NO, THE SKY is not falling.
That was the message on Wednesday from Wu administration officials who sought to counter the alarms being sounded by Boston’s real estate industry, which has launched a pricey ad campaign opposing Mayor Michelle Wu’s rent control proposal.
“People who are suggesting that growth will stop are misleading,” city housing chief Sheila Dillon said, defending the plan at a City Council hearing. “What the home rule does stop, however, is misbehavior that harms our residents.”
Wu’s proposal would limit annual rent increases to the Consumer Price Index for the Boston metropolitan area plus 6 percentage points, or 10 percent, whichever is lower. It would exempt owner-occupied dwellings of six units or less as well as all new construction for 15 years before and after the date of the legislation. The plan also doesn’t limit increases when apartments change hands, which tenant advocates worry would create an incentive to pressure renters out of units where rents are out of step with market rates.
Dillon’s testimony seemed aimed squarely at an announcement Tuesday by the Greater Boston Real Estate Board that it plans to spend at least $400,000 on a “Rent Control Hurts Housing” campaign to defeat the measure.
Board CEO Greg Vasil appeared at Wednesday’s hearing and warned that the effort to regulate rents would stifle housing production.
“Our biggest concern with this particular proposal is the impact it could have on production, because we believe that production will be our way out of this,” Vasil said of the regional shortage of housing.
To take effect, the proposal must be signed off on by the City Council and then win approval of the Legislature and the governor, a tall order given the reluctance of state leaders to embrace rent control following a 1994 statewide ballot question that outlawed the policy.
Later on Wednesday, the real estate board was joined by the conservative Massachusetts Fiscal Alliance in loudly opposing the plan. “Beacon Hill would be foolish to even consider it,” said spokesperson Paul Craney.
Wu’s team pushed back during the six-hour hearing on characterizations that the measure would put Boston out of step with its peer cities.
“We’ve certainly looked at states and cities that are doing quite well, though some of them have high housing costs, that do have some form of rent stabilization,” Dillon said. “It’s unique that a major city does not.” Though the city is constrained in its housing supply, she said, “we’ve crafted this so we would continue to see development happen in every neighborhood.”
Housing advocates and the progressive wing of the council argue that Wu’s plan doesn’t go far enough. But even the mayor’s more middle-of-the-road stabilization plan would face an uncertain future at the State House.
City Councilor Michael Flaherty, usually aligned with the council’s more moderate bloc, questioned whether it’s even worth the battle – and potential for bad blood – to hash out an agreement on a plan in the council if it’s facing a dead-end on Beacon Hill.
“With housing initiatives, the council gets them through, the mayor signs off and then they hit a brick wall heading up the hill,” Flaherty said in the hearing. “I don’t want to see us get all, you know, in a tizzy and divided and have a big free-for-all when, you know, if there’s not a likelihood of success.”
