Rent Control

Expiring-use rent control: how far will they go?
A Year of Deception

Legal service lawyers and public officials concealed federal laws

     Concealed: Federal law prohibits expiring-use rent control
     Concealed: Federal law grants generous subsidies to expiring-use tenants
     Concealed: The federal government has never cut any existing tenant subsidy
     When the city of Cambridge’s chief legal counsel was asked recently if he had reviewed the city’s home-rule petition for expiring-use rent control, he replied proudly that he not only reviewed it, he helped draft it. But when asked if he reviewed it specifically in light of a section of a 1990 federal law that prohibits rent control on expiring-use buildings, he abruptly claimed attorney-client privilege and refused to comment further.
     Was there something here to hide?
     For a year now, both Cambridge and Boston have been debating and voting up home-rule petitions to the State House proposing rent control for these large towers of low-rent apartments built 20 years ago with federally subsidized mortgages.
     For the 60 expiring-use buildings across the state, owners are soon eligible to “pre-pay” their mortgages and go to market rents. Activists have quickly seized this opportunity to scream “crisis” and “housing disaster” and have called for rent control limited to these buildings. And if their home-rule petitions succeed in Cambridge or Boston, such a “minor exception” to Question 9 could eventually result in local rentontrol boards in dozens of Massachusetts communities - and a new, stronger foothold for tenant activism in the entire state.
     Throughout this costly, time-consuming debate, however, there has been no mention of a federal prohibition.
     Then, just weeks ago, SPOA leaders were reviewing the federal laws affecting expiring-use buildings and discovered it: a specific prohibition that no state or local rent control law can be aimed just at expiring-use buildings.
     The prohibition is part of the 1990 law that gives expiring-use owners the right to prepay their federally subsidized mortgages and charge market rents, and the prohibition blocks any local effort to undo the specific rights and benefits granted by federal law. The prohibition is a standard “preemption” of any state or local law that contradicts or interferes with a federal law, an entirely accepted legal priority needed to make federal laws effective.

Privy Counsel?
     It is shocking to realize that a year of debate passed without a word of the prohibition. Tenant emotions stirred — anger and hope — and not a word of the prohibition.
     One might expect tenant advocates to stay silent. But the city solicitor is the attorney for the city council and presumably not a partisan attorney for a special interest group. The city solicitor, however, has been co-drafting laws with Cambridge and Somerville Legal Services: in the past year, two expiring-use home-rule petitions as well as a newly proposed anti-condo-conversion law. This same co-drafting presumably also occurred for Cambridge’s highly punitive code violation fines ordinance and other pro-tenant proposals in the further past.
     Can it be true that the city solicitor deliberately concealed the federal prohibition from all or some of the city councillors on behalf of partisan interests?
     Anthony Galluccio, the only councillor to vote consistently against the expiring-use petition, said he has been told nothing of the prohibition by the city solicitor. Galluccio, moreover, said knowledge of the prohibition would have “made the difference” in his recent slim electoral loss to Alice Wolf for a state rep seat.
     The city solicitor has been either incompetent (if he did not know about the prohibition) or acting unethically on behalf of partisan interests (if he did know and concealed the information from some or all city councillors).

Deception on Subsidies
     Besides the prohibition, officials and activists have also concealed generous subsidies available to expiring-use tenants, encouraging tenants to believe they will be out in the street if they can’t afford market rents.
     Susan Schlesinger, Cambridge’s top housing official, has repeatedly told the city council that tenants in most of Cambridge’s expiring-use buildings “should be concerned about losing their housing” and that federal rent subsidies for them have been funded “for one year” and beyond that “we don’t know.”
     And similarly, Susan Hegel, staff attorney for Cambridge and Somerville Legal Services, said SPOA newsletter editor Skip Schloming was wrong when he quoted a 1990 federal bill that authorized subsidies and other protections for needy expiring-use tenants if their owners become eligible to charge market rents. Hegel told the city councillors and tenants that a recent federal bill “made numerous changes to the statute that’s on the books and one of the changes is very explicit that those tenant protections no longer apply.”
     Scurrying to check the laws, Schloming and SPOA vice president Jon Maddox discovered both the undisclosed prohibition of expiring-use rent control and just exactly what federal help expiring-use tenants are entitled to.
     Yes, an older law no longer applies. But what Hegel left out is that the new bill, passed by Congress just this past September, authorizes rent subsidy vouchers for almost twice as many tenants as the old law. The new law protects 89% of Cambridge’s expiring-use tenants; the old law protected only 49%. In addition, the new vouchers are “enhanced,” paying owners a higher rent than the old vouchers and guaranteeing that the tenants’ present owners will gladly keep them as tenants. Only middle-income tenants, who can afford market rents, won’t get subsidies.
     If a lawyer knows that a new law repeals provisions in an old one, they know the rest of the law. Hegel knew the new law was much better, and so did city housing officials. But instead of telling the public that Congress just beefed up federal subsidies for all expiring-use tenants across the country, Hegel and city officials have cried “crisis” and “federal cutbacks,” concealed the subsidy upgrade, stirred up tenant fears and got the Cambridge City Council to vote up a second home-rule petition for expiring-use rent control.

Fake Funding Crisis
     There is one more deception.
     These same legal service lawyers and city housing officials have repeatedly told the city council and tenants that federal housing money is uncertain. They say federal subsidies are authorized for just one year only, and they complain constantly about federal housing “cutbacks.” What they don’t say is: (1) one-year funding is standard operating procedure in all government budgets and (2) the federal government has never cut any existing subsidy program, never, ever. All that has been “cut” is the growth rate of new subsidies.
     An expiring-use specialist from the Boston HUD Regional Office says the federal government has “never cut vouchers for as long as I have been here” — nine years — and says further: “I have never heard them remove a voucher from circulation.” That’s right, the whole much-publicized “federal housing crisis” has not entailed any reduction in programs. Every year federal housing programs get bigger and bigger, and Congress has only slowed their growth.
     Not telling expiring-use tenants this critical fact alarms them needlessly and lets them think — erroneously — that the federal government will leave them in the lurch. Nothing could be further from the truth. But the truth is obviously not what these public figures trade in.
     Public knowledge of the federal laws — the rent control prohibition, the generous subsidies, the secure history of funding — would have eliminated this past year of expiring-use lawmaking and lobbying. Instead, Boston and Cambridge have been put through a wasteful charade, tenants have been unjustifiably terrorized, and if the proposals were to be enacted, the cities would be forced into costly but doomed legal battles in court. Of course, it’s the taxpayers who would pay for the cities’ legal battles, while the private expiring-use owners would have to foot the bill to defend their property rights.