Closing Loopholes or Blocking Growth?

Thirteen years after Cambridge implemented one of the toughest rent control policies in the state, tenants are dissatisfied. They say the regulations--which monitor the costs to both tenants and landlords in low- to moderate-income housing--have been subverted in two ways: landlords are getting around the restrictions by making unnecessary repairs and then demanding increases to cover them: and relatively affluent people are taking the controlled housing from the low-income tenants who need it more.

To register these complaints, the Cambridge Rent Control Coalition (CRCC) is pushing a non-binding, six-point referendum on Tuesday's ballot which would advocate an even more restrictive stance, including an increase in public and private funds for rehabilitation of low cost housing, stricter vacancy controls, capping rent increase and inclusionary zoning laws. The campaign has divided along the traditional conservative/liberal split. But both sides agree that, with 70 percent of the city considered tenants, the referendum will easily pass. Whether it will mean anything hangs on the city council elections on the same day. If the current even split between the conservative Independents and the progressive Cambridge Civic Association (CCA) continues, it will be tough to actually enact the provisions. The Cambridge City Council actually voted down the proposal in August, but CRCC organizers gathered enough signatures on their petition to insure inclusion of the measure on the ballot.

The program calls for:

*Increasing public funding of low-cost rehabilitation of affordable housing under rent control and stopping bank discrimination against rent-controlled properties.

Michael Turk, co-author of the referendum and leader of the Harvard Tenants Union, suggests that some of the city's resources should be shifted into a public loan fund for repair and maintenance of older buildings. "Money is being used to fix up housing for middle-to upper-level income people, and we just want to make sure we get our fair share," Turk says.

The referendum also proposes that the city strengthen the Community Reinvestment Act (CRA), a 1977 measure encouraging banks to put funds back into the community by financing loans, by boycotting banks that do not comply with CRA. "The CRA has had a positive effect by encouraging banks to reinvest," says Michael Rosenberg, housing director for the city's Community Development Department. But he explains that some buildings just do not meet bank criteria for loans. "The CRA doesn't change these criteria, and the city can't force the banks to do anything."

Douglas Thayer, the head of the South view Real Estate Management firm, is skeptical that this will have an effect. "Any time anyone mentions banks, the discussion centers on sanctions instead of incentives and I don't think sanctions encourage banks to do anything," he says South-view manages 104 rent-controlled units in the city.

Thayer suggests that tenants, banks and the city form a partnership to review petitions for funding from both tenants and landlords. Once an application had been discussed by all sides, it would be forwarded to the Rent Control Board for final action. He adds that the city is already developing such a program.

Turk, however, says that in preliminary meetings to discuss such a group, city officials ignored tenant concerns.

*Keeping housing in use by requesting a removal permit for refusal to rent units left vacant for more than 90 days.

"Vacant housing units are symptoms of serious problems: blight, impending demolition, illegal condo(minim) conversion, speculation...," says the explanatory sheet on the referendum prepared by the CRCC. To prevent this, the group wants to make it illegal to keep housing vacant for more than 90 days.

Currently, Cambridge has no clear-cut guidelines for dealing with vacant property. Rosenberg questions the enforceability of vacancy-control legislation, but Turk says a similar program recently initiated in Brookline has worked well.

*Strengthen rent controls by "capping" rent increases.

One of the CRCC's major complaints is that landlords are making expensive improvements in their buildings, and then claiming rent hikes to cover their expenditures--sometimes raising the rent beyond the reach of current tenants. Capping, the group says, would encourage landlords to be cost-conscious in making repairs.

Landlords, however, say that any measures preventing maintenance of their buildings are not feasible. "Sacrificing maintenance of housing stock for affordability is ignoring the long-term reality," Thayer says.

Charles Laverty, president of the management firm Laverty Associates, says that even the current city policy that requires rent board approval for any repairs or rent hikes is too restrictive. "The buildings are getting shabby because landlords can't afford to repair them," Laverty says.

Some city politicians also oppose rent capping "Tenants want the owners to take care of properties, but they're not getting enough rent as it is," says Councilor Walter J. Sullivan, a member of the conservative Independent bloc on the council.

Even CCA-endorsed Councilor David A Wylie is opposed. "I'm in favor of its general aims and objectives, but I think capping itself is illegal," Wylie says. He explains that the Cambridge Rent Control Enabling Act, the state law that in 1973 made rent control possible, requires that landlords give a fair return on their investments.

"If we didn't have rent increases, we would lose rent control altogether," Wylie adds. "I don't think it is wise to put things on the ballot that mislead people as to what can be done." Wylie was one of the councilors who voted down the referendum when it came before the city council in August.

Turk, however, maintains that the first referendum provision lowers the cost of funds for landlords, and that there should be enough room in the new guidelines to allow landlords to make reasonable repairs.

The last three points on the referendum address zoning problems.

*Requiring any new commercial and residential development to provide housing units for low-and moderate-income people:

*Rezoning vacant land to promote new housing, especially for families:

*Replacing, one-for-one, units housing low- to moderate-income people when such units are lost to commercial development or university expansion.

Such provisions outline an inclusionary zoning program similar to the one recently begun in Boston. Under Boston's "linkage" plan, commercial developers must build a certain amount of housing in the city--although not necessarily on the same site--whenever they put up a non-residential building.

Cambridge currently has no inclusionary zoning laws, and motions before the city council suggesting such laws have failed. However, the city has currently set up a group to study linkage in Boston, says Les Barber, project planner for the Community Development Office.

Turk cites Kendall Square as an example of the need in Cambridge for inclusionary zoning. He says that the recent surge of commercial development there has created an impossibly tight housing market.

"Zoning power is invested in the city to provide for general welfare, and the city should use it wisely and in that fashion," Turk says.

Another problem with the increasing rents in Cambridge is the so called "gentrification" of the city; its transition from an area dominated by blue-collar families to a "bedroom community" of upper-middle class communters.

The referendum criticizes the city for planning large new office and commercial developments but building no new housing.

But landlords counter that such a move would hurt the city economically. Thayer says there is sufficient capital risk in getting a project started that such stringent restriction would drive new development out of town. Laverty adds that a lack of development would decrease the tax base in the city.