Say No to 1-2-3

LANDLORDS and the real estate industry have been trying to whittle away at Cambridge's rent control law for the past 20 years. But none of these attempts have been as sly as the Cambridge ballot initiative known as Proposition 1-2-3. Proponents have used misinformation and deception to obscure the real issue--rent control--that the referendum addresses.

Rent control in Cambridge isn't perfect. But its problems--especially the bias towards wealthier tenants--would only be exacerbated by the passage of the referendum. In the guise of increasing tenant "choice" and increasing the supply of affordable housing, Proposition 1-2-3 seeks to make a financial killing for Cambridge landlords at the expense of some of the city's poorest residents.

Friends and foes of rent control alike should support economic diversity among tenants. Cambridge voters should support the Cambridge Tenants' Union and oppose Proposition 1-2-3.

THE Cambridge City Council established rent control in 1970 over the strenuous objections of the real estate industry and large landlords. Nothing in the original policy prevented some 5000 tenants from buying their apartments, however. As the supply of affordable housing dwindled, the Cambridge City Council enacted the Removal Permit Ordinance in 1979, which greatly restricted the ability of new tenants to purchase their apartments.

The supply of rent-controlled apartments in Cambridge has remained relatively stable since then. Rent control has protected an economically diverse community from the ominous specter of gentrification. Without rent control, apartments would be rented and sold to the highest bidder, and poorer city residents would be forced to leave.

THESE economic incentives for the real estate industry to abolish rent control have only increased. The average rent-controlled apartment is valued at $25,000, according to both sides of the 1-2-3 debate; in the free market, these apartments would sell for more than $100,000. Large landowners stand to make millions of dollars, if only Cambridge voters would let them.

So they decided to ask.

Instead of waging war solely at the City Council level, real estate interests decided to sponsor Proposition 1-2-3. By shifting the focus away from rent control, the industry hoped to dupe large numbers of Cambridge residents. And by turning the debate city-wide, landlords planned on capitalizing on its one advantage--access to money for a large-scale campaign.

AT first glance Proposition 1-2-3 does not seem to be an anti-rent control referendum. Its first part allows tenants who have lived in rent-controlled apartments for two years to buy them. The second part exempts owner-occupied units from rent control should the owner move out temporarily. And the third part suggests that extra tax revenue garnered from the sale of rent controlled units should be used to increase the supply of affordable housing.

Proponents of the proposal act as if the issue isn't rent control at all. "Support Choice--Support 1-2-3," read the signs. A flyer from a pro-1-2-3 group asked wrongly, "Did you know that home ownership is illegal in Cambridge?" These and other claims of the campaign have been deceptive.

The proponents' argument is typically neocloassical. By moving towards the free market in housing, supporters of 1-2-3 say all people can gain without anyone losing. Tenants allegedly gain by having the opportunity of home ownership. The city allegedly gains with the increase in tax revenue, as housing units are taxed at market rates. And oh yes, landlords just happen to gain also, to the tune of several million dollars.

The problem with Proposition 1-2-3 is that this theory doesn't mesh with reality. Some tenants gain, but only those who can afford to purchase a $100,000 unit. Those who can't will have a harder time finding an apartment, as owners who want to sell their rent-controlled units at a high price will have increased incentives to rent to the rich. The situation would largely revert to the ominous pre-1979 trends.

Proponents of 1-2-3 counter that owners will offer discounts to tenants, who are the only ones able to buy from them. A landlord would sell a $100,000, unit at $75,000, because under rent control it is only worth $30,000, the theory goes.

Well, most people can't afford $75,000, either. And a study for an anti-1-2-3 group based on previous sales in Cambridge revealed that a more likely price to tenants would be $92,000.

The proposal will adversely affect low-income tenants in another way as well. A reduction in the supply of rent control apartments will force more people to the market of non-rent controlled apartments. More demand there will mean higher rents across the city. No wonder the Cambridge Tenants' Union opposes 1-2-3.

SUPPORTERS of 1-2-3 try to cover up the negative impact of their proposal on the poor by dwelling on proposition 3, which suggests that surplus tax revenue would be used to subsidize rents or build affordable housing. David E. Sullivan, long-time Cambridge City councillor, called this provision a shady appeal to "liberal guilt."

The first problem is that there would not be that much tax revenue. Although newly-bought apartments would be taxed at market value, the home ownership tax exemption would discount the taxable value by about $50,000.

The second flaw with this proposal is that it is entirely unenforceable. The Massachusetts Department of Revenue ruled this summer that the Cambridge City Council would have to grant approval for an affordable housing fund each year as part of the normal funding process. New times and new politicians could easily mean no new affordable housing.

People may feel assuaged by the promise of new construction. But it won't happen unless residents push for it every single year, regardless of Proposition 1-2-3's passage.

Rent subsidies and new affordable housing are worthy causes. There is no reason why they require voting for Proposition 1-2-3.

THERE are problems with rent control that need to be addressed. It is a shame that much of the political debate has focused on Proposition 1-2-3 and not on how to refine rent control or replace it with a fairer system.

Proposition 2--in some form--is one such refinement that merits additional investigation. Now, families who rent out their houses while they go abroad have a hard time reclaiming them when they return--because the rent is controlled. Proposition 2 solves the problem by exempting private home rentals from rent control altogether, but a more equitable arrangement could allow greater flexibility for families who wish to reclaim their homes.

Proposition 2 cannot be supported by itself, however. The initiative should be rejected and the idea considered later.

So far, rent control is the best solution that Cambridge has found to the changing economic times. And to a large extent, rent control has proven effective. Cambridge has kept its diversity. Cambridge is not just another suburb of Boston.

Proposition 1-2-3 reinforces the worst of rent control with only vague promises of a better system. It should be rejected on Tuesday, November 7.