Boston Landlord Wants Market Rate? Not So Fast, Tenants Say

Facing the loss of 173 subsidized apartments — nearly 10 percent of the affordable housing in the Fenway neighborhood in Boston — tenants and the wider neighborhood are fighting back. This week tenants and their attorneys appeared in Boston Housing Court, to pursue a civil rights case against William and Robert Kargman of Cambridge and Brookline and two Kargman owned companies.

Burbank Apartments is a set of East Fenway buildings with 173 apartments which have long been affordable to low- and moderate-income people. The Kargmans took advantage of the availability of federal money and guarantees from HUD to fund the development at Burbank 40 years ago. Now the owners want to end a federal rental subsidy contract and convert Burbank Apartments to market rate as of April 1st.

The lawsuit alleges that the Kargmans seek to bring the affordable housing program at Burbank to an end despite the fact that doing so is likely to have a disparate impact upon low income residents, families with children, people of color, the elderly and disabled people. The complaint alleges that this conduct by the Kargmans constitutes unlawful discrimination.

In March of last year, tenants formed the Burbank Apartments Tenant Association (BATA) to save their homes. BATA has since mobilized widespread support from neighbors, organizations, and local, state, and federal officials. Before bringing the fair housing lawsuit, tenants had discussions with the owners, held lively protests at the Kargmans’ downtown offices (known as First Realty Management) and testified at a City Council hearing on March 14th.

At the hearing, city councilors and mayoral staff joined hundreds of Fenway community members in condemning the owners’ decision to convert the apartments to market rate. “The City of Boston and the Commonwealth have resources available to preserve owners’ profits while keeping these apartments within reach of renters,” said City Councilor Michael Ross, who as the Councilor for the Fenway (District 8) made the request for the hearing. “We’re disappointed that First Realty has not come to the table.”

Unfortunately, the Kargmans have made decisions with similar severe consequences in other neighborhoods. According to Mayor Menino’s Advisor on Housing, Sheila Dillon, in the last five years, out of a total of 908 affordable housing units lost in the city, 896 — or 98 percent — were in developments owned by the Kargmans.

During the March 14th hearing, University of Massachusetts Professor Michael Stone presented conclusions from research conducted by highly-respected independent researcher Tim Davis on the socio-economic impacts of the loss. Stone noted that loss of project-based Section 8 subsidies at Burbank Apartments will have a disparate impact on people of color, families, seniors, and people with disabilities.

For example, Stone said that after conversion to market rate, “less than one-fifth (19 percent) of households of color (with 2 to 4 persons) would be able to afford a two-bedroom unit at Burbank, compared with over half (52 percent) of white, non-Latino households.” Stone added, “If the rents charged at Burbank Apartments are permitted to be set by the speculative market. . . housing opportunities for low-income Boston residents. . . will be further reduced. And Boston will become even more segregated.”

Tenants and their supporters point out that the owners can maintain fair housing and affordability while getting full profits through the ‘Mark-Up-to-Market’ program offered by HUD. Tenant Ming Chang notes that “they can still make a lot of money while doing the right thing! We do not have an explanation from the Kargmans as to why they refuse. This is not acceptable in the Fenway, which is so proud of our racial and economic diversity.”

The Kargmans seek to justify their actions by pointing to an alternative rent voucher program designed to protect existing tenants when they cannot pay the market-rate increases. However, in the legal complaint, the tenants point out that this program does not ensure the continuation of affordable housing at Burbank. The complaint also alleges that the Kargmans are well-aware that terminating the subsidy program will end affordable housing at Burbank Apartments over time, as voucher holders move out, and are replaced by people who are able to afford the high market rents.

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