FOR THE TIME BEING, the COVID-19 epidemic in Massachusetts has begun to wind down. However, even if we keep the virus under control, it has already has set in motion many drastic and longer lasting changes in our housing markets. One of the outcomes could well be a significant decline in real estate values, an increase in foreclosures and speculative purchases, and the displacement of thousands of residents from their homes.
That is why we are working with state Rep. Dan Cullinane and state Sen. Brendan Crighton to enact the Tenant Opportunity to Purchase Act (TOPA) so we can provide a way for tenants and non-profits to purchase their apartments, preserve long-term affordability, and prevent massive displacement.
The COVID epidemic will roil the housing markets in Massachusetts. Tens of thousands of college students may not be returning to campus in the fall. Thousands of apartments in buildings owned by investors that were previously rented out to students or on Airbnb are now vacant. More than a million residents of the Commonwealth have filed for unemployment. Some of the businesses they worked for will not open back up once the economy reopens. Thousands of tenants may be driven out of their homes once the eviction and foreclosure moratorium ends.
Real estate speculators, institutional investors, and flippers will descend on the housing market, purchase troubled buildings and likely hold units off the market waiting for an anticipated upswing. Heroic efforts have been made by the Commonwealth and municipal governments to deal with the effects of the epidemic. However, no program has been proposed so far to deal with the longer-term crisis that will hit the housing market. The TOPA legislation can help address this coming crisis.
TOPA will allow tenants of small, medium, and large multifamily properties to match a bona fide offer to purchase the property where they live and provide the tenants with a reasonable period of time to secure the financing to acquire the property, taking it out of the real estate speculation system.
TOPA will support tenants of all income levels who need and want the security of a decent affordable home and are committed to the neighborhood where they live. TOPA, combined with available public funding from local and state government, can preserve existing rental housing and make it more affordable.
The TOPA bills are enabling legislation. That means that cities and towns could pass an ordinance putting the tenant right to purchase into effect without having to petition the Legislature for permission to implement TOPA. They are revenue neutral and will not require any new taxes. Cities and towns that do not want to enact TOPA in their community won’t do so.
TOPA imposes no hardships on landlords seeking to sell their property. TOPA is a market-driven strategy for preserving affordable rental housing. TOPA has timeframes for performance by tenants and their partners/assignees that are typical of a normal real estate market in which properties are purchased with a combination of cash equity and debt. Indeed, we already have similar laws on the books for subsidized housing and for manufactured housing communities, and those laws have worked well for years. Washington, DC, has also had a version of TOPA on the books for decades and used it to successfully preserve at least 1,400 homes between 2003 and 2013.
We appreciate that the Commonwealth has enacted a strong moratorium on evictions and foreclosures in order to keep people in their homes during the COVID quarantine. But what actions can we take now to address the long-term housing crisis?
We need to emerge from the pandemic with an approach to housing that prioritizes human needs over speculative profit. We know that the housing market in the Commonwealth was not working before the pandemic. Now the pandemic has further exposed what is wrong with the current system. We cannot return to business as usual. Now is the time to exercise the political will to seek longer-term solutions and expand strategies that we know work, like the Tenant Opportunity to Purchase legislation.
Lydia Edwards is a Boston city councilor. Joseph Kriesberg is president and CEO of the Massachusetts Association of Community Development Corporations. Richard Giordano is director of policy and community planning at Fenway Community Development Corporation. John Lloyd is executive director of the Dudley Street Neighborhood Initiative.