Massachusetts voters repealed rent control. The mayor of Boston wants him back.

The history of the adoption and then repeal of rent control in the Boston area has produced a wealth of research on its real-world effects.

Mayor Michelle Wu’s new proposal to re-regulate rents could create the perfect test of whether modern “rent control 2.0” policies avoid the unintended consequences of their 20th-century predecessors.

“Boston tenants are often victims of sudden rent increases, making it impossible for them to stay in their homes,” Wu wrote in a petition to the city council on Monday, citing the city’s advertised rent increases of 14 percent or more.

The mayor is calling on the council to pass an ordinance that would limit rent increases to 10 percent or local inflation plus six percent, whichever is less.

Her policy is based on recent “anti-rent hike” laws in Oregon and California, which limit rent increases to seven and five percent, respectively, plus inflation. (California also creates a 10 percent rent cap.) Like those two states, Wu proposes allowing landlords to raise rents as much as they want for vacant units and buildings less than 15 years old.

Adopting those same exemptions and allowances for vacancy, recent construction and inflation will allow Boston “to maintain a strong development market” while still providing tenants with stability, Wu argued.

Greg Vasil, executive director of the Greater Boston Board of Realtors, isn’t convinced. Rent control “increases the cost of housing, discourages maintenance and discourages construction,” he told Boston’s CBS affiliate.

In 1969, the Boston City Council passed an ordinance giving tenants the ability to appeal rent increases to the city’s Board of Rent Appeals. A few years later, another law reversed this arrangement: All rent increases were supposedly prohibited, and landlords had to ask the appeals board for an exception.

In 1976, the city loosened rent control slightly by adopting vacancy decontrol, which allowed landlords to remove apartments from rent control if a tenant moved out. The number of rent-controlled units fell from 100,000 to 25,000 in just six years.

In 1994, a state ballot initiative overturned the city’s rent control policy.

Researchers have used the imposition and removal of rent controls to explore the effects of the policy in Boston and surrounding communities.

A 2007 paper by economist David Sims found that rent control significantly reduced the prices of controlled units. But the policy also encouraged many building owners to convert rental units into residential properties. The quality of rent-controlled housing has deteriorated.

Rent control policies in Boston and Cambridge, Massachusetts, also only covered housing units that existed when the policies were enacted. Owners of newer units were exempt from the city’s rent restrictions. This plausibly explains why Sims’ work found that rent control did not reduce new construction activity.

A 2012 NBER working paper found that the repeal of rent control in 1994 led to increases in property values ​​for both non-controlled and never-controlled properties, and that increases in property values ​​were greatest in never-controlled properties.

This implies that “the efficiency costs of Cambridge’s rent control policy were large relative to the size of the transfers made to residents of the controlled units,” the researchers wrote.

In one sense, Wu’s proposal is less restrictive than Boston’s previous rent control scheme. In other ways it is actually more restrictive.

The real increase of 6 percent plus inflation is well above the city’s old assumed ban on rent increases. It’s also higher than other old rent control rules still in place in places like New York and San Francisco, which typically limit rent increases to the low single digits and well below inflation.

Wu’s plan gives landlords a little more flexibility to raise prices in response to rising costs or to cover maintenance costs. The demotivation of landlords to maintain their property is reduced.

On the other hand, the current 15-year rental cap exemption for new construction is more restrictive than Boston’s old policy, which did not apply to new construction at all. If Wu’s proposal passes, all eligible apartment buildings will eventually fall under rent control.

Economists have warned that similar ongoing exemptions in Oregon and California will reduce the value of new units and reduce developers’ willingness to build them. The supposedly smarter design of Rent Control 2.0 may actually be more damaging to the new offering than previous policies.

This would exacerbate Boston’s underproduction of housing units, worsening overall affordability in the city.

That’s a theory anyway. Wu’s proposal must be passed by the city council and then approved by the state legislature before it can take effect. If that happens, we will have the perfect test case of whether a carefully designed rent control policy can actually reverse the law of supply and demand.

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