A proposed Massachusetts rent control measure would block yearly rent increases greater than 5% or the annual increase in the Consumer Price Index, but some opponents worry about the cap’s impact on property values across the Commonwealth.
The ballot question would eliminate $300 billion in Massachusetts property values, according to a new study from The Tufts Center for State Analysis commissioned by the Greater Boston Real Estate Board. This revenue loss for municipal budgets could lead to cutbacks on public services or local tax rate hikes, say some in the real estate industry.
“Rent control will hit the pockets of every person who calls Massachusetts home, and this shows the very real untold threat facing every single one of our 351 cities and towns,” said Greg Vasil, CEO of GREB. “This study shows us that mayors, city councils and local leaders will be facing a flood of red ink in their budgets if this rent control proposal becomes law, either cutting police, fire, schools or roadwork or forcing local taxpayers to pay a much higher rate to make up the difference.”
Boston property owners could expect a reduction in property value of around 9% within three years, the study found. This would result in a shortfall of $160 million for the city by 2029.
Smaller towns and cities like Chelsea, Everett and Revere would also face property value decreases between 15% and 27% over 10 years, according to the study.
“Bringing back failed policies like rent control will have a devastating impact on our city, and this eye-opening report shows just how devastating it will be,” said Revere Mayor Patrick M. Keefe Jr. “A 10% to 15% cut to our tax base would force higher tax rates to those who can least afford it or deep cuts to core city services — unacceptable options for me and the people of Revere.”
Proponents of the measure cite soaring housing costs in the state, which are among the highest in the country.
The state legislature has until May 5 to review the proposal, after which they will decide whether to pass a law based on the measure’s content. If they don’t, over 12,000 additional signatures would be needed for the question to appear on ballots in November. Several landlords have filed a lawsuit against the measure with the Commonwealth Supreme Judicial Court, the results of which could impact the measure’s future.