It's Tough Being a Landlord in This City

THIS REFERENDUM question not only confuses several housing issues but suggests a solution that would be both ineffective and unconstitutional because it would be discriminatory. As worded, the question implies that Harvard, by selling its small residential properties to faculty, decontrols rental units. This is not the case.

Cambridge rent control law mandates that any one-, two-, or three-family house is exempt from rent control if it is owner-occupied. Should any property become inhabited by its owner, it is automatically decontrolled. This exemption is not new; it has been part of the ordinance since it was instituted 15 years ago. Once an owner lives in the property, he may do whatever he chooses with the house--rent below market rates, at market rates or not at all.

If the sponsors of Question 2 wish to extend rent control to those small properties, even when owner-occupied, then the original law should be amended to rescind the exemption for owner-occupants.

Preventing Harvard from selling to its academic staff will not preserve the rent-controlled units; if the University simply sold on the open market, the properties would be also decontrolled. Only a fundamental change in the law affecting all small property owners will preserve such units. In other words, the action recommended in this question has little to do with its stated goal: the preservation of controlled units.

Not only does this measure not meet its stated objective, but it is also clearly discriminatory. If Harvard can't sell to its faculty, many of whom are people of moderate income, will other property owners be similarly restricted? Should Mrs. Smith not be allowed to sell to her son? Should Cambridge Manufacturing not be allowed to sell to its employees? On what basis should such judgments be made? Treating one land owner and a group of potential buyers differently than the others is patently unfair.

THE SALIENT issue here is that Harvard is selling. In recent years we have acted as a responsible neighbor by spending considerable funds rehabilitating the properties within the Rent Control Board's guidelines. But it has become increasingly clear that maintaining rental housing in buildings with three or fewer units on a scattered, patchwork basis is not efficient for the University. Such buildings are best tended by an on-site owner-occupant who would become a part of the neighborhood fabric.

Harvard decided to lessen its presence in the neighborhoods and divest itself of some of its smaller holdings, a move which has been encouraged buy those concerned about University expansion. Since Harvard retains no future rights in these properties, no mortgages, no encumbrances, these properties are owned free and clear by the buyers.

Harvard has not ignored its tenants in the implementation of the sale program. The University will not eviet tenants in order to sell. Tenants are notified of the University's intent to sell after the property has been appraised for its fair market value by an outside appraiser. The property is offered first to senior faculty [for two weeks only], then to junior faculty [for two weeks only], and then to the tenant occupants.

To avoid speculation, the sale is restricted to a buyer willing to occupy the premises. Should neither faculty nor tenants be interested, the property is advertised in The Globe and The Cambridge Chronicle, and is sold whether there is faculty interest or not.

The results of the sales indicate that the program has facilitated ownership among a mix of people. Four of the ten houses have gone to faculty, one as sold to tenants, another to children of neighbors. Seven of the ten buyers were already Cambridge residents.

The passage of this referendum, although non-binding, encourages prohibitions which do nothing to solve the problem of affordable housing for low and moderate-income people in Cambridge. Furthermore, if adopted as a policy, it would reduce home ownership opportunities and discourage the University from continuing to sell any of its property in the neighborhoods.

New and creative approaches and cooperation between the University and city officials--not confrontation in the form of a deliberately misleading referendum question--will bring us closer to a solution to the city's complex housing problems.

Sally H. Zeckhauser is the President of Harvard Real Estate, Inc. (HRE).