Overall rents drop

[Cotuit]

Rents slip as vote nears on controls

Survey: City's average is $90 less than in '02

By Chris Reidy, Globe Staff | December 1, 2004

As the Boston City Council prepares to vote this month on a form of rent control, a survey released yesterday found that the average rent for a new lease is $90 a month lower than two years ago, a sign of continuing softness in the rental market.

The average asking rent for Boston apartments of all sizes was $1,775 a month, down from $1,865 in October 2002, according to Northeast Apartment Advisors Inc., a consulting firm that conducts periodic surveys of the larger landlords in the rental market.

That drop is evidence that the proposal to give tenants the right to dispute some rent increases is unnecessary, because market forces are resulting in a greater housing supply and lower rents, said Tom Meagher, Northeast Apartment's president.

Meagher, a rent control opponent, said government attempts to manage the market will lead to undesirable consequences.

''Any time you mess with the market, you're not going to like what you're going to get," he said.

But Kathy Brown, coordinator for the Boston Tenant Coalition, said, ''Many working-class people still have a hard time finding affordable housing, and some are still getting hit with big rent increases."

The coalition is among the supporters of a rent ''stabilization" measure that would give tenants in Boston the right to dispute some rent increases. Elderly and disabled tenants could challenge annual increases of more than 5 percent; others could appeal increases of more than 10 percent. To encourage the building of more rental units, construction from 2002 forward would be exempt from the stabilization provisions.

Before Massachusetts citizens voted in 1994 to end rent control, landlords had little incentive to build new units, Meagher said, and the tight supply helped to drive up rents. Since rent control ended, Boston housing production is up, he said, and more supply has helped keep rents in check.

But much of that new supply is luxury units that can gentrify a neighborhood and cause nearby rents to rise, Brown countered.

''My sense is there's a softening of rents at the high end," added Michael Stone, a professor of community planning at the University of Massachusetts at Boston and a supporter of the stabilization measure. ''I don't have a sense that rents are declining at the low and moderate ranges."

Several factors have contributed to Boston's soft rental market. During the recent recession, Massachusetts lost more than 200,000 jobs and is only slowly regaining them. Meanwhile, low mortgage rates have thinned the ranks of renters by making it easier for them to become homeowners.

At Hamilton Co., a large local landlord, the vacancy rate ''is close to 5 percent," said Harold Brown, Hamilton's chairman. ''That's pretty high. Normally, we hover at 3 percent."

Meagher's survey contacted mostly large landlords who collectively manage 14,500 city rental units, many of which include parking and utilities with rent. The survey did not include mom-and-pop landlords, who generally charge lower rents, Meagher said.

The city estimates there are about 112,000 market-rate units occupied by renters; in addition, there are roughly 50,000 units occupied either by residents receiving a housing subsidy or living in public housing.

From The Boston Globe