Menino's 'rent-stabilization' plan to lower housing costs

Forced to deal with the third-highest housing costs in the nation and a 200 percent increase in homelessness over the past decade, Boston Mayor Thomas Menino proposed a controversial "rent-stabilization" plan last week which will attempt to provide more affordable housing in the Boston area.

Eight years after rent controls in Massachusetts were voted out in a state-wide referendum, Menino's plan would force landlords to justify rent hikes and would limit rent increases to a maximum of ten percent annually for middle-income households, and five percent for low-income households. (Low income houses are defined as those earning 80 percent or less of the median income, approximately $60,000 for a family of four.)

Landlords would also be prohibited from raising rent more than once a year and over 15 percent during vacancy periods.

Although according to the mayor's office the proposed legislation does not directly affect the Somerville/Medford community.

Tufts professors feel, however, that the legislation my in fact affect the local community. "There is a possibility that any downward pressure on rents in Boston could spill over to Medford and Somerville," Urban and Environmental Policy and Planning Professor Rachel Bratt said.

Many rising juniors who are unable to get on-campus housing are forced to consider going abroad instead of taking off-campus housing. "I think any college student in the market for housing would agree that rent control is a good thing, because it will save us money," sophomore Adam Drobnis said.

Many feel that something needs to be done, since between 1995 and 2000 the median rent in greater Boston climbed to $1,035 from $744 according to The Boston Globe. Today, the cost of off-campus living hovers at around $1,700 for a two-bedroom apartment in Boston and around $1,200 in Medford and Somerville.

But Medford Housing Authority Executive Director John Greco said that rent controls would be "minimally effective and have devastating long-term consequences." Rent controls are a short-term, band-aid solution to the complex issue of housing shortages, Greco said. Rent controls are often cited as a cause of housing shortages.

Opponents of Menino's plan also argue that it unfairly places the burden of low-income housing on the shoulders of landlords. Greco said a possible solution in Medford and Somerville would be for universities to build apartment-style housing for students who seek the atmosphere of off-campus housing.

This suggestion will not materialize anytime soon, as the Dean of Students Office has already stated this year that there is neither the funding nor the space for any new housing projects in the short term. The new dorm which is planned to be built beside the Women's Center will not be apartment style.

Critics say that forcing a limit on rent hikes and profits creates major disincentives for developers and landlords. A Cambridge housing study showed that when rent controls ended in 1994, investment in housing and repairs increased substantially.

Edward Shanahan, CEO of the Greater Boston Real Estate Board, told TheBostonGlobe that "during the past 25 years of rent control we could not get anything built. Regulation does nothing but stifle the supply."

Nonetheless, escalating demand and development has left little room for more affordable housing to be built in a city that has been termed "land poor."

Greco points to the gentrification of Medford/Somerville as a result of the out-migration of poorer households in the past few decades. Ten years ago, Somerville was considered a poor neighborhood. Now it is a very trendy and popular place to be, Greco said.

As Menino's staff points out, "even cheap parts of the city aren't cheap anymore." Though, there is no simple solution to the housing problem. Due to the many barriers in entering the housing market _ including zoning laws, environmental regulations, and escalating construction costs _ rents are climbing.

Tufts professors agree. "Rent controls alone would not bring down the cost of most rental units to affordable levels for very low income people," Bratt said. "Affordable housing approaches need to include deep subsidies from the federal or state government."

Many solutions like this have been proposed by Massachusetts gubernatorial candidates. Republican Mitt Romney proposed simplifying the permitting process for housing while Democrat Shannon O'Brien proposed an increase in capital spending for affordable housing.

Although recently rents have leveled off, "any softening in the rent market hasn't helped people who need it," Kathy Brown of Boston Tenants Coalition told the Globe. According to the Globe, Since the 1970s, the housing budget has tailed off and stands at only $120 million today as compared to $200 million a decade ago. As Menino states, "It's gone out of control in this city. Something has to happen." But many are questioning at whose expense.