^ asking for a reform that will immediately make the rental situation much worse
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Sometimes I wonder if politicians think about the positions they adopt before they adopt them. A case in point is the matter that goes by the name “just cause eviction.” It sounds great : a landlord cannot terminate a tenant’s tenancy without, well, a just cause. Unfortunately, the facts aren’t so simple.
A “just cause eviction” ordinance has been proposed for enactment by Boston’s City Council. A hearing has been held. Mayor Walsh is said to support the ordinance.
Before I explain why I strongly oppose this ordinance — and all that are like it — it would do well to read the actual language of said proposal : http://www.scribd.com/doc/291576795/Boston-Just-Cause-Ordinance-Draft-Sept-2015#scribd
As you can read, the ordinance, if approved by the legislature — which it won’t be –denies to an owner of rental property the most basic incidents of ownership. To begin with, rent increases become impossible, because the present method of establishing an increased is to send a tenant a 30o-day notice terminating he current tenancy7 along with an offer of a new tenancy, which the tenant is then free to accept or reject. If she rejects, she must move. Under the proposed ordinance, a landlord cannot do this.
The ordinance does exempt properties owner occupied with up to four units. That, of course, is vital politically. But it also exempts from the ordinance a major portion of the city’s rental units and throws the burden on the obvious target : major investor landlords.
We have been here before. In the 1970s Boston established rent control, complete with an entire rent control bureaucracy (staffed by patronage, of course). The result ? Those evil major landlords stopped investing money to improve their property; and property values went down, so no one built any new rental housing. As rents in the open market increased, tenants in controlled units started subleasing rooms in their units at ever increasing amounts, until in some cases they were making a profit.
It was in response to rent controlled apartments that real estate people invented the condominium, established by state law as chapter 183A. By the mid 1980s, whole blocks of formerly rented units had been converted to condominiums and sold off.
I see no reason why the exact same consequences will not befall Boston if the proposed eviction ordinance were to become law. Landlords are not stupid, nor do they give their money away. If this ordinance is adopted, no one with any brains will build any rental housing, and such rental housing as exists will quickly move toward condominium c0nvertsion, to be sold off.
By now we in the city should have learned that, in real estate, value cannot be rendered “just.” It can only be shifted from one party to another (by means that flirt with unconstitutionality as a taking of property without compensation), and such shift can never turn out well. Look : Boston needs a huge increase in affordable housing units. This we all agree upon. But the only way — yes, the ONLY way — to bring this result about, without actually making the situation worse, is to increase dramatically the supply of housing.
Unhappily, there are many neighborhoods of Boston whose activist residents oppose all such development; and the BRA’s “community review” process plays into these oppositionists’ hands by predicating approval of a project upon a favorable vote of “the community.” I see scant chance of Boston receiving Mayor Walsh’s proposed 53,000 units of “affordable” housing by the target year of 2030 unless the BRA’s approval process changes radically.
In any case, said 53,000 units will include no rentals if the “just cause eviction” ordinance were ever to be adopted. It will ALL be condominiums for sale — and “for sale” means the buyer has to have acceptable credit and a down payment. So much for providing housing for those without either.
This is what Boston is going to get if its public policy is decided by politicians who don’t know the first thing about markets, or don’t care whether they know or not.
—- Mike Freedberg / Here and Sphere