The Decontrol Blues

“In our building we are like family now. We all work to support our families. All of us had to take a step forward and say enough is enough,” says Gabriel Mondon about his building at 59 Norfolk Street in Cambridge, Massachusetts. During 1998, the mostly Haitian and Latino tenants formed an association to demand repairs and fight huge rent increases. They tracked their landlord’s repeated attempts to flip ownership of the building in order to avoid legal and financial responsibility for years of poor maintenance; at one point they even picketed and infiltrated a building auction.

Finally, after a very intense public campaign, the landlord sold the building to the city, which made repairs and renovations through a nonprofit community development corporation, keeping rents affordable. This success was dramatic and worth celebrating; but it only involved eight units, a drop in the bucket compared to the losses that have followed the end of rent control in Cambridge.

Rise and Fall of Rent Control
In the 1960s and ’70s, Cambridge, a city of approximately 100,000 people, was moving from an industrial to a high-tech economy. Like similar urban housing markets where large universities dominate, demand for housing far exceeded supply. Harvard and MIT housed less than 50 percent of their graduate students on campus. In 1971, after a period of sharp rises in rents, deteriorating housing conditions and intense tenant organizing, Cambridge adopted rent control.

Unlike other Massachusetts cities with rent control, Cambridge’s rent control ordinance had no vacancy decontrol. Over time the city also added protections against condominium conversions and penalties for vacant units. Owner-occupied one-, two- and three-unit buildings and new construction were exempt, so only 50 percent of the rental stock and 34 percent of the residential units were covered. Rent increases were granted annually across the board for increased maintenance costs and individually for major capital improvement. Although some landlords chose not to take advantage of the latter, those that did averaged a 5 to 6 percent annual profit. New residential construction and renovation of the housing stock was generally strong, and rose and fell with the overall economy of the city and the region. It was clear that rent control did not adversely affect the real estate market. It did, however, protect tens of thousands of working-class residents who were renters in Cambridge.

However, in 1994 a state ballot campaign to ban rent control, financed by national, state and local real estate interests, won with 51 percent of the vote even though residents of the three rent-controlled cities voted overwhelmingly to retain it. (See Shelterforce #80.)

Even with a transition period for income-eligible tenants, there was a mass exodus from Cambridge after controls were lifted in 1995. Their reasons for moving were varied – rent increases, condo conversion – but the vast majority of tenants who sought relief from the city’s Housing Assistance Office and local tenant organizations had had no previous plans to move. A January 1998 Atlantic Marketing research study commissioned by the city showed that rents increased by 54 percent in formerly rent-controlled apartments and the rate of condo conversions soared to mid-1980s levels. Reports prepared for the Community Development and Human Service Departments of Cambridge show that advertised rents doubled for all size apartments, eviction cases increased, waiting lists for public and Section 8 housing assistance mushroomed and condo conversions rose dramatically. (See also A New Paradigm for Housing in Greater Boston at www.curp.neu.edu.) Attempts to quantify the massive loss of tenants were pitiful and most evictions were silent. The news media largely ignored the exodus.

As a result, single professionals began to replace families with children, which forced at least one school to close. Cambridge neighborhoods lost long-term residents: leaders, coordinators and centers of community networks. In one case, the long-time coordinator of a thriving community garden was priced out of her apartment and had to move out of the city, leaving twenty gardeners frantically trying to reorganize.

The City Response
Clearly Cambridge was going to have to address the issue of affordable housing. In many ways, the city was already a trendsetter in housing policy. It was one of only a few cities that had established its own Affordable Housing Trust Fund with linkage money from commercial development. It had a program that supported limited equity co-ops and condos and a public housing authority that was in the forefront of its peers. It also had three large community development corporations with proven track records of building and managing affordable housing.

After the loss of rent control, the city added the City Home Program, which channeled $2 million each year for ten years into the Affordable Housing Trust Fund. After the first year, tenant activism forced the city to increase this amount to $4.5 million annually.

Just Not Enough
But extra funding for affordable housing construction, even at these generous levels, was still inadequate to repair the affordable housing crisis caused by the loss of rent control. Even though the subsidized affordable housing inventory has increased by about 100 units per year, the bulk of the affordable units in 1995 resided in the 14,000 privately owned rent-controlled units, all of which were lost.

The situation has spiraled. Without rent control, the Section 8 program was no longer attractive to landlords because they could get more rent from a market rate tenant without the bureaucracy of government oversight. Nonprofit CDCs had trouble purchasing properties as real estate values were no longer moderated by rent control. Attempts to institute a steady, targeted revenue stream for the Affordable Housing Trust Fund (through a transfer tax, etc.) were blocked at the state level by real estate interests, and state and federal dollars have been lacking.

In March 1999, five years after rent control was voted out, Cambridge housing prices were skyrocketing, rent gouging was the norm, tenants were reeling from rent increases and out-of-town developers were swarming through most neighborhoods. Even low-income neighborhoods in Boston, previously untouched by gentrification, were affected. The news media started to pick up on the “new” housing crisis. Mass Inc. and Citizens Housing and Planning Association, two respected sources, reported that housing costs were diminishing the area’s competitiveness for attracting skilled labor and business expansion. Even the Greater Boston Real Estate Board acknowledged the existence of a crisis they had denied would ever happen. Only the property owners association from Cambridge, which had initiated the anti-rent control campaign, denied reality.

Tenant Organizing Responds
One Cambridge organization, the Cambridge Eviction Free Zone (EFZ), was instrumental in organizing tenants after the end of rent control. EFZ worked on three fronts: survival for existing tenants, increasing the stock of socially owned housing and working to pass new legislation that would both support tenants and increase affordable housing.

The first front – grassroots organizing of tenants building by building – revitalized the tenant movement. Week after week, month after month, the EFZ worked with tenants who were facing eviction and massive rent increases; the group launched the Housing Justice Campaign to focus on organizing tenant associations.

A Shelterforce ad seeking donations from readers. On the left there's a photo of a person wearing a red shirt that reads "Because the Rent Can't Wait."

EFZ’s legislative demands included funding increases and new regulations: a real estate transfer tax, inclusionary zoning, a local condominium conversion ordinance, money for legal services and a greatly expanded city budget for preserving affordable housing through purchase, rehab and nonprofit ownership and management. EFZ campaigned for a 1995 $10 Million Affordable Housing Plan to increase Cambridge’s annual affordable housing budget to $10 million. It also launched the Campaign to Save 2000 Homes, which demanded that large landlords sell some units to the city at affordable prices and that the city limit rent increases to no more than 5 percent for low-income tenants and 10 percent for moderate-income tenants.

Fighting for this legislation required long hours and dramatic steps. EFZ was forced to bring tenants affected by the lack of rent control before the city council numerous times. Approval to go to the state legislature for a real estate transfer tax was achieved only after a very dramatic takeover of the city hall lawn by dozens of tenants. Candlelight vigils on Harvard University’s campus resulted in the sale of 100 apartments of that institution’s formerly rent-controlled housing stock to the city.

EFZ’s most important role was ensuring that the vast majority of Trust Fund money was directed at efforts to remove formerly rent-controlled buildings from the for-profit market before the market prices got too high. This effort to increase the volume of socially owned housing became part of every campaign launched by the EFZ in the post–rent control period, and often won out over landlord efforts to direct funds towards rent subsidies.

But even with these victories, housing in Cambridge is still in a state of crisis. It’s clear that even if the EFZ had been successful in achieving $10 million in annual city expenditures for affordable housing and a reliable, designated revenue stream through a real estate transfer fee, it would take decades to establish the amount of affordable housing that is needed. In the meantime, Cambridge’s low- and moderate-income populations are leaving. The problem is too massive to address without regulation. At a minimum, increased eviction protection and modified rent control with vacancy decontrol provisions (both politically easier to accomplish than full-fledged rent control) need to be put in place soon.

Forward on Many Fronts
Tenant groups feel that while the housing situation is bleak, the future holds brighter prospects. The Mass Alliance of HUD Tenants has been organizing in expiring-use buildings for several years and has twice come close to passing state legislation to prevent owners from pre-paying their mortgages without making provisions for low- and moderate-income tenants. EFZ is also building relationships with other groups including expiring-use tenants and homeless activists, and has worked to establish a living wage ordinance.

New organizations like the Greater Boston Interfaith Organization (GBIO) and the Boston Tenant Coalition (BTC) are currently focusing attention on the need for just-cause eviction protections and new rent regulations. A massive signature drive by GBIO forced greater state expenditures for housing. (See Shelterforce #115.) A recent BTC march and rally for the restoration of rent control attracted hundreds of demonstrators. Although they have not yet been successful, EFZ and other tenant groups will continue to make the case that city infusions of money will never be enough to solve the housing crisis in Cambridge.

 

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