Boston City Hall and the neighboring John F. Kennedy Federal Building. File photo by James Sanna | Banker & Tradesman Staff

After 15 months in office, Boston Mayor Michelle Wu on Monday finally unveiled a proposal to cap rent increases across the city at a maximum of 10 percent in high-inflation years, filing a multi-faceted rent control revival measure that will first go before the Boston City Council.

Wu sent the council a home rule petition that, if approved by both local and state policymakers, would allow Boston to limit how much landlords can increase rent on returning tenants each year.

Largely mirroring a draft version that floated into the public sphere last month, the formal proposal calls for setting the annual allowable rent increase at either 10 percent or at the Consumer Price Index for the Boston metropolitan area plus 6 percentage points, whichever is lower.

In a lower-inflation year where the region’s CPI increased only 2 percent, Wu’s plan would cap rent increases at 8 percent. But if inflation were brisker – say, 6 percent – rents could not grow more than a total of 10 percent under the petition.

Rents Up 14 Percent

The mayor’s proposal is a far cry from harsh rent control regimes in places like Washington, D.C., New York City and St. Paul, Minnesota, more in line with a new generation of measures passed in recent years, but developers and landlord groups are still sounding the alarm over what they’ve been terming a “failed policy.”

Wu has characterized her proposal as less traditional rent control and more “guardrails” and a means to prevent “rent gouging” – sudden, “unnecessary and very destabilizing” hikes in rent, as she termed it in an appearance on GBH News’ “Boston Public Radio” show last month. However, tenant activists have called her proposal insufficient, raising questions whether some of the Boston City Council’s more left-leaning members will support it versus something more restrictive.

In a letter to councilors that accompanied the home rule petition, Wu said advertised rents across Boston increased by 14 percent in 2022, with some specific neighborhoods experiencing jumps in rent exceeding 20 percent.

“This Home Rule Petition will enable the City of Boston to implement rent stabilization to better protect families from displacement caused by exorbitant increases in rent,” the mayor wrote. “The measure would place needed limits on rapid rent increases to existing tenancies and ensure more stability for Boston residents by providing a level of certainty regarding how much their rent could increase each year. Tenants in Boston are often victim to steep rent increases, making it impossible for them to stay in their homes.”

According to apartment-listings database Boston Pads, the average rent on a one-bedroom hit $2,349 as of Jan. 1, while the average rate on a two-bedroom hit $2,864 – up 16.06 percent and 13.56 percent, respectively, from Jan. 1, 2022.

Exemptions for Small, New Buildings

Landlords in several instances would be exempt from the cap on rent increases. No limit would apply when a new tenant moves into a residence and a landlord sets an initial rental rate, and the cap would only kick in for subsequent hikes.

Any property with six or fewer units, one of which is the building owner’s primary residence, would not be subject to the rent control policy. That’s a change from an earlier draft, which would have exempted owner-occupied properties with three or fewer units.

Preventing the cap from applying to the newest housing construction, dwellings would not face a cap on rent increases if their permanent occupancy certificates are less than 15 years old and they were built from the ground up, added to an existing building or converted from another use to residential.

Units where tenants pay a set percentage of their income to rent, such as public housing and those supported by vouchers, would also be exempt from the rent control, as would hotels and motels, housing in religious facilities, extended care, residential care and nonprofit hospitals, college and university dormitories, and dwellings where tenants share bathroom or kitchen accommodations with the owner.

‘Just Cause’ Eviction Included

Wu’s proposal features several other provisions she pitched as ways to protect tenants.

“Under this proposed law, tenants could only be evicted for cause, such as failure to pay rent, substantial violations of the lease, or use of the unit for illegal purposes,” she wrote. “Moreover, tenants who are subject to a ‘no fault’ just cause eviction would be entitled to receive relocation fees.”

The petition would also authorize the city to regulate the conversion of residential space to condominiums or cooperatives and to impose tenant notification and relocation requirements.

Real Estate Critiques Plan

Rent control has been banned in Massachusetts since voters approved a 1994 ballot question, backed by the Small Property Owners Association. At the time, only Boston, Brookline and Cambridge had rent control in place, and a majority of voters in each of those three communities supported keeping the policy.

The topic remains a source of debate, with real estate and landlord interest groups arguing that rent control would stifle housing production at a time when Massachusetts is already laboring under the strain of a major housing shortage, and pointing out that the old system eventually resulted in more white and upper-income people living in rent-controlled units than people of color or poorer peopel.

“Rent control, also known as rent stabilization, is a proven failure. It increases housing costs, discourages upkeep and maintenance, and disincentivizes construction,” Greater Boston Real Estate Board CEO Greg Vasil said in a statement Monday. “We strongly oppose Mayor Wu’s plan to bring government price controls on housing to Boston because it would make the region’s housing crisis even worse. Instead, the city – and all of Massachusetts – should focus on passing pro-housing policies that reduce red tape, encourage construction, and lower overall costs.”

Former Gov. Charlie Baker was also an opponent before he left office in January.

Wu has pitched rent control as one tool among several needed to counteract a housing crunch that pushes families out of their homes and makes Boston a less attractive place to live.

“It is such a dire, destructive housing market out there right now, with people who have spent their whole lives here, who are raising their kids, who are giving back in every single way, getting pushed out, not because they’re not fighting to work and pay for what they can afford but because that shock of a sudden, dramatic increase is just not something you can plan for,” she said in a radio interview in January.

BIll Faces Long Road Ahead

Before it could take effect, the mayor’s proposal would need to win approval first from the council, then the legislature and Gov. Maura Healey. Top Democrats in the House and Senate have not included local-option rent control on their list of priorities. Healey has not staked out a firm position on the topic, saying last month that her opinion on rent control “remains that I support the efforts of local communities to make those decisions.”

Healey has highlighted solving the state’s housing affordability problems as a priority but has yet to file a plan to create a promised state housing secretary, or outline a legislative package to address the issues.

Bills seeking to replace the statewide ban with a system of local-option rent control have stalled out on Beacon Hill in recent lawmaking sessions.

The petition is on the council’s agenda for its meeting Wednesday, where it will likely get referred to a committee for a future hearing.