Rent Control Would Hurt the People It Intends to Help

Much has been made about this November’s ballot measure to decide whether to repeal the state’s 1994 ban on local rent control and impose a binding statewide cap on rents.

Lawmakers have also proposed, as a backdoor form of rent control, that the Legislature restrict the use of algorithmic pricing software that helps landlords determine what their properties are worth.

Rent control in any form would ultimately hurt the very people it intends to help.

The Massachusetts ballot measure would cap annual rent increases to either 5 percent or the annual increase in the consumer price index, whichever is lower. But this benchmark has historically failed to track the actual costs of maintaining older housing stock.

Between 2000 and 2024, rent inflation averaged about a full percentage point per year above headline CPI — 3.6 percent versus 2.6 percent — exceeding CPI in 18 of those 25 years, and growing by a cumulative 140 percent against CPI’s 88 percent. Landlord operating costs have grown faster still: the National Multifamily Housing Council reported that property insurance alone rose 26 percent in 2023. A cap pegged to the CPI or 5 percent, whichever is lower, would force rents to grow more slowly than historically — and more slowly than the costs they must cover.

A building whose rents cannot keep pace with rising costs is a building whose owner will defer repairs, skip renovations, and eventually convert the property to condominiums or other uses that escape the cap. The pattern is documented across rent-controlled cities from New York to San Francisco, where decades of regulation left a disproportionate share of the controlled stock in poor physical condition relative to comparable market-rate units.

Rent controls generate arbitrary redistribution of resources. The Massachusetts cap would apply regardless of tenant income or need: A high-earning Back Bay tenant would receive the same protection as a low-income family in Chelsea, and — in dollar terms — a larger benefit, because the cap is a percentage of a higher base rent. The transfer of resources would run from landlords to incumbent tenants — not from landlords to whomever is most in need.

The ballot measure would exempt new construction for its first 10 years, as well as owner-occupied buildings of four units or fewer. But for all other rental housing, there would be no vacancy decontrol: When a tenant moves out, the new tenant would inherit the old rent rather than paying market rate, offering landlords no relief from the unit’s artificially discounted price.

The costs of rent control would also spill beyond the controlled sector. Deteriorating rent-controlled buildings would impose costs on surrounding property, making the neighborhood less attractive and dragging down values for uncontrolled units in the area.

A study found that ending Cambridge’s rent control in 1995 added about $1.8 billion to the value of the city’s housing stock over the following decade — and that more than half of that gain consisted of spillover effects for never-controlled units. In other words, the majority of the cost of rent control had been borne by property owners that the regulation had never directly touched.

Supporters of the Massachusetts ballot measure argue that its 10-year new-construction exemption would preserve the incentive to build new rental housing. It would not. Multifamily developers underwrite buildings on horizons of 20 to 40 years. That is why Governor Maura Healey has reported that six developers lost their funding after the ballot question cleared its signature threshold to move forward, with thousands of potential units at stake.

If Massachusetts wants to lower rents, the most important policy question is how to build more housing, not how to ration the housing the state already has. The tools to accomplish this are familiar and well-studied: Loosen zoning restrictions, raise allowable floor-to-area ratios, end single-family-only districts, legalize accessory dwelling units, and shorten permitting. Healey’s housing agenda already points in this direction, and the experience of cities like Austin — where permissive zoning enabled a surge of new construction and a meaningful drop in rents — suggests that these policies work.

Massachusetts voters rejected rent control in 1994. They should reject it again.