Shawn McCormack

A confluence of forces, triggered by the coronavirus pandemic and the governmental responses, is pushing the Greater Boston residential rental market to a day of reckoning. What the market will look like in its wake may be a rental world dreamed about for years by some housing advocates, with features representing some landlords’ worst nightmares.  

With the commonwealth’s eviction moratorium set to expire Aug.18, Massachusetts is facing a potential “tsunami of evictions,” according to coverage in many local media outlets. A study by the Metropolitan Area Planning Council indicates that as many as 178,000 households may be unable to pay their rent or mortgages when the moratorium expires.  

This looming crisis has tenant advocates calling for a moratorium extension and has triggered renewed interest in rent control and guaranteed legal representation for tenants in eviction hearings. While landlord groups have generally opposed such measures, and have challenged the Massachusetts eviction moratorium in court, the status quo is unlikely to hold. The various interest–holders are positioning themselves to survive the moment with a set of rules they can live with. Here is a look at some issues at play. 

Sandy Moskowitz

Will Moratorium Be Extended or Struck Down? 

Gov. Charlie Baker has authority to extend the eviction moratorium for an additional 90 days, provided it expires no later than 45 days after the state of emergency ends. Landlord groups argue that the moratorium served its purpose: preventing people from moving and risking coronavirus exposure; and stopping evictions of people who lost income due to the coronavirus shutdown. At the very least, they argue, evictions should resume for tenants who can afford to pay. 

Pressure is building, with Chief Justice of the Housing Court Timothy Sullivan anticipating a possible 20,000 evictions teed up for the moratorium’s expiration. The Baker administration responded with a $20 million rental and mortgage assistance program, although the estimated need dwarfs that. Short-term help also came from the state’s largest affordable housing landlord, WinnCompanies, which is voluntarily extending its own moratorium on tenant evictions for financial hardship caused by the pandemic. 

Taking the opposite approach, several landlords banded together to challenge the state’s eviction moratorium. Their challenge though suffered a setback when the Supreme Judicial Court declined to hear the case and sent it to the Superior Court for “disposition in the usual course.”  

The challenge, which alleges the moratorium violates the Massachusetts and U.S. Constitutions, will now have to work its way through the courts, currently operating at reduced capacity. Meanwhile, landlords face a renewed threat: reintroduction of rent control, 25 years after it was rejected in a statewide referendum. 

The Return of Rent Control? 

Two rent control bills are working their way through the Massachusetts legislature.  

HB.4718, “An Act providing for a rent increase freeze in response to COVID-19,” would empower the Massachusetts Department of Housing and Community Development, or any city or town, to impose “a rent freeze and/or rent control,” for the period of the COVID-19 declared emergency plus 30 days.  

HB.1316, “An Act relative to the stabilization of rents in towns and cities facing distress in the housing market,” would be longer lasting and allow municipalities to limit rent increases to the inflation rate or 5 percent, whichever is less. Advocates on all sides are dusting off arguments for a renewed debate, with potential new and drastic consequences. 

Rents may, nevertheless, be headed for a fall. Some housing experts predict that, without an extension of the moratorium or a significant new housing assistance program, a flood of evictions and vacant properties could cause rent prices to fall, possibly dramatically. San Francisco has reportedly seen double–digit decreases in residential rents. This result may be amplified if student housing demand is severely reduced because local colleges keep much of their student bodies away from campus. 

A Right to Counsel 

For small landlords, other threats are also growing. The anticipated wave of evictions has renewed interest in “Civil Gideon,” named after the 1963 U.S. Supreme Court decision in Gideon v. Wainwright, which recognized a criminal defendant’s right to legal counsel. The legislature is now considering a proposal to provide counsel to tenants in eviction cases. SD.2971 would create a one-year pilot program providing lawyers to indigent tenants facing eviction. After a year, an advisory council would recommend whether or not to continue the program.  

Landlord groups oppose the idea, arguing it would simply delay the inevitable and drive up eviction costs, ultimately resulting in higher rents. A recent report from the Boston Bar Association, however, suggests that providing legal representation in eviction proceedings would save the commonwealth costs associated with homelessness, including emergency assistance and shelter, health and foster care. While this idea has long been on the wish list of anti-poverty advocates, the health, economic and racial crises roiling the country have propelled it to serious consideration here. 

Whether the commonwealth ultimately provides an effective relief package will likely ride on how these legislative and judicial efforts play out. It is becoming apparent, however, that whatever is adopted, it – like the coronavirus – will have wide and long-standing repercussions. 

Shawn McCormack and Samuel Moskowitz are real estate attorneys at the Boston law firm of Davis Malm.