On March 3rd, the Somerville Board of Aldermen will hold its hearing on the proposed Condo Conversion Ordinance. If you are a Somerville homeowner, you know that the Libertarian, Cambridge-based Small Property Owners Association (SPOA) — which mailed letters to every Somerville homeowner — is seeking to derail that legislation by disseminating inflammatory and baseless claims about how passage will result in plummeting property values and escalating property taxes.
Supporters of the legislation, including Mayor Curtatone and the staff at OSPCD, are hoping that dissemination of accurate information will overcome SPOA’s campaign of fear, and inspire the Board of Aldermen to pass the legislation. But facts alone won’t win the battle if Aldermen don’t hear from constituents who support the proposed legislation. Please call or email your Ward Alderman AND the four At-Large Aldermen BEFORE the March 3 hearing date (contact info at the end of this posting). A simple statement of support will suffice. And if you can, please come to the hearing to show your support.
When his initial effort to update the Condo Ordinance was sandbagged by a SPOA campaign disingenuously labeling the legislation as “back door rent control,” Mayor Curtatone tapped Alderman Rebekah Gewirtz to chair a committee consisting of two advocates for property owners, two tenant advocates, and relevant City staff, that was charged with finding common ground. The proposed ordinance is the product of 12+ months of work by that committee, with subsequent refinements informed by feedback from attendees at City-sponsored public meetings.
· City Website: To download a copy of the proposed ordinance, a City-produced PowerPoint presentation highlighting key features and answering questions about the Ordinance, and a chart comparing the proposed Ordinance to the City’s existing Ordinance, to the proposal filed by Mayor Curtatone a couple of years ago, and to relevant State law, go to www.somervillema.gov/spotlight.cfm?id=72.
· SCAT Interview: A little while ago, I interviewed Cambridge and Somerville Legal Services (CASLS) lawyer Ellen Shachter, a fellow member of the Affordable Housing Organizing Committee (AHOC), and a fellow participant on the Committee that drafted the proposed legislation. View the interview at www.blip.tv/file/1459794.
· Responding to SPOA: SPOA’s claims need to be answered. Here are my attempts at providing those answers:
(1) We already have a Condo Conversion Ordinance; why do we need a new one?
Somerville’s existing ordinance is outdated and difficult-to-enforce. It was never updated to achieve consistency with State legislation that prohibited communities from regulating the removal of rental units from the markets, but that allowed communities to protect the tenants in those units, and that established baseline tenant protections that apply in the absence of local laws. Because Somerville has its own ordinance, State protections don’t apply to Somerville tenants. Because the City’s ordinance was never updated to parallel State law, there has been a reluctance to hold property owners accountable for adhering to its provisions. In the absence of an enforceable standard, an untold number of tenants have been displaced without adequate opportunity and support for finding alternate housing in Somerville.
(2) Why don’t we just repeal Somerville’s ordinance and rely on the protections in State law?
Somerville’s ordinance has two key provisions that are absent in State law: (1) it protects tenants in buildings with fewer than four apartments, and (2) it provides for a local Condo Review Board to ensure that the law is followed.
If the Board of Aldermen were to simply repeal Somerville’s existing ordinance, Somerville tenants in 68% of the City’s housing stock — 2 family and 3 family buildings — would lose all protections. The remaining tenants — in buildings with four or more units — would have only one recourse if their landlords violated State law: going to Court to assert their right to the required notice period or relocation assistance. Many tenants don’t even know that State law affords them those rights…
(3) Does the proposed ordinance increase the burden on small property owners and landlords?
No. Just the opposite: the proposed ordinance actually reduces the burden on small property owners by reducing the required notice period by 50-75%, by eliminating the current restriction against rent increases during the notice period, and by simplifying the conversion approval process.
Under the proposed ordinance, some small property owners would be required to make slightly higher relocation payments, while others would incur slightly lower costs. The proposed ordinance requires payments of $2,000 to elders, people with disabilities, and low/moderate income tenants and $1,000 to other tenants, as compared with the current ordinance which requires a payment equal to one month’s rent or $300, whichever is larger. (When was the last time you heard of $300/month rent?) Based on HUD Fair Market Rents, relocation payments under the current ordinance might be expected to range from $1,146 for tenants in 1BR units to $1,609 for tenants in 3BR apartments, not much different than the $1-2,000 relocation payments called for in the proposed ordinance.
(4) Will passage of the proposed ordinance reduce property values and raise property taxes in Somerville?
No. The two most important determinants of property taxes in Somerville are the amount of State Aid (also known as “Local Aid”) and the Prop 2½ cap constraining the City’s ability to make up revenue shortfalls caused by, for example, cuts in State Aid. Holding owners of buildings with four or more units to the same standards that apply to the rest of the State will not depress property values or lead to elevated property taxes. For example, until the current economic downturn — which has dampened real estate prices everywhere — Boston buildings with four or more units experienced annual increases in value, notwithstanding that City’s even stiffer requirements on developers converting rentals to condominiums.
Similarly, there is no reason to believe that a six month notice requirement and modest relocation fees will have any impact at all on property values or property taxes on two- and three-unit dwellings in Somerville. Compared to the bank fees and legal fees and realtor fees associated with conversion, the relocation payments are extremely modest. And the six month notice period is too short to cause much if any delay in most condo conversions. In short, there is nothing in the proposed law that will inhibit owners from converting rental properties to condominiums, and therefore nothing in the proposed law which will lower property values.
(5) Is the current economic downturn the wrong time to pass this kind of legislation?
No. Free-market purists have made the same argument when it comes to regulating Wall Street. They say “now is the wrong time to impose or tighten enforcement of regulations.” Of course, from a Libertarians perspective, there is no right time. In fact, however, now is a perfect time to fix a broken system, before the market heats up, and before more tenants are needlessly denied the time and relocation assistance that could help them stay in Somerville.
(6) Inaction is always the safest political course of action. Why should the Board of Aldermen vote to enact the proposed Ordinance?
Doing nothing leaves Somerville tenants without real protections, and leaves Somerville property owners with ambiguous ground rules for condo conversion.
· Enacting the proposed legislation would give tenants in buildings with four or more units the protections available under State law, plus the benefit of administrative oversight by a Condo Review Board operating under an enforceable Ordinance. For real estate developers who purchase and convert properties with four or more units, the proposed 1-2 year notice period and $2-4,000 relocation fee would constitute a relatively small cost of doing business, compared to returns from condo conversion, and compared to the fees routinely charged by banks, lawyers, and real estate intermediaries. (Like State law, the longer notice period and higher fees would apply to elderly, disabled, and low/moderate income tenants, and shorter notice period and lower fee would apply to other tenants.)
· Enacting the proposed legislation would give tenants in buildings with two or three units — 68% of all Somerville housing — more modest, but enforceable, protections (six months notice and $1-2,000 in relocation assistance, again depending on whether the tenant qualifies as elderly, disabled, or low/moderate income), and the benefits of administrative oversight by the aforementioned Condo Review Board, while streamlining the conversion approval process and reducing the overall obligation of small property owners, as compared with the existing Somerville ordinance.
Contact Info for Aldermen
Alderman At Large – Jack Connolly, Vice President of the BOA — 617-628-1076 or AldermanConnolly@gmail.com
Alderman at Large Bruce Desmond — 617-666-1757 or BruceMDesmond@yahoo.com
Alderman at Large Dennis Sullivan — 617-628-1857 or AldermanSullivan@aol.com
Alderman at Large Bill White — 617-625-9110 or email@example.com
Ward 1 – Bill Roche — 617-623-6661 or firstname.lastname@example.org
Ward 2 – Maryann Heuston — 617-492-5331 or email@example.com
Ward 3 – Tom Taylor — 617-776-1618 or TFTAld32@aol.com
Ward 4 – Walter Pero, President of the BOA — 617-628-0137 or firstname.lastname@example.org
Ward 5 – Sean O’Donovan — 617-776-6456 or email@example.com
Ward 6 – Rebekah Gewirtz — 617-718-0792 or rebekah@RCN.com
Ward 7 – Bob Trane — 617-623-5767 or RobertTrane@aol.com