Rent Control

Will you fight for your property’s value?

enacted in 1985 when rent control and anti-landlord sentiment was still going strong in Massachusetts. Somerville’s existing condo conversion ordinance is worse than the one that was just defeated.

Somerville’s existing “old” ordinance regulates condo conversion in all two- and three-family properties, has a condo conversion review board (allowing tenants to question every step of the conversion process and delay it), and has payouts to tenants almost as high or higher than the just-defeated ordinance. Worst of all, the existing ordinance allows the condo review board to deny a conversion permit for the flimsiest of reasons.

Need for action

Unless property owners express strong desire right now for DE-regulating the two's and three's and eliminating the condo conversion review board, it will not happen. And all the effects that SPOA wrote about in its letters to Somerville owners will continue as long as the old ordinance is not repealed. Two- and three-family properties are devalued. Owners are losing equity in their properties. The city continues to spend money maintaining a condo conversion review board that will run up owners' costs tremendously to condo-convert. Tax revenues from the two's and three's are reduced, shifting the tax burden to single-family and condominium homeowners. The city will lose the value of higher property values and tax revenues from condominiums instead of rentals. Without further action from the Board of Aldermen, all these effects will continue.

Somerville property owners now have heightened awareness of the issues involved. At the same time, the Aldermen should be highly sensitive to the wishes of the city’s property owners. It makes sense to build right now on this momentum. See the Action suggestions at the end of this article.

Rejected by all

The existing ordinance is rejected by all parties. Tenant and housing advocates want to update it by “clarifying” undefined terms and limiting the grounds for denying a permit, to make the ordinance less vulnerable to attack in the courts. Property owner advocates – SPOA as well as the Greater Boston Real Estate Board – want to soften the harshest features of the ordinance.

SPOA, in particular, takes a strong position. We want to remove all two- and three-family properties from regulation under the ordinance and eliminate the condo conversion review board. Removing the “two’s” and “three’s” would bring Somerville in line with all the cities and towns in the rest of the state. It would raise property values in a large segment of the city’s residential properties, cutting taxes for single-family and condominium homeowners while at the same time improving tax revenues to the city.

Eliminating the condo conversion review board would remove a heavy layer of bureaucracy that costs everyone. Condo-converting property owners must hire expensive lawyers to negotiate the intricacies of the review board, and Somerville’s property tax payers in general must pay for the administrative staff and overhead that supports the board’s daily operations. Without the review board, enforcement of the ordinance would be through the courts. This enforcement mechanism, already paid for by state-level taxes, is used in the state condo conversion law, which applies only to four-unit and larger properties and governs condo conversion in all cities and towns that do not have local ordinances. Only 13 municipalities across the state have local ordinances.

Worst possible time

As one Somerville professional said, the proposed new ordinance came at the worst possible time, given today’s economic climate. And SPOA was quick to point out this poor timing to Somerville owners.

Condo conversion regulation applied to all of Somerville’s rental properties depresses the value of a huge swath of properties in the city, only adding to the steep loss of value from the economic downturn. At least deregulating two- and three-family properties would give a boost to property values when owners most need it. (Four-unit and larger properties cannot escape regulation because of state law.) Meanwhile, depressing property values reduces tax revenues to the city when it is also in great need because of the economy. Finally, operating a condo conversion review board adds costs to the city budget at a time when the city needs to cut back on services.

In other words, now is the time for the city of Somerville to wise up to the broad negative effects of condo conversion regulation, especially in our bad economic state, and adjust accordingly. Unfortunately, tenant and housing advocates want to take a bite out of rental property owners regardless of the need. Most tenants can relocate to new apartments without requiring extra assistance or lengthy amounts of time. Those few who do need help should qualify for tax-funded transitional assistance, which has been instituted just for this purpose.

SPOA will continue to push for deregulation of the “two’s” and “three’s” and for elimination of the condo review board.

Somerville owners need to act once again

Somerville owners should once again contact their Ward Alderman and all four At-Large Aldermen (see contact information below) and urge them to DE-regulate two- and three-family properties entirely and eliminate the condo conversion review board.

Non-Somerville owners may also contact the Aldermen, but please identify yourself as a non-resident and non-owner so that the Aldermen are not irritated or confused by outsiders chiming in. With its heightened regulation of the “two’s” and “three’s,” and a condo review board very similar to a rent control board, Somerville is a horrible precedent in landlord-tenant relations for the state.

Contact information for the Aldermen:

Tell the Aldermen you do not want to be under condo conversion regulation. Tell them you do not want Somerville to be the only city in the state to regulate the “two’s and three’s.”

Contact all four At-Large Aldermen and your own Ward Alderman:

At-Large Aldermen:

Dennis Sullivan

617-628-1857

AldermanSullivan@aol.com

8 Florence Street

Somerville, MA 02145

William White, Jr.

617-625-9110

william.a.white@verizon.net

16 Browning Road

Somerville, MA 02145