A Crippling Blow to Rent Control

CAMBRIDGE would be a poorer place if Proposition 1-2-3 passed. Yes, some people would be richer--realtors and landlords, for instance. But overall, the city of Cambridge would be a less rich, less diverse and less dynamic place to live.

Why? Because one effect of 1-2-3 would be that more well-to-do residents would live in rent-controlled housing, while low- and moderate-income tenants would discover it harder to find and affordable apartment in Cambridge.

Since 1-2-3 proposes a change in rent control laws to enable tenants to buy their apartments as condos and then occupy them, many landlords would be casting an eye around for wealthier tenants--who would agree to buy their apartment when they move in, maybe even on a time plan.

All these condos would be removed from rent control permanently, and could be rented at high market rates. Landlords could also continue a trend to "condo rehab," extensively renovating buildings in the hope they will go condo, clearing apartments of poorer tenants when rents go up--as they inevitably will.

And current tenants who won't buy? Brookline, which last year repealed a similar law, illustrates this danger: the Brookline Rent Control Board and tenant activists heard that tenants were "encouraged" to leave if they didn't want to buy. And the problem of harassment is difficult to prove and even harder to stop.

LET'S look at who gains from 1-2-3. Fred Meyer, who calls himself the author of Prop 1-2-3, may certainly be motivated by a personal ideology linking freedom with owning a condo, but most other supporters ($56,000 strong, according to the 1988 State Campaign Finance Report) are motivated by profit. Not surprisingly, among the list of financial contributors who helped get this condo bill on the ballot are some of Cambridge's most notorious landlords.

Some of them have managed to hike up rents so much in their rent-controlled buildings that poor and even moderateincome tenants have been forced to leave, and one is a fixture at evictions at the Rent Control Board. Some are slum landlords with extremely poor tenants, who let buildings run down, and do not even fix leaking roofs.

In short, 1-2-3 backers are not seeking to charitably introduce some tenants to the joys of homeownership, but, rather, to unload buildings which do not turn enough of a profit.

Realtors like Meyer stand to gain quite a bit financially, since 1-2-3 would let the new condo owners sell their apartments back when they are no longer restricted by rent control. And owners of these previously rentcontrolled apartments also stand to gain because they would be able to rent at market prices, or resell for an amount considerably higher than the original purchase price.

THE next question is, who loses? All Cambridge tenants, including those in non-rent-controlled apartments--up to 70 percent of the Cambridge population. As more apartments are converted into condos, the rental supply shrinks and rents get higher all over the city.

But the people most at risk from this bill would be people participating in the Section 8 and 707 subsidy programs. Because landlords benefit from extra government rent payments (and the Housing Authority only subsidizes lowcost apartments) about 80 percent of those subsidized tenants now live in rent-controlled apartments. With a law like 1-2-3, any of these tenants seeking rent-controlled apartments would be left out in the cold. Extra rent payments cannot compete with condo profits.

Without a doubt, more people would place themselves on public housing waiting lists if fewer rent-controlled apartments were available. In all likelihood, the number of homeless families and individuals in Cambridge would increase.

BACKERS of 1-2-3 offer us Propositions 1 and 2, which would eliminate rent-controlled units through sales and decimate housing subsidy programs, and then hope we will believe Proposition 3 will make everything turn out all right.

Unbelievably, this part of the bill claims that condo sales would generate new property tax revenues which could be isolated from other tax revenues and placed in a trust fund for subsidies and rental housing construction. This section contains several misconceptions.

First of all, under current law, all taxes belong to the city treasury. An outside group or bill cannot earmark money for specific funding goals.

Secondly, those who owner-occupy a house or condo are eligible for a property tax exemption, making it very unclear how much, if any, new tax revenue the condo sales would generate. And it is questionable whether 1-2-3 backers really gave Proposition 3 any thought. Even if funds were available and earmarking funds were legally possible, could they design a citywide subsidy program without creating a new city agency? Could they direct the city to build new low-cost rental programs?

Ironically, one segment of Cambridge which stands to lose are owners of market-rate condos. The resale values of these units would decline markedly with a glut on the condo market.

AND now we come back to the less affluent segment of Cambridge those people who would not be here without rent control. For many city residents, freedom is a very different thing than buying a condo: it means having a home where you can afford the rents and you do not live in constant fear of eviction. These are the very protections rent control offers.

In a city as popular as Cambridge, demand for retail housing is greater than supply. That means that in an unregulated market, with fewer than 1 percent of rental apartments vacant, market rents would skyrocket.

When we lose affordable apartments, we lose them forever, because government funding for low-cost units has not been renewed, and private developers have been vigorously fighting linkage plans. More and more condo developments and very few apartment buildings have been constructed in recent years.

Cambridge stands to lose in all ways from Proposition 1-2-3. As we lose affordable housing, we lose residents and the businesses, restaurants and shops which they patronize. So removal from rent control through condo conversion, whether from within (by current tenants) or without (by new tenants or by landlords) has far reaching economic and social results. The entire neighborhood fabric of Cambridge would change.

It all comes down to fairness: the need of low- and moderate-income people for affordable housing over the greed of owners and realtors.

Do not let proponents of Proposition 1-2-3 fool you. It is not about homeownership, although phrasing it that way is a clever ploy. Proposition 1-2-3 is a well-funded effort aimed at the erosion of rent-control. Its sponsors are only concerned with the profits that condo sales and resales could generate.

Stacie Marinelli is co-chair of the Committee to Defeat Proposition 1-2-3