 The average income of tenants leaving formerly rent-controlled apartments in Cambridge is much higher than the average income of tenants now moving in. As its foes always pointed out, rent control was a boondoggle for the wealthy. |
THERE ARE only four remaining communist regimes, runs the joke: Cuba, China, Vietnam, and Cambridge.
Of course communism is no joke to its victims, and in Cambridge, the chief victims were for years the thousands of property owners who were made to suffer an excruciating system of rent control. Landlords found themselves treated as near-criminals. They were allowed to charge but a fraction of the fair market rent for their apartments, forced to crawl on their knees to City Hall if they wanted an increase, and routinely insulted and defamed by local officials.
It was the same, more or less, across the Charles River in Boston and Brookline, where rent control operated as well.
The effects of two and a half decades of rent control in so much of Greater Boston were straight out of Economics 101: Neighborhoods deteriorated, housing costs skyrocketed, vacancy rates plunged, bureaucracy mushroomed. Once in a rent-controlled apartment, few occupants would give one up, thus crowding out the very people rent control was supposedly helping — the poor, the old, the friendless. To land one of the coveted units, apartment hunters offered fat "finder's fees." And all the while, property owners watched their life's work go down the drain as rent control made it impossible to earn a decent return on their investment.
But every Berlin Wall eventually falls, and in 1994, in a statewide vote, Massachusetts repealed rent control. It wasn't the end of the people's republics in Massachusetts; it wasn't even the beginning of the end. But it may have been the end of the beginning.
Rent control in the Bay State didn't expire quietly. The return to a free market in housing was fought by noisy gloomers-and-doomers, who warned that Cambridge (and the other towns) would be overrun by rich, white yuppies, that zooming rents would spell an end to the city's "diversity," that greedy landlords would put the screws to their poor tenants.
A spokesman for the Massachusetts Senior Action Council grimly foresaw "huge increases in rent followed by massive evictions" of the elderly.
"If thousands of landlords suddenly jack rent up to market rates," cried a Boston city councilor, Thomas Keane, "thousands of people could suddenly be out on the street. We have to do something."
Most hysterical of all were the 27 Cambridge doctors who compared rent-control repeal to murder. "If rent control vanishes, dozens will die," wailed Steffie Woolhandler, a physician at Cambridge Hospital. "The governor and Legislature are implementing the death penalty."
Well, Woolhandler & Co. can relax. The first comprehensive report on post-rent control Cambridge is out. It is brimming with good news.
It was the city itself that commissioned the study. Atlantic Marketing Research Co. was hired to survey 1,000 renters — current and former occupants of apartments that used to be rent-controlled, as well as of apartments that were never controlled. What it found is that the alarms of rent control's defenders were baseless.
To begin with, the report explodes the propaganda that landlords would gouge their tenants once rent control vanished.
Tenants who stayed in decontrolled apartments, it turns out, are the least likely to have very high housing costs. Only 6 percent of such tenants pay more than half their income in rent — the lowest percentage of any group of tenants in Cambridge. Far from jacking up rents to drive their tenants out, the owners have behaved quite decently. The median rent for tenants opting to remain in formerly rent-controlled units has risen to just $700 — less than the median rent for any other category of tenants! No wonder a whopping 62 percent of these residents have chosen to stay put.
So who is leaving the decontrolled apartments? The affluent leeches who never should have been there in the first place. Of the nearly 6,100 tenants who have moved out, 21 percent make more than $80,000 annually. Among Cambridge renters as a whole, only 9 percent are so fortunate. And who's moving into those units? Not the rich: Only eight percent of tenants taking over decontrolled apartments make more than $80,000, while 55 percent make less than $40,000. One-fifth don't even make $20,000.
Put differently, the average income of tenants leaving decontrolled apartments was $50,920. The average income of tenants moving in is $41,340. As its foes always pointed out, rent control was a boondoggle for the wealthy. Now that it's gone, those well-to-do squatters are finally leaving, opening up affordable housing for those who need it.
None of the alarmists' rhetoric was true. Those "massive evictions" of elderly tenants? Never happened. Of former rent-control tenants who left after 1994, only 4 percent were 65 and older.
"Diversity?" There's more of it now than ever. A mere 12 percent of those who left decontrolled units were nonwhite, but among those moving in, the proportion has more than doubled, to 25 percent.
In short, the return of the free market has been good for the elderly, good for the poor, good for minorities. Those the rent controllers always claimed to be protecting will at last be better off. Rent control was always a fraud. Now Cambridge has the numbers that prove it.
(Jeff Jacoby is a columnist for The Boston Globe).
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