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Mayor Michelle Wu files rent control proposal with City Council, setting up debate

Mayor Michelle Wu formally filed her rent control proposal with the City Council Monday.Erin Clark/Globe Staff

Boston Mayor Michelle Wu on Monday formally filed her rent control proposal with the City Council, teeing up what’s likely to be a contentious debate at both the city and state level.

The policy, which Wu made a centerpiece of her mayoral campaign and has been floating for weeks, would tie allowable rent increases to the health of the economy, allowing annual rent increases of 6 percent plus inflation, with a cap of 10 percent in high inflation years. It would exempt from that cap new construction for the first 15 years it is open, as well as small owner-occupied properties such as three-deckers.

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“Tenants in Boston are often victim to steep rent increases, making it impossible for them to stay in their homes,” Wu wrote to the Council Monday. She said the measure would place “needed limits” on rapid increases, and urged councilors to pass the measure “expeditiously.”

Wu also emphasized that “this proposal seeks to maintain a robust development market,” a response to brewing criticism from the business world that capping allowable rent increases could depress housing production here.

Though Wu’s proposal is relatively modest compared to the policies in place in the nation’s other most expensive cities, it has already drawn pushback from multiple sides. Progressives, including several city councilors, call the measure insufficient, saying the 8 or 10 percent rent hikes allowed under her proposal would still devastate vulnerable tenants.

To Wu’s right, more centrist elected officials warn that the policy would worsen the city’s housing crisis by discouraging investment in Boston, pushing builders to look outside the capital city, or spurring landlords to convert rental units to for-sale condominiums.

Before it becomes law, the proposal requires approval from the council, as well as the state Legislature and governor. Those are likely to be tough political fights. Leaders at the State House have long expressed skepticism of any kind of rent control, which Massachusetts voters banned statewide in 1994. If the progressive-leaning City Council changes the measure to impose stricter caps before sending the legislation to Beacon Hill, it could face an even more difficult path.

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Wu heard plenty of disapproval before her proposal was formally submitted. Wu floated a draft proposal last month to an advisory committee, and the details emerged in the Globe a day later, giving critics ample opportunity to air their grievances before the measure was finalized.

But the mayor kept the proposal largely unchanged, despite that feedback. City officials identified just one small tweak to the draft proposal: broadening an exemption that would carve out about 1,300 more owner-occupied properties from the proposed rules. Under the previous version, small owner-occupied properties with three units or fewer would have been free from the rent limitations; under the latest version, slightly larger owner-occupied properties with six units or fewer would not be restricted.

Under the revised proposal, about 55 percent of the city’s roughly 313,000 rental units would be subject to the limits on rent increases, according to city data.

It’s hard to say exactly how many tenants would directly benefit from the caps. Last year, Wu pointed out in her Monday letter to the council, advertised rents surged 14 percent across Boston on average, and more than 20 percent in some neighborhoods, as the rental market rebounded from COVID-19.

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But from 2017 to 2021, that number did not climb more than 3 percent in a single year. That suggests the rent caps proposed by Wu would not have limited most rent hikes on most leases in more typical years. The policy also allows for “vacancy decontrol,” meaning landlords can raise rents as much as they want in between tenants.

Wu doesn’t expect rent control alone to solve the housing crisis — nor is it intended to. She has also allocated more than $200 million in federal COVID relief funds to develop affordable housing and assist first-time home buyers. And the rent control policy includes other tenant protections, such as a requirement that landlords show “just cause” for evictions.

Research shows rent control helps keep vulnerable tenants in their homes, preserving community and a working class in ever-more-expensive cities. But economists warn that in the long term, rent control can fuel gentrification by driving up rents in uncontrolled units or pushing landlords to convert apartments into condos. More affluent tenants may scoop up scarce rent-controlled units since there are no income requirements.

Wu argues her proposal strikes the right balance between protecting renters and encouraging continued housing production.

The proposal would allow the city to establish an administrator or board to govern local rent regulation. Landlords facing high maintenance costs or increased property taxes could also petition the city for permission to raise rents in excess of the cap.

Catherine Carlock of the Globe staff contributed to this report.

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Emma Platoff can be reached at emma.platoff@globe.com. Follow her @emmaplatoff.