Wu Lays Out Plan to Slow Rent Hikes in Boston

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% 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.

Wu said in a letter to councilors that 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," Wu 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."

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.

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," Wu 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.

Wu said she modeled her proposal to revive rent control within city limits on "successful policies" in place in California and Oregon. Several other major American cities have some form of rent control on the books.

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.

"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 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.

Another point of contention is where the benefits would flow. According to Contrarian Boston, Wu's rent control proposal would apply to a greater share of units in wealthier neighborhoods such as Beacon Hill and Back Bay than in neighborhoods such as Roxbury, Chinatown and Mattapan.

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.

Before it could take effect, Wu'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.