A History of Rent Control Policy in Massachusetts

While many may only remember the 1994 referendum and the laws that gave rise to it, rent control policies – and opposition to them – stretch back more than a century in Massachusetts. The laws themselves varied widely from era to era, but the reasons for them – housing shortages and a lack of affordability – have been consistent.

State and local lawmakers have each seen rent control as a way for the government to mandate affordability in the housing market. Yet, as tempting as price controls have been, every policy of its kind has eventually gone out of favor. Often the result of those policies’ negative externalities, like housing disrepair; reductions in supply; gentrification; and the misallocation of rental stock, as well as pushback from voters and landlords.

The history of rent control in Massachusetts can be broken into four distinct eras: housing shortages resulting from the first world war, WW2 and the Great Depression, local control and the ‘94 referendum, and the current debate around “rent stabilization.”

The Roaring 20’s

As urban industrialization swept the nation in the early 20th century and an acute housing shortage was brought on by World War I, many in Massachusetts felt something had to be done to make housing more affordable and available. As a result, in 1919 the General Court ordered a new commission to study the circumstances affecting changes in rent.

By 1920, a new law was enacted making “unjust and unreasonable rents” for dwelling purposes, excluding hotels, unenforceable. To define unjust and unreasonable rents, the statute capped year over year rent increases at 25 percent, except in cases where unusual repairs or alterations had been made.

The law was easily undermined by landlords, as it did not preclude them from evicting tenants who refused to pay rents, even if the rents were “unenforceable” according to state law.

The statute only lasted three short years before it was repealed.

The Emergency Price Control Act of 1942

Like the prior period, another world war brought unprecedented circumstances the state sought to address. But unlike the law implemented in 1920, the price controls of this period were initiated by the federal government.

In 1942, the 77th Congress passed the Emergency Price Control Act establishing an Office of Price Administration (OPA) which was empowered to designate an area as a “defense rental area” after consulting with state and local officials. In Massachusetts, all counties were eventually designated in this way.

If local officials did not object, the OPA was empowered to freeze rents in defense rental areas for all properties at their pre-war maximums. Each landlord was also required to register with a local OPA office, notify the office in the case of a change in tenants or eviction, and petition for any rent increases.

After the war ended, Congress extended price control provisions and established a new maximum rent cap every year until 1953, when it was allowed to expire.

The Massachusetts Legislature passed a law that year allowing localities to continue the rent control measures if they chose to do so. Most towns and cities opted in. The new law instituted fines for landlords who charged tenants more than the allowed maximum.

Yet, as with the original state law, this too expired after two-and-a-half years.

Local Control of the 1970’s-90’s

After considerable rent increases during the intervening period in major Massachusetts cities, concerns about housing affordability again grew and garnered the attention of state legislators. In 1970, the state legislature allowed cities with over 50,000 residents to decide whether to re-implement rent control.

Certain units, like owner-occupied dwellings, those in hotels, and new construction, were exempt from the new laws. Rents were generally set at the rental charge levied by the landlord six months before the municipality adopted rent control, and evictions and rental increases were only allowed with the express consent of newly established local rent control boards and administrators.

Rent control authorities were also empowered to increase or decrease rents on controlled units, while assuring landlords a “fair net operating income.” The authorities also strictly regulated property conversions after landlords began converting to condos to avoid price caps.

The new rent control laws were taken up by only a few major cities and towns: Boston, Cambridge, Somerville, Brookline, and Lynn. Although Lynn and Somerville abandoned the policies after just a few years.

Opposition found ever greater footing as time passed and scandals came to light, including city councilors and Harvard professors paying well below market rate in rent control apartments in Cambridge.

Ultimately in 1994, rent control went up for a statewide referendum. By a 51-49 margin, it was effectively banned across the entire state.

Today’s Rent Control Proposal

Today, the debate continues as many liberal figures throughout the country have taken up new calls to reimplement rent control as prices have soared since the pandemic. Michelle Wu and the Boston City Council have single handedly tried to bring rent control back from the dead.

A task force was established early in 2021 to study the issue, and Mayor Wu has since released a concrete plan that was approved by the City Council. The plan would cap year over year rent increases at 6 percent plus the consumer price index or 10 percent, whichever is lower. New construction less than 15 years old and owner-occupied dwellings with six or fewer units would be exempt, and landlords would be allowed to increase rent back to a market rate if a tenant moves out.

The new law would also provide additional protections for renters, allowing evictions only when a tenant has failed to pay rent or has substantially violated their lease. A rent board would be created to hear renter appeals.

The proposal must next gain state legislative approval. If approved the new law would likely cover as much as 56 percent of all rental units in Boston, or 185,000 dwellings.

Conclusion

While likely forgotten by most, Massachusetts has a long history of failed rent control policies. The first of which were created as a result of extreme circumstances surrounding the two world wars and the depravations of the Great Depression.

Yet current lawmakers still discuss the issue as if such plans are novel and untried. While not as strict as 1970s and ‘80s controls, nor as unenforceable as the law from the 1920’s, the new proposals would ultimately run into the same issues that these laws have encountered for nearly a century.

I think we can all agree that maybe it’s time to try something else.

 

Additional Sources to Explore

The Debate Over Rent Control Re-Emerges Amid Housing Crisis

Realizing Rent Control: Targeted Tenant Relief or Broad-Based Road to Ruin

Rent Control Re-Explored: What the Past Can Teach the Future

Rent Control Redux: Mayor’s Committee Likely to Provide Astroturf Over Expertise

The State of Zoning for Accessory Dwelling Units

Addressing Greater Boston’s Housing Crunch

 

About the Author

Aidan Enright is Pioneer’s economic research associate, responsible for analyzing data and developing reports on the state’s business climate and economic opportunity. Prior to working at Pioneer, he worked as a tutor and mentor in a Providence city school and was an intern for a U.S. Senator and the RI Department of Administration. Aidan earned a Bachelor of Arts in Political Science and Economics with a concentration in U.S. national politics from the College of Wooster.