In the 1990s, the northern portion of Dorchester, from Upham’s Corner to Savin Hill and Columbia Point, was home to some of the lowest-priced homes in Greater Boston. Today, the median home price — over a half-million dollars — ranks the area in the top half of the region. Once home to many low-income residents, this part of Dorchester is now seeing steady gains in income. As newcomers grow richer, it becomes more difficult to find any housing affordable to families on tighter budgets. In a city where the opening of a few dozen subsidized apartments can induce thousands of applications, too few options are available to those hoping to stay.
To fight back, cities and states around the country are reconsidering rent control. At the center of these arguments is the belief that households should be protected against prohibitive and unfair rent increases. These arguments are both just and correct.
Rent control helps stave off displacement for individual households. The collection of more-stable households means that the community itself is stabilized by rent control. As gentrification extends into ever more communities, rent control offers Boston the clearest means available for protecting the tenants and communities at risk. Massachusetts should pass a bill introduced by Representatives Nika C. Elugardo and Mike Connolly that re-legalizes rent control.
The argument that rent control will halt construction and leave renters worse off is stronger in theory than in practice. The basic view is that lower rents will cause landlords to earn a lower profit, and developers will no longer find it worthwhile to build new housing. In the end, such reasoning goes, we will have fewer (if cheaper) apartments. In many ways, the logic mirrors how economists frame minimum-wage laws: As wages rise, firms will find it less worthwhile to employ workers, leading to fewer (if better-paid) jobs. Recent empirical work has overturned this simple view of the minimum wage. Better-paid workers means a thriving local economy able to support a wider range of employment opportunities.
We may bear witness to a similar revolution as new rent controls produce new opportunities for researchers. Indeed, the first shots have already been fired, although they come from an unlikely source: Stanford University economists. In the 1990s, rent control in San Francisco was expanded to some residents of smaller buildings but not others (depending on the year the building was constructed). This created a natural experiment: How would newly protected renters behave differently relative to still-unprotected renters as they all coped with a changing city? As you’d think, protected renters were 20 percent more likely to stay in their homes, weathering gentrification.
The stabilization of renters extends beyond their apartments, benefiting their communities as a whole. Indeed, rent control may stave off gentrification entirely, according to MIT economists studying the elimination of rent control in Boston. The result, of course, was fast-rising prices. More surprisingly, the price gains were concentrated not in deregulated apartments, but in never-controlled units nearby. This finding suggests that rent control stabilizes not just households, but also the enmeshed communities they belong to. Once rent control was gone, both new renters and landlords capitalized on the displacement of the original community, building a new one in its place.
Opponents will argue that rent control may mean less housing construction, on the theory that developers will find new projects less profitable. The new wave of research has not actually looked for evidence that rent control slows construction — although it does suggest some rent-controlled apartments have been converted to owner-occupancy. And while it’s true that San Francisco and Boston have housing shortages, the evidence suggests that restrictive zoning, not rent control, is at the root.
Nevertheless, the Stanford researchers may be right. If rent control is expanded, slowing construction is one future possibility. What is a certainty today is that zoning makes apartment construction illegal throughout vast swathes of the region. In addition, rents are high enough that developers would love to build (and landlords would love to rent) new apartments in more places, were it allowed. Boston’s current approach — limited new housing options and limited rent control — has meant the displacement of whole communities. The city needs new housing, and it needs affordable housing — one doesn’t stand in the way of the other.
As it stands, Boston is about to be left with the worst of both worlds: no rent control to protect renters and zoning policies that prevent new construction of more housing. Instituting rent control in Boston won’t solve all of our housing problems, and it certainly won’t end the housing shortage. But that cannot be our only goal. Stabilizing the marginalized communities of Massachusetts, no strangers to displacement, is a worthy pursuit on its own. Extending rent control is the first, best hope for securing Boston’s future.
Devin Michelle Bunten is an assistant professor of urban economics and housing in the Dept. of Urban Studies and Planning at MIT.