The Massachusetts housing market faces a turning point. Between persistently high inflation and interest rates, it has become more expensive to not only buy homes in Massachusetts but to build them too. As a result, policy makers must take bold steps to ease the state’s housing crisis, focusing on minimizing red tape and promoting production at all income levels. This is why we launched the Rent Control Hurts Housing campaign, a six-figure effort utilizing print, digital, and grass-roots tools aimed at educating Boston voters on the harms of outdated policies like rent control.
Unfortunately, Boston Mayor Michelle Wu’s plan to return governmental price controls to housing, known as rent control or rent stabilization, would take the opposite approach, increasing bureaucratic barriers, discouraging investment, and ultimately worsening the region’s housing crisis by reducing production.
We at the Greater Boston Real Estate Board agree with the mayor that housing costs are unacceptably high, but rent control is not the way forward. While the policy may provide relief to those lucky enough to land a rent-controlled apartment, it does nothing to build the housing stock the area so desperately needs. In fact, the proposal and the income limits it sets will probably stop development in its tracks. Rent control is a barrier to housing production.
Due to the income limits of rent control, prospective housing producers will be discouraged from building in the community. It doesn’t matter if rent control exempts newly constructed projects for a limited period of time: The fact that rent control will, eventually and inevitably, restrict the capacity of property owners deters future investment.
Decreased investment and, ultimately, decreased housing production are perhaps the greatest harms of rent control. By discouraging housing production, rent control makes existing properties not covered by price controls even more expensive. Many renters are more likely to be priced out of their community, further fueling the forces of gentrification in the neighborhoods rent control aims to protect.
Rent stabilization also makes it cost prohibitive for property owners to remain on top of apartment upkeep and maintenance. So, even if renters enjoy living in a more affordable apartment, it may become far more difficult for property owners to adequately address their leaky faucet or broken dryer in a timely manner.
Passing rent control, and thereby restricting housing production, would make the region’s housing crisis even worse. Research released in 2022 noted that Massachusetts ranks 11th nationally in housing underproduction, as it has fallen 108,000 homes short of meeting demand. The Commonwealth is dramatically underperforming. The shortage, which doubled between 2012 and 2019, emphasizes how rapidly and seriously Massachusetts has plummeted on housing production goals.
Fortunately, Governor Maura Healey understands how Massachusetts must confront and overcome the housing crisis. In her inaugural address, Healey rightly stressed that high housing costs are due to serious underproduction. The governor also outlined a number of thoughtful policies to address the crisis, including creating a secretary of housing position, developing housing on unused state-owned land, and expanding housing development near transit hubs.
Healey’s address came just a few months after the state passed its economic development bill, which also prioritized housing production. The law invests $450 million in housing production and related services. For instance, the state set aside $100 million to produce below-market housing for first-time home buyers and socially disadvantaged individuals. The spending plan also included $100 million for workforce housing production, over $10 million for local housing initiatives, and $3.5 million for first-time home buyer assistance.
The state needs the vision and leadership of all three branches of government. The solutions that former governor Charlie Baker and the Legislature agreed to last year, as well as the ideas Healey has proposed, are the exact types of steps the state should take to overcome the housing crisis. Constructing a wide array of housing units across all price points, from starter homes for young families, to comfortable condominiums for retirees, to luxury apartments, will help the state meet demand and lower overall costs.
Housing production, not rent control, is the way forward for the region. The state must move on from failed policies, learning from its mistakes. Rent stabilization will only make housing challenges worse.
Read more in the series: The rental question
Lydia Edwards: How to repair and rebuild a cracked foundation for housing justice
Peter Dreier and Don Gillis: Mayor Wu’s rent control proposal is pro-business
Greg Vasil is the CEO of the Greater Boston Real Estate Board.