Boston City Council Passes Wu's Rent Control, BPDA Reform Proposals

The Boston City Council Wednesday voted in favor of enacting rent control and restructuring the city's planning agency.

The votes come as a major victory for Mayor Michelle Wu, who announced the proposals earlier this year. Both proposals had seen pushback from council members, other city officials and commercial real estate industry leaders. The plans each still need approval from the state legislature and governor.

“Today the city council delivered a strong message that the city of Boston needs the tools to address our housing crisis,” Wu said at a press conference Wednesday afternoon. “We hear from residents across every single neighborhood about just how dire it is, and we see families getting pushed out of the communities they grew up in and helped to build.”  

Councilor Ricardo Arroyo presented both items to the city council. The rent control proposal passed in an 11-2 vote, which was met with loud applause from the audience.

"This is a monumental act for the city of Boston," Arroyo said at the meeting. "I commend the mayor for moving forward with a rent stabilization plan to address what has been and is an ongoing longstanding issue of price gouging and rent gouging."

The rent control plan would tie the rent increase limits to the consumer price index. In a normal year with 2% inflation, landlords would be allowed to increase rent by 8%. In years with high inflation, they would be allowed to raise it by as much as 10%.

Arroyo said that although the rent control proposal might not be enough for some renters, it can provide protections to others while also compromising with landlords in the city.

"I understand, for some, 10% does not go far enough and in most cases, I agree, but for those individuals, this would be a large bomb on a problem that led to them either seeking new housing, rental home, and security or being put out on the street," Arroyo said. 

Councilor Michael Flaherty asked for a "friendly amendment" to the rent control proposal that would allow property owners that live in the city but don't live in their rental properties to be excluded.

Although the amendment to the proposal didn't pass, Councilors Ed Flynn and Frank Baker said it would have helped protect the smaller landlords as the mayor looks at other proposals that would impact real estate.

"In this time of increased IDP, increased linkage, transfer taxes, we are going after an industry that has created generational wealth for the middle class in Boston," Baker said. "That villain that owns two- and three-deckers, if they came from my neighborhood, they planted a stake in the neighborhood 30 years ago."

Earlier this month, there were signs the council was willing to compromise with the mayor on parts of the proposal, the Boston Globe reported. Councilor Kendra Lara told the Globe that the plan is "untenable" and that she is "open to negotiating" the proposal.

The real estate community has voiced concern about the policy and what it could mean for the future of development.

Organizations like NAIOP and the Greater Boston Real Estate Board have pushed against the rent control proposal. Last month, the GBREB began a $400K lobbying campaign against the proposal, which it said it would continue if the plan goes to the state for approval. 

The council also voted 11-2 to pass Wu's plan to abolish the Boston Planning & Development Agency as it currently exists and transfer the powers of the Boston Redevelopment Agency and Economic Development Industrial Corp. to a singular agency, which would also be named the BPDA.

"I think this is a timely moment to look at the BPDA and how we put planning before development," Councilor Ruthzee Louijeune said at the meeting. "Here empowering the BPDA to use urban renewal for equity, resiliency and affordability and development planning, I'm excited that we will actually begin to center community voices."

During the mayor's State of the City address in January, she announced plans to dismantle the planning agency and shift certain responsibilities to other departments including the Mayor's Office of Housing. The move had been one the mayor promised over a year ago during her campaign.

Wu planned to establish a Planning Advisory Council that would focus on a range of planning decisions and modernizing the city's zoning codes. She also said that a new City Planning and Design Department would be created to diminish the old agency's influence. 

The restructuring of the BPDA has also received pushback from its own board of directors and staff. At its last meeting, the board said that there was still uncertainty from employees about the proposal and decided to table the conversation for a future meeting, the Boston Business Journal reported.

"Employees of EDIC ask how this impacts them and their retirement," Flynn said. "I think those are important questions and we still have a lot of work to do in making sure that employees in the BPDA and EDIC are treated fairly during this process."

BPDA Director James Arthur Jemison, speaking to an audience of real estate professionals at a Bisnow event Tuesday, said that the Wu administration is looking for feedback from the industry and may make changes to some of its proposals, which also include linkage fee hikes and an expansion of the Inclusionary Development Policy.

Opponents of the policies may have a better chance of blocking them at the state level, as Gov. Maura Healey has begun to emerge as an ally to the business community who acts as more of a centrist than Wu. 

"Today, I'm going to be celebrating, but tomorrow we're really going to set our sights on Beacon Hill, where we're going to get to work on the next phase of what our work is going to be, which is bringing increased tenant protections to the people of Boston," Lara said.

Wu said at the press conference that city leaders frequently talk with state officials, and she believes they share the same urgency about solving Boston's housing affordability issues.  

"We'll make that case up at the state house, and we're going to go up strong with a big voice from the city of government in doing so," Wu said. 

UPDATE, MARCH 8, 4:10 P.M. ET: This story has been updated with comments from Mayor Michelle Wu's press conference.