PROPONENTS OF a ballot measure that would have enacted one of the strictest rent control laws in the nation took care to make one thing clear: the limit would not apply to non-profits or religious institutions.

That brief line was ultimately their downfall before the state’s highest court.

In its final ruling of the 2026 ballot cycle, the Supreme Judicial Court blocked an initiative petition pushed by tenant advocacy groups that would have mandated all 351 cities and towns in the Commonwealth impose a rent control limit of inflation or 5 percent, whichever is lower. The SJC also clarified a constitutional boundary for future ballot petitions: It’s safer to leave the word “religion” out of it.

This marks the latest setback to reviving rent control in the Bay State, which was banned in 1994 through a statewide ballot question.

It also vaporizes momentum that proponents had been gathering in recent weeks as some real estate industry groups, long skeptical of the practice, came to the bargaining table to weigh policy changes that might still have gone down as a win for the campaign. A deal did not appear imminent, but the decision brings talks to a sudden halt and essentially guarantees the status quo will remain in place.

Because of the exemption for facilities operated solely for religious purposes, Justice Frank Gaziano wrote for a unanimous court that the proposal improperly touches on the topic of religious matters that under the state Constitution are off limits for ballot questions.

The exemption “would require the government to determine if a facility is [for a solely religious purpose],” Gaziano wrote, and “make an enforcement decision based on the facility’s religious purpose (or lack thereof).”

As a result, Gaziano wrote, the measure cannot appear on the November ballot.

The decision instantly dropped one of the most searing political fights of the year into an ice bath — for the second time in less than a week, after the court already spiked a proposal to cut the state’s income tax rate. The court also gave the green light to two ballot measures that would repeal recreational cannabis and usher in all-party primaries.

It averts a months-long season of aggressive campaigning that seemed sure to generate tens of millions of dollars in spending on attack ads and dire warnings about economic upheaval.

Rent control backers were looking to replace the rent control ban with a statewide limit on raising rents.

Certain properties would have been exempted under the ballot initiative. Rent control limits would not apply to new construction for the first 10 years, owner-occupied buildings of four units or less, most public housing, units typically rented to visitors for fewer than 14 days, and housing in educational or religious institutions.

A real estate coalition including several landlords challenged the measure in February, arguing that it should never have been cleared for the ballot. The major industry groups leading the opposition campaign offered their support for the legal fight in the form of amicus briefs.

“Today the Supreme Judicial Court confirmed that the nation’s most extreme rent control proposal was unconstitutional,” a spokesperson for the opposition group said in a statement. “While we firmly believe that Massachusetts voters were prepared to vote ‘no’ in November, today’s decision puts the issue to rest and protects our housing pipeline and our communities from the proven damage that rent control inflicts.”

Attorney General Andrea Campbell’s summary of the petition is inaccurate, they told the high court, and the initiative would unconstitutionally deprive landlords of the full market value of their property. Plaintiffs also said that the measure touches on specific issues like religion that are not allowed to be targeted in ballot questions.

The religious exemption caught the justices’ attention during oral arguments in May. There were few precedents in Massachusetts common law — rulings from courts rather than legislation — to guide the justices there.

They struggled with two difficult possibilities: Should the court embrace a sweeping rule that any ballot measure that explicitly mentions religion should be kept from voters, or subject themselves to case-by-case review every time a measure is challenged for mentioning religious purposes at all?

Why shouldn’t the test be “simple?” asked Justice Elizabeth Dewar. How, she asked, was the court supposed to handle a test where “you can explicitly mention religion,” but the court will then have to “make a judgment about whether it’s sort of controversially about religion.’”

The justices considered whether they should be looking at whether impacting religious practices was the “main purpose” of the language, but decided simpler is better.

Any standard that is “less exacting” and allows some measures that would govern religion would “contravene” the Constitution and its framers’ intentions, Gaziano said.

The directive from the court is straightforward: They don’t want to analyze the reason religion may be included in a ballot question. Leave “religion” out of the initiative, and there’s likely no problem.

Justice Scott Kafker, who was one of the more openly skeptical justices during oral arguments, offered a narrow concurring opinion. He would not have imposed a strict new rule on ever mentioning religion, though he agreed in this case that religious interests were involved.

Most of the ballot measure has nothing to do with religion, he wrote in his concurrence, but that single provision creates the need for a religious test of some kind. “This religious test also invites an intrusive review of religious beliefs and practices” that the Constitution does not allow, he said.

Noemi Ramos, executive director of New England Community Project and chair of the Yes campaign, characterized the suit as a “desperate attempt to avoid a ballot campaign” that real estate interests were “set to lose.”

“This decision is a massive disappointment after all the work that thousands of volunteers and advocates in every corner of the state put into qualifying our rent control initiative for the ballot, but it’s far from the end of our campaign to protect Massachusetts renters from excessive rent hikes,” Ramos said in the statement. She added, “While we disagree with the court’s interpretation, the issue raised by the court is easily fixable, and doesn’t affect the substance of our proposal.”

Top real estate groups argued that a statewide cap on rent increases essentially limited to no more than inflation would strangle housing production, in the process exacerbating the shortage of supply.

As the July 1 deadline for the campaign to lock in its spot on the ballot approached, some in the industry decided to pursue an agreement on a less aggressive rent control system. Real estate figures who were involved coalesced around a local option with a higher limit in an effort to win legislative approval and avert the need for a statewide vote in November.

Multiple sources close to the situation said the talks had been going through ups and downs — with both Gov. Maura Healey and Lt. Gov. Kim Driscoll personally hosting negotiations between the parties as recently as last week — but remained active into Monday night, the eve of the SJC’s ruling.

One of the three groups funding the opposition campaign, NAIOP, was at the negotiating table but had not yet settled on compromise language. The other two, the Greater Boston Real Estate Board and the Massachusetts Association of Realtors, remained committed to fighting the measure.

It’s highly unlikely those groups will give their blessing to any form of rent control now that proponents threatening to ask voters for a statewide cap have lost their electoral leverage.

Greg Vasil, the head of the Greater Boston Real Estate Board, on Tuesday invoked Winston Churchill’s “we shall fight on the beaches” speech while vowing to continue opposing rent control. “This thing,” he said, “was going to be bad for housing.”

“Whether we had the campaign and fought it that way, or had the solution decided by the SJC, the bottom line is we still have a housing problem,” Vasil told CommonWealth Beacon. “We’re spending time and money fighting about these issues instead of creating solutions for people. For me, whether I have to fight it going to the ballot or in the courts – the goal is we need to have a workable regulatory structure to allow us to produce the housing we need. This thing wasn’t going to do that.”

The possibility of a rent control revival has had real estate groups and Beacon Hill leaders bristling for years.

Legislators waved away a handful of proposals over several sessions from municipalities asking for local rent control at varying levels of strictness. A pitch from Boston Mayor Michelle Wu asked for rents to be capped at the rate of inflation plus 6 percent, or a max of 10 percent, whichever is lower. Somerville pushed for a much leaner framework of inflation plus 2 percent, maxing out at 5 percent, whichever is lower.

Lawmakers allowed the requests from individual communities to die at the committee level. The House also shot down an amendment to an economic bill in 2020 that would have allowed willing cities and towns to embrace limits on rent increases.

A spokesperson for House Speaker Ron Mariano said Tuesday that the Quincy Democrat “has long argued that rent control, and specifically the proposal that was slated to go before voters in the fall, will stifle housing production, exacerbating the main challenge at the root of the affordability crisis here in Massachusetts.”

Homes For All, the advocacy group leading the current ballot measure charge, did not support an effort last ballot cycle proposed by Cambridge Rep. Mike Connolly to allow cities and towns to regulate rents and evictions and implement tenant protections. That effort ultimately floundered without making it to the ballot.

Two years later, rent control backers took a big swing with their own measure that went further than simply repealing the existing ban on rent control. The pitch was so aggressive that it made even rent control enthusiasts nervous and initially irritated some supportive officials like Wu, who would rather have a more flexible local option. Wu later backed the proposal, describing the measure as rent control’s best current chance, and has since been more vocally in favor of a more lenient compromise.

With this SJC ruling, Massachusetts will no longer surpass the record for the most statewide ballot questions in a single cycle. Nine measures remain in the mix, equaling the largest total last set in 1994.