished rent control in 1994, isn’t the answer. An economist from democratically socialist Sweden, theoretically a place congenial to such regulation, called rent control “the most efficient technique presently known to destroy a city — except for bombing.”

His colorful hyperbole should not obscure the research consensus, summarized by Harvard’s Shorenstein Center, that “strict rent controls can depress property values for rent-controlled and nearby market-rate buildings,” and that “landlords and developers may respond in the long run by building more expensive housing not subject to rent regulation.”

That consensus also suggests a better solution — one that Wu herself campaigned on.

An economist ... called rent control “the most efficient technique presently known to destroy a city -- except for bombing.”

I’ve rented for three of the four decades since college. My landlords have ranged from lovely human beings to jerks, a diversity that my apartments, with one exception, lacked in this respect: they weren’t under any form of rent control or stabilization. That I nonetheless found mostly good deals was the product of careful shopping and an occasional assist from serendipity. Those factors can’t be national housing policy, when almost half of American renters in 2017 paid the landlord more than 30% of their income, economists’ red line of affordability.

Since then, the pandemic sent housing prices soaring even more stratospherically. Yet as medicine for the inflation in shelter costs, rent control, its most intelligent advocates concede, is a Band-Aid. It can’t fix the root cause of through-the-roof-rents, which is the deficit of housing, pegged by Freddie Mac at almost 4 million units nationwide. If anything, rent control would worsen that shortage, by reducing the profit in building housing.

Rent constraints also have a real-world history of dissuading property upkeep by landlords. After Massachusetts did away with rent control, landlords in Cambridge – which tightly leashed rents before the referendum – spent gobs more on building improvements.

It’s true, as the Shorenstein Center notes, that “less restrictive rent regulation is not associated with lower rates of new housing construction or lower overall property values.” My native state of New Jersey is the key lab for that observation, with more than 100 towns and cities having employed rent control in recent years. But Jersey’s ordinances were more flexible than Cambridge’s. Rent increases typically were allowed to track inflation or else hover in a range set by law.

A 2015 study found rent-regulated Garden State municipalities averaged $63 per month less for an apartment than communities with a laissez-faire approach. For people budgeting to the last penny each month, that could mean the difference between solvency and a bank overdraft. At the same time, when the researchers looked at data from the first decade of the 21st century, they saw no significant difference in housing construction between places with and without rent regulation. Nor did rent-controlled municipalities have major drops in property values vis-a-vis the uncontrolled.

So, if Wu pushes smartly flexible restrictions, she’ll at least help some current tenants while heeding the injunction to do no harm. Of course, doing no harm is not the same as curing the illness. That requires new housing construction.

Wu knows this. She sagely endorsed – and Boston suburbs desperately need – a repeal of restrictive zoning against rental units. Exclusionary zoning around the country originated as a racist whitening of neighborhoods. It is “the biggest cause of America’s [housing] supply crunch,” and therefore of unaffordability. The just-passed House version of Build Back Better appropriately proposes to pay communities to roll back exclusionary zoning, in case numbed local consciences need a prod.

Meanwhile, a Massachusetts law requires towns with mass transit stations to zone for apartments nearby. If guidance from the state on compliance pacifies local anxiety, it will bulldoze one critical obstacle to building more housing.

We’re a week from Christmas, its origin narrative involving a poor family forced to take refuge in a manger because there was no room at the inn. The Holy Family’s temporary homelessness stemmed from the same plight as ours, a mismatch between housing supply and demand. What a holiday gift for renters in the 21st century if their leaders were to spend their time on wise fixes. Mangers won’t do it, nor rent control. Better to do with bigotry-based zoning restrictions the same as with gift wrapping the day after Christmas – toss it.

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Rich Barlow Cognoscenti contributor
Rich Barlow writes for BU Today, Boston University's news website.

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