Skip Schloming
The just-cause eviction proposal making rounds at Boston City Hall is the fourth attempt of the same players – tenant advocates and legal services lawyers – to bring rent control back to Boston after it was outlawed in 1994 in a statewide vote spearheaded by the Small Property Owners Association.
The latest proposal would give Boston just-cause eviction and mediation of rent increases, measures advocates claim are not rent control and will apply to “corporate developers only.” These nice-sounding labels are dishonest and a veritable Trojan horse for all Bostonians.
Only corporate developers? Hardly. The proposal would apply to all non-owner-occupied rental housing, from two-families all the way up to high-rise apartment buildings, and to buildings of five units or larger, even if they are owner-occupied. Many of the units to be controlled would involve small owners, often next door or down the street from their tenants. Only owner-occupied one- to four-unit buildings are exempt. Those corporate developers are few in number compared to all the owners of controlled housing. The potential impact on the city would be huge.
Half the proposal concerns just-cause eviction; the other half concerns rent increases. A carefully defined “just cause” would be required for every eviction in controlled housing, and the final decision allowing or not allowing eviction lies with the Rental Housing Resource Center (RHRC), the former rent control board.
Nine “just causes” are allowed, and these are carefully defined in favor of the tenant. Noise and disturbance of the peace must be “so disorderly as to destroy the peace and quiet of other tenants.” Damage to the unit must be “willful” and “substantial.” Nonpayment of rent must be “habitual.” Obviously, landlords and tenants would have to put up with quite a bit of unchecked behavior from some tenants. The landlord’s only effective tool to keep tenants in line – the threat of eviction – is largely gone.
For the other major part of the proposal – rent increases – the advocates tiptoe around the edges of rent control, claiming not to step over the line. They fail. All proposed rent increases over 5 percent, even between tenancies, must go through so-called “mediation.” The alleged goal is to stop condo conversions and “flipping,” but the impact of this part of the proposal would be far wider, stopping almost all renovations in all controlled housing.
Technically, landlords would be free, after mediation, to set a rent increase as they please. So the only leverage against rent increases, in the absence of out-and-out rent control, is to make the mediation process an awful ordeal for the landlord. We can infer that from the resources given to the tenant in mediation: a pro-tenant RHRC mediator, a free lawyer, tenant advocacy groups invited into the process, with whom the landlord “must mediate,” and all the landlord’s own tenants, who will be fighting to keep their future rent increases low. The landlord, meanwhile, gets nothing except the burden of proof. It’s not mediation in the ordinary sense of the word. It’s rent control by intimidation, harassment and threats, such as rent strikes. Many owners, especially small ones, simply won’t go through the ordeal and end up with hostile tenants year-round. They will be stuck indefinitely with 5 percent rent increases.
Spotting The Loophole
Besides this “mediation,” rent control lies hidden in the proposal’s language. Here’s where to find it. One of nine “just causes” for eviction is the following: “No landlord shall endeavor to recover possession … unless … the tenant has … failed to pay rent which is due and owing.” The critical words here are “due and owing.”
Regarding mediation, we read: “If no agreement is reached [in mediation], then the landlord … may proceed with a no fault eviction …” If there is no agreement, however, then the tenant has not agreed to the rent increase. And tenants cannot be legally bound to accept rent increases asked for but not agreed to by the tenant. Thus, the tenant cannot be evicted for not paying a rent increase that is not “due and owing.” Voila! Rent control.
This hidden outcome would effectively stop rent increases over 5 percent, even between tenancies. Tenants will be willing to defy their landlord’s wishes when they have support from advocacy groups, which will surely grow with this rent control. It means no renovations, no capital improvements, because such expenses cannot be recovered. Tenants prefer low rents. Improvements to someone else’s property? Not at all.
All the usual consequences from rent control will result. Lacking capital improvements, controlled housing across the city will deteriorate and keep on deteriorating. The assessed value of controlled housing will keep on declining. The property tax burden will shift to the non-controlled housing, and that burden will keep on growing. All new housing construction will stop. In 25 years or so, the city will face a major crisis in the exceedingly dilapidated condition of the controlled housing because the rent increases needed for improvements, even without rent control, will far outstrip the ability of tenants to pay for it.
Skip Schloming is executive director of the Small Property Owners Association. He may be reached at skore@comcast.net.
Editor’s Note: After the publication of this article, the Small Property Owners Association submitted the following:
We wish to correct an error we made in our op-ed “A Trojan Horse For Boston: Rent Control,” 1/11/16, in describing one way, among others, that rent control would be the outcome of the tenant advocacy proposal in Boston called “just-cause eviction.” We confused an “eviction for cause” with a so-called “no-fault eviction.” To state the issue correctly: If the “just-cause eviction” proposal were accepted into law and a landlord were to go through the mandatory process of “mediation” to get a rent increase greater than 5 percent, the landlord would be free at the end of that process to set the rent at whatever level desired. Contrary to what we said, an eviction for refusing to pay a rent increase could not be barred. Such a tenant can be evicted.
Our misinterpretation of the proposal’s legal language, however, reveals just one more way that it leads to below-market rents: landlords will avoid seeking rent increases over 5 percent – the maximum allowed without going through a harrowing “mediation” process – because the legalese is just too complicated to understand without the help of a costly attorney. Ironically, if landlords do hire an attorney and are no longer limited to 5 percent rent increases, the rents they will set freely will be extremely high, not only to cover attorney’s fees but to anticipate future large expenses without going through the “mediation” process again. With threats of rent strikes and rent withholding (the “free rent trick”), however, even hiring an attorney may not be worth it. By creating huge obstacles to raising the rent, the outcome is rent control without saying so.
