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July 18, 2006



Generally speaking, rent control creates artificial scarcity. In markets with rent control, it may be very difficult to find an apartment that is available. Also, since the price of units is artificially depressed, the price of available units may be inflated to compensate.

Also, rent control leads to so-called "gray-markets." Tenants who have favorable lease terms tend to hold onto rentals for a long time and may illegally sub-lease them as opposed to putting them back on the market.

Sadly, the worst impact of rent control is that it creates a strongly adversarial relationship between natural affinities: landlords and tenants. If a landlord has a building that is filled with tenants paying far below market rents, the landlord has a strong economic motive to evict the tenants, or to convert the building to another use--such as condominiums. In most markets with rent control, there are also strong restrictions against converting rental units into condos. That is where we could be heading.

Other cities say that rent control actually drives out affordable housing. Many people who live in rent controlled housing are professionals, while the poor, elderly and students are often excluded becuase of their obvious risk created by changing the laws to make them harder to evict under normal circumstances. If you increase the risk of a tenant giving a landlord a hard time you also reduce the likelyhood of providing housing to the risky tenants.

Remember landlords, allways do a good credit check. The eager tenants are the ones who were turned down somewhere else. And it is best to charge a little less for good tenants than it is to raise rates and accept the flakes who are willing to pay more. They can also be a lot of trouble. Most tenants are great. But one bad one can ruin you. It is all about managing risks. These laws will substantially change your risks. I am sure a lot of owners are going to be steering their ships out of risky waters soon so that means there will be a lot of risky tenants out looking and willing to accept crazy deals.

Lenore Schloming

It may be helpful for people to know that I, the person who wrote the above commentary "Sorry Mayor Joe, condo proposal is rent control," am the president of the Small Property Owners Association.

Ron Newman

And you're also one of the people responsible for the 1994 referendum, in which voters statewide were asked to decide whether three municpalities could continue to have rent control. The referendum narrowly passed statewide, even though it lost by large margins in each of those three municipalities.

This was an abuse of the democratic process, comparable to having a statewide referendum on whether Somerville should allow an IKEA to be built.

What SPOA doesn't understand.

I am a conservative, and a capital R appears next to my name in voting list in the Elections Department. As a conservative and a Republican, I understand that it is important for the government to regulate the business community to protect consumers and maintain a sense of order in commerce. I also understand that regulation can go to far, and have commented on how "political intervention" in business affairs can be such an example. Also, I usually do not agree with Ron or PDS.

On the issue of the Condo Conversion Ordinance, however, it seems that the SPOA folks are missing a point: being a landlord is a commercial enterprise, just like owning a bar or owning Microsoft. As such, it is unreasonable to contend that the "government should get off my back," just because you (and your organization) are "small property owners." The Condo Conversion Ordinance is a good idea and promotes efficiency in the real estate market; namely, the elimination of small property owners. Small property owners do not achieve the economies of scale of larger property owners and thus cannot offer their tenants amenities such as a pool, central air conditioning, and on-site maintenance. As such, they are inefficient, and should be done away with.

I agree with Ron, but likely, as Ron may point out, on different grounds.

Soner or later we choose

Yes, Ron you tell him. It would also be like allowing non property owners to vote on what property owner’s rights are. Like having renters vote on ownership rights. Or having all white people vote on whether or not blacks are allowed to vote. Crazy Crazy stuff. How about allowing all straight people to vote on whether or not gays can get married. Or having them vote on whether or not they are allowed to adopt? Or how about having men vote on whether women can have the right to choose abortion? Or how about we give people the right to choose but we close down all the legal abortion clinics through the use of even crazier laws? So even if they have the legal right they won’t be able to find a clinic. Then, after we do all of that, we don’t allow condoms in schools and we preach abstinence. Because abstinence is so much more realistic. We actually believe in it. And when we find newborn babies in dumpsters and toilets we can act all shocked. Because, why would anyone do that when they have the easy realistic alternative of abstinence instead of condoms? Because you are all crazy!

But tell me again on why renters can vote on whether property owners can raise the rent? And why the rest of the state should not be concerned about rent control coming to their towns? Or why our own mayor is against rent control? You know what though? With out actually hearing Joe’s explanation and reasons for being against it I can’t believe he really is against it. Can anyone tell my why the mayor is against rent control? Can the mayor?

Ron Newman

Umm, yeah. I don't advocate "eliminating" an entire class of people, and I'm surprised that anyone calling himself a "conservative" would support that.

The housing stock of Somerville is going to remain physically pretty much what it is now, regardless of whether it is owned by small on-site landlords, large absentee landlords, or individual condo dwellers. The "economies of scale" are not available unless you advocate wholesale demolition and rebuilding of our city.

Pro-Wholesale Demolition

I am generally pro-wholesale demolition. Urban renewal is a good idea depending on the site.

Ron Newman

Tell that to Jim Campano (ex-West Ender in Ward 6).

What SPOA doesn't understand.

Your post was joke right? You have to be kidding. I mean if there were econmies of scale would it be cheaper for you to produce supply? and if your supply was so much better would'nt the people demand it and choose it? That was all a joke right?

So the RIAA and Motion Picture associations need to also understand that they can't offer the 'economies of scale’ that are now available with new technologies and the Internet. We need some laws to protect this new efficiency in media distribution and end the high prices we pay for digital media. Or wait just a minute, don’t we have a right to choose? I choose free downloads. I choose a pool and AC, I mean if the rent is the same.

So with small property owners out of the way, large develporers gain a huge financial advantage?

The interpreter

Since when is Lenore Schloming and her son
"Small Property Owners"? ... they own half the apartment units in the People's Republic of Cambridge and are buying up as many in nearby cities ... what do they have to gain ...... just guess

Lenore Schloming

We at SPOA define "small property owner" as a family who owns and operates rental property without hired management. That means they do their own management (finances, repairs, tenant relations) themselves even if they hire a plumber, electrician or contractor to do specialized jobs. "Small owners" include part-time as well as full-time owners. For the record, my husband and I own three small houses in Cambridge and Somerville, and our last purchase was in 1992.

rent control

I really can't agree with you about the proposals.

Gabriel Fried

The city talks out of both sides of its mouth on this issue. On the one hand, they want, for political reasons only, to be as tenant friendly a city as possible. This is because tenants outnumber the landlords and the tenants vote. On the other hand, they can't seem to pass up the substantial extra tax revenue that comes from the condo conversion and sale process both from the division of multifamily properties into single units (the sum of the parts is greater than the whole) but also the investment in the properties that precedes the sales.

One of the most inane "naming conventions" is that the application to convert your multi-unit building to condos is referred to as the application to "remove rental properties from the market" but there is no mention of the fact that condo buyers can and do rent their units out. The whole thing is silly. Also silly is the rubber-stamp-a-thon for condo conversions. Pay a visit to the next one, they're open to the public. See for yourself.

Somerville should do what it can to protect tenants from unscrupulous landlords, but not landlords who want to keep rents consistent with the market. Remember, rents can go down as well as up so there are times when the incumbent tenant has a negotiating advantage.

That's my rant.

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