Rent Control

Conspiracy to hide the truth?
Federal law prohibits expiring-use rent control

Did legal services lawyers who drafted the rent control petition know about the federal prohibition and deliberate hide it in the public debate?
      For almost a year now and despite Question 9, both Cambridge and Boston have been debating and voting up home-rule petitions to the State House proposing rent control for so-called “expiring-use” buildings with federally subsidized mortgages and artificially low rents.
      Since 60 such large-scale, high-rise apartment buildings exist across the state, this push for a limited-focus rent control, if successful, would seem likely to result in establishing local rent control boards in dozens of Massachusetts communities . . . and from there, what?
      But just weeks ago, SPOA leaders discovered that federal law “preempts” or prohibits any such state or local rent control law aimed just at expiring-use buildings. The “preemption” is part and parcel of the 1990 federal law that gives expiring-use owners the right to prepay their federally subsidized mortgages and charge market rents, and the preemption blocks any local effort to undo the specific rights and benefits granted by the law - an obvious requirement if federal law is to be effective.
      The federal law puts the whole issue above any local debate (like whether to create an exception to the Question 9 ban). And it raises the question: did the tax-and-charity-funded lawyers at the Greater Boston Legal Services and the Cambridge and Somerville Legal Services, who drafted these petitions, know about the preemption anddeliberately keep the issue out of the whole past year’s debate?
      Did newly elected State Representative Alice Wolf from Cambridge, who won over pro-landlord Anthony Galluccio with a campaign that played on tenant fears and called for rent control, know the home-rule petitions would violate federal law and be unenforceable?
      When Cambridge Assistant City Solicitor Don Drisdell was asked if he had reviewed the home-rule petition, he replied proudly that he not only reviewed it, he helped draft it. But when asked if he reviewed it specifically in light of the preemption section of the 1990 federal law, he suddenly claimed attorney-client privilege and refused to comment.
      The preemption section (U.S. Code, Title 12, Ch. 42, Subch. 1, Sec. 4122) provides that no state or municipality may “establish, continue in effect or enforce” any law or regulation that “inhibits prepayment” of a mortgage, “impairs the ability of the owner to increase rental rates” or “is limited only to low-income housing for which the owner has prepaid the mortgage.” In plain violation, the home-rule petitions allow municipalities to impose rent control on expiring-use properties if their owners prepay their federally subsidized mortgages.
      Perhaps it was ignorance. Or the petitions’ drafters knew their rent control proposals would face a costly and doomed legal battle in court if ever enacted, but preferred the political gain by stirring up an ultimately pointless debate.
      Preemption isn’t the only thing these lawyers and local officials are keeping from public attention. They are not telling expiring-use tenants about federal subsidies especially approved just for them - instead letting the tenants believe they will have to pay market rents or move.
      In researching the laws, SPOA discovered far more protections in federal law for expiring-use tenants than City officials or tenant spokespersons had conveyed to the public.
      An appropriations bill passed by Congress just this past September authorized on-going rent subsidy vouchers for 89% of the tenants presently occupying Cambridge’s expiring-use buildings if their owners prepay their mortgages. An older law gave vouchers only to 49% of these tenants. Similar vouchers are authorized for tenants in Boston and other expiring-use buildings across the state.
      In addition, the new law “enhanced” the old vouchers, allowing owners to collect even higher rents than the HUD-defined standard rent, up to whatever the owner asks for as long as it is “comparable” to the rent charged for similar market rate apartments in the area. The vouchers are authorized indefinitely.
      Yet Cambridge’s top housing official told the city council that tenants in most of Cambridge’s expiring-use buildings “should be concerned about losing their housing.”       And similarly, Susan Hegel, staff attorney for Cambridge and Somerville Legal Services, accused a SPOA leader of being inaccurate about federal help for tenants, saying that the September appropriations bill “made numerous changes to the statute that’s on the books and one of the changes is very explicit that those [earlier] tenant protections no longer apply.” She neglected to mention that the bill replaced the old law with the increased vouchers.
      Maybe we are naive about politics, but we don’t think a city’s own legal counsel or tax-funded attorneys should be deliberately concealing relevant information about applicable laws.