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The latest analysis of proposed rent control in Massachusetts focuses on its effects on the 62 percent of households that own their homes, predicting median single-family homes would pay an additional $312 a year in property taxes to offset lost revenues from the rental property sector.
“It’s very easy to say, `This is an important issue, but it doesn’t affect me.’ What we demonstrate is: it’s everyone’s issue,” said the report’s author, Jared Walczak, during a briefing today.
The nonprofit Fiscal Alliance Foundation has been studying the potential effects of rent control since 2022, when Mayor Michelle Wu unsuccessfully sought to enact rent stabilization in Boston. A potential ballot question in November would impose rent control on a statewide basis, with some exemptions for new construction and owner-occupied properties.
The higher the concentration of rental properties in a community, the more significant of a shift of the tax burden onto homeowners would occur, the report said. Rent control would add a projected $1,117 to the average homeowner’s tax bill in Boston, $570 in Lowell and $486 in Concord. Median residential tax rates would rise a projected 5.9 percent statewide.
“Urban areas and higher densities are where you would see the most significant increase,” Walczak said.
The report is based upon studies of rent control in San Francisco, St. Paul, Portland, Maine and Cambridge, where rent control was abolished in 1994 by a statewide ballot referendum.
Capping rent increases, as proposed in a potential statewide ballot referendum this year, would depress assessed values of rental properties and discourage landlords from investing in maintenance, the report concluded. Passage of rent control would prompt conversion of some properties into condominiums, and increase housing scarcity by discouraging development, the report said.
A recent analysis by the libertarian Cato Institute predicted rent control would fail to provide relief to low-income households’ budgets in Massachusetts.
“A high-earning Back Bay tenant would receive the same protection as a low-income family in Chelsea, and – in dollar terms – a larger benefit, because the cap is a percentage of a higher base rent. The transfer of resources would run from landlords to incumbent tenants – not from landlords to whomever is most in need,” the report states.
The Cato Institute said Massachusetts should abolish single-family zoning and streamline permitting to stimulate new housing supply.
Political leaders including House Speaker Ronald Mariano and Gov. Maura Healey have stated their opposition to the potential ballot question, predicting it would have unintended consequences on housing costs and tax revenues.
The report release comes amid recent discussions on a potential compromise between rent control supporters and a small group of opponents, which would avert a high-stakes statewide ballot question in November.
The Homes for All Coalition, sponsor of the ballot question, has until July 1 to submit the final round of signatures to state officials and send it to voters in November. The group has been in discussion with some private developers and community development corporations on a different model that would let rent rise at the rate of inflation plus 5 percent, up to a maximum of 10 percent, and require local communities to opt in rather than a statewide mandate.
“It is a change, but it doesn’t change the analysis in any jurisdiction that adopts this,” Walczak said of the potential compromise version.
