Edwin J. Shanahan – Discourages developers
A feud between tenant advocates and real estate leaders has been reignited by a recent Boston City Council vote to preserve affordable housing units.
The City Council unanimously approved a home-rule petition that would allow an established board to set rents at so-called expiring use properties – federally financed affordable housing units that under contractual agreements are eligible to be converted to market-rate rentals once the mortgages are paid off.
Supporters maintain the measure would protect roughly 8,000 units in the city that are at risk of being converted to market-rate units and keep elderly and low- and moderate-income families from losing their homes.
But opponents argue the petition, which needs the approval of state lawmakers, amounts to rent control and question its legality. They say under contracts signed – in some cases 20 to 30 years ago – the rents at these properties are already restricted. But once those agreements expire, the property owners have the right to raise rents.
They also believe the home-rule petition has little chance of passing in the State House since similar measures have languished in committees or been vetoed by the governor in the past.
They [city councilors] made the mistake before. They made it again, said Edwin J. Shanahan, chief executive officer of the Greater Boston Real Estate Board, referring to the council’s unsuccessful attempts to pass a similar measure several years ago.
The bottom line still comes down to the fact that if Boston were to impose rent control on any segment of its housing stock it would be analogous to being a little bit pregnant, said Shanahan. The city either has rent control or it doesn’t have rent control.
Supporters dispute those arguments. They say the 1994 ballot initiative that abolished rent control in the state originally exempted federally subsidized or governmentally involved properties.
The objections of the opponents are the typical lies and misinformation designed to mask the naked greed of a handful of very wealthy developers, said Michael Kane, director of the Massachusetts Alliance of HUD [Department of Housing and Urban Development] Tenants.
Kane criticized landlords for trying to make a windfall by charging higher rents for housing built with taxpayers’ money.
Further, supporters argue that the state Senate has approved two similar bills this year. One bill, which would authorize communities to protect low- and moderate-income tenants and units of government-subsidized housing, was passed in the spring, and a similar bill was attached to the Senate’s version of a wide-ranging housing package. The bill is currently with the House Ways and Means Committee and the housing package has yet to be hashed out by House and Senate leaders.
Advocates like Kane also point to a letter written by Senate Counsel David E. Sullivan that states the Senate bills do not violate the ballot initiative that eliminated rent control in Massachusetts.
[The Massachusetts Rent Control Prohibition Act], which generally prohibits rent control, does not apply to the governmentally involved housing regulated by the legislation, wrote Sullivan in a letter dated Oct. 23 to Sen. Guy Glodis of Worcester. [The law] defines prohibited rent control specifically to exclude publicly subsidized housing and federally assisted housing.
Opponents, however, say that similar measures have failed in the past. Milton recently voted down a home-rule petition, and Quincy’s petition, filed more than a year ago, has languished in the State House. Quincy filed the petition when there was talk that the owner of Wollaston Manor, a HUD-financed senior housing complex, was going to increase rents. Eventually, another company bought Wollaston Manor and committed to preserving the affordable units.
In the meantime, similar petitions to preserve affordable units at expiring-use properties are pending in Salem and Dartmouth.
Some argue that communities don’t need such measures since Congress and state agencies are taking steps to make sure that people living in these properties are not left homeless.
Shanahan points to the enhanced sticky voucher program that Congress passed in 1999, which entitles Section 8 voucher holders in expiring-use apartments to a rent subsidy that can be used in other market-rate units.
And in Massachusetts, some agencies are helping to preserve rent affordability at a few of these properties. For example, MassHousing, formerly known as the Massachusetts Housing Finance Agency, offers the Friendly Prepayment Program. The program allows expiring-use property owners to prepay their mortgages with new mortgages that require them to keep at least 20 percent of their units affordable for the term of the new mortgage.
Earlier this year, MassHousing provided millions to preserve and improve Symphony Plaza East and Symphony Plaza West in Boston.
Symphony Plaza East, a 188-unit apartment building at the corner of Massachusetts and Huntington avenues that was built 23 years ago with federal money, houses mostly low-income elderly and disabled people. Across the street from the apartment building is Symphony Plaza West, a 216-unit apartment building. Both were in danger of being converted into market-rate apartment buildings until MassHousing stepped in with loans to keep all existing low-income units affordable for at least 30 more years.
MassHousing also provided tax-exempt bonds to Boston developer Trinity Financial to preserve the affordability of Mass Pike Towers, 200 apartments in the city’s Chinatown neighborhood.
‘Devastating’ Implications
Still, affordable housing advocates can point to dozens of other affordable properties that may not be saved – including Forest Hills Apartments, 108 units in Jamaica Plain and Rutland Housing, another 44 apartments in the South End.
I just feel that the impact would be devastating if we didn’t take a stand on this segment of housing, said Boston City Councilor Maureen E. Feeney, chairman of the housing committee that recommended passage of the home-rule petition.
Feeney originally wanted to delay voting on the petition, proposed by Mayor Thomas M. Menino, after hearing concerns about the unlikelihood of state lawmakers approving it. Feeney said she would have liked to meet with state leaders to see if we might be able to identify language changes that might make this something that the House could support.
I do not want to see rent control re-implemented, Feeney emphasized. I don’t think that is healthy for the city.
Feeney also expressed the same concern voiced by Shanahan – that the rent restrictions would send the wrong message to housing developers. Even though city leaders keep calling for more housing production, when such regulations are passed, it shows developers that they do not want housing built, said Shanahan.
It does not encourage additional housing development by regulating the existing supply of housing, said Shanahan.
The City Council vote came several weeks after the Boston Tenants Coalition, which supports the home-rule petition, released the results of an affordable housing survey given to district and at-large candidates for council seats.
Five at-large candidates said they supported a petition to prevent rent increases in expiring use buildings. Stephen J. Murphy, a current at-large councilor seeking re-election, sent a letter saying he has supported affordable housing during his career, but failed to answer the specific survey questions. Phyllis Yetman Igoe did not respond at all.
The other candidates – incumbents Michael Flaherty, Mickey Roach, newcomer Rob Consalvo, former School Committee member Felix Arroyo and current district Councilor Maura Hennigan – said they supported Boston’s petition.
