Senate leaders have approved a housing bill that prohibits rent increases at so-called expiring use properties and makes it tougher for landlords to collect rent during disputes over health code violations – moves that local Realtors have rallied against.

The Senate also approved an “inclusionary zoning” measure last week that would permit communities to pass laws requiring developers building 10 houses or more to set aside 10 percent for low- to moderate-income households.

Critics of inclusionary zoning, including the state’s homebuilders, said the measure would create an unfair financial burden on developers and would further hinder the production of affordable housing. Builders say they would be forced to hike the prices of the market-rate homes in order to pay for the “affordable” homes in a development.

Earlier this summer, the House approved a housing bill that makes sweeping changes to Chapter 40B, the state’s so-called anti-snob zoning laws. The House housing package did not include inclusionary zoning and rent limitations on expiring-use properties, but did include a different version of the rent escrow provision. A conference committee will meet in upcoming weeks to come up with a compromise bill.

For years, Realtors have been pushing for a law that would require tenants to continue to pay rent even when they have a dispute with a landlord over a health code violation. Realtors were thrilled when the House approved a housing bill requiring tenants to put money into an escrow account.

But the Senate proposed an amendment that “creates a whole other bureaucratic process,” according to Joy Conway, senior vice president of government and industry affairs for the Greater Boston Real Estate Board.

The Senate’s version requires landlords to file a lawsuit and start the eviction process before tenants have to start paying rent into an escrow account.

“We’re not quarreling with the right of the tenant to withhold rent during disputes over sanitary health code violations,” said Conway.

But landlords across the state say many tenants have alleged health violations, withheld rent for months, and then moved – never to be heard from again. Conway said the Senate’s version does not “eliminate the incentive” for such abuses.

Conway said the Senate’s vote and debate on the subject shows that more lawmakers are beginning to understand it.

She also said extending rent limitations on expiring use properties is really a form of rent control.

“We oppose that very strongly,” Conway said.

The legislation applies to housing built with government assistance some 20 years ago where tenants pay below market-rate rents. Under the Senate bill, communities would be allowed to cap rents at those properties even though under agreements signed years ago, landlords are free to increase rents once they’ve paid off their loans.

Conway said the issue has been dealt with by Congress, which set up a housing voucher program that protects tenants already living in that type of housing.

“If Massachusetts wants to decide that it wants to solve the problem by slapping rent control on these properties, the tenants are going to lose out,” she said.

Under the state’s current Chapter 40B laws, 10 percent of a community’s housing stock must be affordable to low- and moderate-income households.

The Senate bill codified regulations passed in August by the state Department of Housing and Community Development pertaining to Chapter 40B, including a rule that allows communities to reject affordable housing projects if they had added low- and moderate-income units equaling 2 percent of their total housing stock.

The Senate bill goes a step further, however, allowing communities to count mobile homes as affordable housing if the homes are used year-round and occupied by income-eligible residents.

But unlike the House version, the Senate bill does not allow housing occupied by Section 8 voucher holders to be counted as affordable.

Bills on Inclusionary Zoning, Rent-Hike Prohibition OK’d

by Banker & Tradesman time to read: 2 min