The Massachusetts State House. State legislators will have to decide whether a proposed deal between four developers and backers of a rent control ballot question is worth supporting. iStock photo
A small group of prominent developers have put together a deal with tenant groups that could keep rent control off this fall’s ballot in Massachusetts.
But some real estate groups are already indicating they’d prefer to fight the issue out at the ballot box.
HYM Investment Group President Tom O’Brien, WinnCompanies CEO Gilbert Winn, Lupoli Companies CEO Sal Lupoli, The Builder Coalition Executive Director Dave Maddan and representatives of the Mass. Association of Community Development Corporations negotiated a compromise with the Homes for All Coalition over the last month, apparently independent of industry groups or the committee opposing the ballot question. The Homes for All Coalition, which is pushing the rent control ballot question, announced proposed legal language for the Legislature to consider Tuesday afternoon.
The deal would provide certainty to developers and investors, its backers say, while making it hard for individual municipalities to enact one-off rent control regimes. But it would mean accepting a form of rent control close to the looser “rent stabilization” ideas proposed five years ago by Boston Mayor Michelle Wu.
“No compromise has been reached on rent control. We were formally contacted by the Yes campaign on Sunday with language that differs from the proposed ballot question, including sections that remain problematic for housing creation and communities,” Conor Yunits, chair of the Housing for Massachusetts committee opposed to the rent control ballot question, said in a statement. “In good faith we will review their proposal, but the materials they sent us also differ from what they sent the press today. There have been no direct conversations between our campaign and the proponents.”
What’s in the Deal?
If the Legislature passed the deal into law, the Homes for All Coalition wouldn’t submit the final package of signatures it needs to file by July 1 get its rent control question on the ballot.
“While we made significant concessions in an effort to reach a true compromise, this legislation would achieve our primary goals of ending the state’s ban on rent control and enabling strong protections from excessive rent hikes and unjust evictions for Massachusetts residents,” coalition Executive Director Carolyn Chou said in a statement Tuesday.
While that proposed ballot question would effectively cap any rent increases at the rate of inflation – 2.9 percent in the Boston area in April, according to federal data – the deal finalized Tuesday would let it rise at the rate of inflation plus 5 percent, up to a maximum of 10 percent.
And instead of forcing the measure on every community across Massachusetts, the deal would make individual towns and cities opt into the measure. If they did, the law would also ban evictions that didn’t fit a list of exceptions, like non-payment of rent, lease violations or refusal to accept a legally-allowed rent increase.
A unit’s rent could be reset to market rate if a tenant voluntarily left, something sources on both sides of the negotiations portrayed as a major concession by pro-rent control forces.
The deal would also let landlords pass the cost of major repairs and improvements on to tenants, subject to the approval of a yet-to-be-specified state-level entity, keeping the decision out of the hands of municipal boards as proposed under the ballot question.
The deal includes exemptions for new construction up to 15 years old, short-term rentals, mixed-income housing developments and owner-occupied properties as big as four units.
CRE Groups Still Evaluating
But as word of an impending deal started leaking out Tuesday, it became clear that at least some rent control opponents are rejecting the deal out of hand, raising questions about whether the deal will pass muster with state legislators.
“Corporate real estate interests conceded just cause eviction and a return to 1970s rent control boards,” major landlord group MassLandlords declared in an email to the press Tuesday afternoon. “This is bad news for renters and mom-and-pop landlords who provide naturally occurring, affordable housing.”
The deal was an example of “mega corporations” selling out small landlords, MassLandlords said, particularly those who own small portfolios of units. The association has previously advocated for a program where the state pays landlords to limit rent increases.
The Small Property Owners Association also posted on X that it was not on board with the deal.
The two biggest real estate trade groups in Massachusetts, NAIOP-MA and the Greater Boston Real Estate Board, are still evaluating the proposal.
“There is no compromise or industry buy-in at this time. We are reviewing the proposal,” NAIOP-MA CEO Tamara Small said. “We are looking at the language very closely, but in no way supporting it. We haven’t even met with the proponent.”
Opponents Say Reason for Optimism About Vote
Real estate industry forces say they’ve assembled $30 million for a campaign to defeat the rent control ballot question this fall.
Word of the deal comes as that campaign is only just spooling up, and prominent rent control foes interviewed for this story say that gives them a reason to think they have a good chance at defeating rent control at the ballot box this fall, even as preliminary polling suggested the concept of rent control was generally popular in Massachusetts.
And the state Supreme Judicial Court is expected to rule later this month on whether the rent control ballot question is even legal.
State legislators have publicly and privately urged industry and the unions and tenant advocacy groups to negotiate, signaling unwillingness to hammer out a compromise themselves.
It now appears that the next move is theirs, and whether they think Tuesday’s deal would defuse longstanding demands for rent regulation while not destroying the state’s reputation among the real estate investors whose money is essential to solving Massachusetts’ housing crisis.
