Property Rights Alert: Rent Control through the Back Door

Small Property Owners Association, a key advocate for property rights and a vibrant rental housing market, is pushing back against back door rent control.  If you know any small landlords in Boston let them know about this latest government attempt to degrade property rights. Such measures are actively pushed, despite the statewide rejection of rent control,  by the legal services industrial complex. Bad ideas never die in Massachusetts, they re-emerge in different forms.

 From the SPOA.
A serious threat faces Boston landlords

A proposal is circulating at the Boston City Council to require a “just cause” for every eviction. This proposal means that every eviction must be reviewed by a pro-tenant city bureaucracy to make sure that it is for a “good reason,” also called “just-cause eviction.” Two problems are involved: (1) you must hand over to the city the decision about any and every eviction, and (2) problems will arise in just how the city bureaucracy will define a “just cause.”

A just cause might be “significant non-payment of rent” — but you could not evict for occasional or intermittent non-payment. A just cause might be “making too much noise that bothers neighboring tenants” — but you could not evict for occasional loud noise.

This proposal comes from tenant advocates who believe that no tenants should be evicted for any reason, not even nonpayment of rent. Yes, that’s true. In the past, they have called themselves “The Eviction Free Zone.” That tells it all. These advocates will fight tooth and nail against any eviction that you try to do, even for good reasons.

Consider how this proposal will take away your only control over tenants — eviction — and will encourage tenants to misbehave in many ways, since the bureaucracy will not evict them for whatever it considers “not serious.”

This proposal comes from tenant advocates deeply upset with families being driven out of certain neighborhoods when their properties are bought by more upscale owners who remodel the units and charge significantly higher rents. This is a normal process of renewal in a neighborhood that tenant advocates want to stop.

The following statements come from articles in the November issue of the Small Property Owners Association. They describe in detail what is wrong with just-cause eviction.

How just-cause eviction becomes rent control

The petition circulating among Boston City Councilors would require every eviction in the city to be reviewed by a government bureaucracy and to not allow any eviction to proceed if it does not have a “just cause.” The proposal also calls for mandatory mediation of every rent increase.

The proposal presents councilors with an odd situation. Tenant advocates desperately want rent control to come back, but they know it is not politically acceptable. It’s also illegal after SPOA’s successful 1994 campaign outlawing it in Massachusetts.

Their proposal is, therefore, not openly about rent control. But it controls rents in other ways. It makes the rent increase process so difficult, so hostile, so fraught with obstacles that many owners will not go for rent increases or will go only for the slimmest increases that won’t be opposed. Thus, we have no open rent control, but we have de facto rent control.

Hostile mandatory ‘mediation’ effectively controls rents

If the just-cause eviction petition were put into operation, owners would face huge bureaucratic obstacles to raising rents. It’s rent control by bureaucratic strangulation. Here’s how that happens.

ALL rent increases MUST go throughA a complicated and hostile mediation process supervised by a new rent board. The petition requires this board to give all tenant advocacy groups in Boston access to the records of every owner’s rent increase request.

Then these free lawyers and tenant advocacy groups can come to defend the tenant, who is always right, and attack the owner, who is always wrong – especially if the rent increase is a large one. Theoretically, landlords would be free to set the dollar amount of an increase, but would have to keep rent increases low enough – almost zero – to get this gang of angry activists off their backs. That’s rent control by intimidation, without ever mentioning rent control.

While tenants get free help in fighting their landlord, landlords would have to pay for a lawyer, from $250 an hour and up. That price tag will stop most landlords from hiring a lawyer, leaving them to fight tenant advocates alone or just not fight at all. It’s rent control by pricing owners out of getting increases.

A long waiting list for the mandatory mediation will arise. Every single rent increase would have to go through these procedures, so the workload of the new rent board would become gargantuan. It would block rent increases entirely for as long a period of time as the bureaucracy can do it. That’s rent control by bureaucratic delay.

Numerous requirements are imposed on the landlord seeking a rent increase. If a landlord fails to do any one of these actions, his or her rent increase request is dismissed. How long the landlord must wait to start a new request is not stated – it is likely to be a very long time. Another form of rent control – by delay.

In addition, there are penalties. If a tenant wins against the landlord and the landlord failed to get a mediation certificate, the tenant can collect not less than three months’ rent – plus attorney’s fees, which are always very expensive.

If an owner evicts a tenant in violation of these just-cause eviction requirements, the fine is not less than $1,000 paid to the city. No upper limit is stated. This fine is to be applied on top of all the penalties stated here. Even the city of Boston’s own lawyers can enforce any of the rules on behalf of any tenant – another source of free legal service to tip the balance against landlords.

Will owners take any risks to raise rents or evict a tenant with all these possible dismissals, fines, and penalties? No. Under these conditions, owners will often never seek a rent increase. So it’s a rent increase of zero. Officially, none of this is rent control. But it is rent control by all these bureaucratic obstacles. This backdoor form of rent control is worse than what was outlawed in 1994. At least back then, some rent increases were possible.

We have only talked about the rent control aspect of this petition. The eviction control aspect is a whole other bureaucratic process designed to limit evictions only to “just causes” very strictly defined. Non-payment of rent must be continuous and serious. Disturbing the quiet enjoyment of other tenants must be egregious. Property damage must be ongoing and significant. And so it goes for any behavior the owner wishes to stop. Under these conditions, tenants will feel free to do almost anything they want. The threat of eviction is the owner’s only way to control tenant behavior. Taking it away will cause a serious decline in the quality of life in rental properties.

Perhaps the worst part of this petition is the hostility it will generate between owners and their tenants. It amazes us how viciously the tenant advocates can treat landlords. After all, we are all humans just trying to live as best we can.

Just-cause eviction is rent control. It will be far worse than rental inspections. We must tell Boston City Councilors just how strongly we oppose it. See below the names and contact info for the Councilors. You should contact all four At-Large Councilors, your own District Councilor, and the Mayor. Contact both the outgoing two Councilors (labeled) as well as the newly elected ones. You can use the email address that goes to all the Councilors, but emailing each Councilor has a more powerful impact. Get fellow landlords to sign up for our free Action Alert emails by sending their email address to: spoa@spoa.com.

Speak your mind. Be polite, but say what you think about the proposed just-cause eviction. Use the ideas presented here, but put them in your own words. Show this newsletter to other landlords you know.

 

About Karl Marx

Left wing libertarian conservative.