Heading to Court

The latest attack on Cambridge's rent control regulations has come from an organization of small property owners. They want to challenge the constitutionality of the system in the U.S. Supreme Court.

Cambridge's 22-year-old, ever-controversial rent control system is under attack again.

This time, a relatively new player in the city's rent control politics, the Small Property Owners Association (SPOA), is threatening to scrap the system through the courts, vowing to take the fight to the U.S. Supreme Court, if necessary.

The lawsuit is the latest--and possibly the broadest--challenge in the seemingly endless series of political and legal attacks on Cambridge's system, and reflects a tide of decontrol slowly sweeping rent regulating communities across the state and nation.

The suit also reflects the growing political and financial clout small landlords hold in the city and thier hope that the current U.S. Supreme Court will look more favorably upon their cause than past Supreme Courts.

Of course, rent control advocates call the suit a "grab bag" of landlord gripes, saying that the fight has been fought before, and that the landlords lost.

An Issue of Rights

On Jan. 3, John H. Natale, the 12-year owner of a four-unit, rent-controlled Cambridge townhouse, walked into Middlesex Superior Court and dropped off the lawsuit--the result of more than a year of planning and fundraising--against Cambridge and its rent control system. The plaintiffs in the case--SPOA and several individual landlords--are charging the system with nine counts of violating landlords' property rights.

"You want to know what rent control is?" Natale asks. "It's blatant theft masquerading as benevolent humanitarianism."

"It's stealing from me. It's affecting my standard of living, what kind of car I drive, whether my daughter can get piano lessons. Rent control is evil. I want to abolish it. I want to kill it."

The suit charges that there is no longer any public need for rent regulation and that the system--considered one of the most restrictive in the country--unfairly takes control of landlords' property by not allowing them to leave their buildings vacant or destroy or convert them into condominiums. The suit charges that the city does not compensate landlords for their loss of rights, in effect forcing them to pay for much of the city's affordable housing program.

The suit asks the court to declare the system as it stands unconstitutional, to make major changes to it to make high rent increases easier to obtain, to allow landlords to destroy or convert their rent-controlled buildings, and to order Cambridge to repay landlords the rents they lost unfairly, their court costs plus all interest.

"I think that this is probably the most comprehensive attack on the system," says Denise Jillson, co-chair of SPOA and the owner of a four-unit rent-controlled building.

One Attack Among Many

But ever since Cambridge--following a nationwide movement towards anti-inflation rent regulations--enacted rent control in 1970, the system has been attacked incessantly through the political and legal process.

The first directors of the rent control board weakened the system from within--one of them declared that all rents would be set at the market rates--until tenant and student activists ousted them and tightened the system.

And within its first year, rent control, which has evolved into Cambridge's political litmus test, was repealed by a lame duck city council in a stormy public meeting. Days later, when the new council took office, the system was reenacted, and pro-rent control candidates managed to hold five of the council's nine seats throughout the 1970s and 1980s. Since 1989, six of the councillors have been prorent control.

In 1989, rent control faced one of its toughest political challenges, when the city voted on Proposition 1-2-3, a referendum that would have allowed owners of rent-controlled units to sell the units to their tenants. Critics argued that the regulation would deplete the supply of affordable housing, and the proposition was defeated in a bitter election.

In its modern form, Cambridge's rent control laws applies to all units built before 1970, and restricts rents to those charged in 1967, plus inflation and some allowance for certain expenses. Landlords charge that there are interminable delays in getting rent increases and that many expenses, such as loan interest, may not be passed on to the tenant. All owner-occupied buildings that have three units or fewer are exempt.

Numerous legal challenges against rent control around the country have been mounted in the past, mostly by large developers and property owners. Some of the suits against specific provisions of specific systems have been successful, but many of the broader-based attacks have not.

In 1988, the Supreme Court voted, 6-2, to uphold San Jose's 1979 rent control law. At that time, Justice William H. Rehnquist argued that states must be able to regulate "the economic relationship of landlords and tenants...We see no need to reconsider the constitutionality of rent control per se."

And a Cambridge case involving a Fresh Pond developer was dismissed by the Supreme Court in the early 1980s, in effect upholding a Massachusetts Supreme Judicial Court ruling in favor of the Cambridge Rent Control Board.

Because of this history, many rent-control activists say that much of the suit is frivolous.

"This is a grab bag of various items, some of which have already been litigated extensively in the state courts," says Mike Turk, co-chair of the Cambridge Tenants Union, an organization that has often found itself at odds with SPOA.

Nevertheless, Natale and SPOA remain optimistic about their chances in court.

Cambridge's rent control system, Natale says, has never been argued on its merits in the Supreme Court. And other rent control systems may be constitutional, but Cambridge's restrictive system is not, he asserts.

"Our system in Cambridge is the harshest, most blatant, anti-owner rent control system there is. We believe it will be the easiest to bring down."

And, he argues, there are enough conservative new faces on the Supreme Court today to overturn past decisions.

"I just can't wait to get to the Supreme Court," he says.

A Different Sort of Suit

Natale, who is SPOA's legal defense fund coordinator, is not the only SPOA member excited about the lawsuit.

At a recent SPOA meeting, the lawsuit was on every landlord's lips, and it seemed as if all the landlords had different opinions on just how to move ahead with the suit.

The suit reflects SPOA's growing grassroots political power: the suit is very much the product of a team effort from middle and lower-income individuals. For more than a year, SPOA steering committee members have been campaigning for small contributions and a $20 membership fee from each member of SPOA. Natale, Jillson and others have met with lawyers and professors, and broad strategies have been mapped out across kitchen tables and in 50-person public debates.

So far, Jillson says, the group has raised $57,000 towards paying for legal fees. She estimates the group will need at least $100,000 to pay for lawyers for a three-year battle to the Supreme Court. The group will approach some of Cambridge's larger landlords for contributions soon, she says.

Over the past five years, the group has grown from a handful of disgruntled landlords to a militant political and educational organization with a membership between 1500 and 2000, Jillson says, adding that the group "grows larger every day."

"We would have preferred not to go this route because it's expensive, it's risky," she says of the suit, which is SPOA's most ambitious attack on the system yet. "Most of us operate with a negative cash flow."

"This would have never happened had the city been willing to make reforms. It's that kind of absurdity that led us to this," she says. "Now that this suit is filed hopefully they'll realize we are credible and we are determined."

The lawsuit is the latest-and possibly the broadest-challenge in the seemingly endless series of political and legal attacks on Cambridge's system. It reflects a tide of decontrol slowly sweeping rent regulating communities across the state and nation.