Mass. rent control proposal threatens municipal budgets

A proposed Massachusetts ballot question aimed at capping annual rent increases could trigger significant financial setbacks for cities and towns across the state, according to a new study released Thursday.

Study projects billions in lost property tax revenue

The Greater Boston Real Estate Board and the Center for State Policy Analysis at Tufts University examined the potential fallout from the 2026 ballot initiative, finding it could cost Massachusetts billions in lost property tax revenue. “Every town will see an impact,” stated Evan Horowitz, executive director of the Tufts center, in comments to CBS News Boston. Municipalities would face difficult choices: reduced spending on essential services like police, fire departments, parks, and snow removal, or increased property taxes.

The ballot question would limit annual rent hikes to five percent, with owner-occupied buildings containing four or fewer units and newly constructed properties exempt for the first ten years. Carolyn Chou, executive director of Homes for All Massachusetts, argues that this measure will strengthen communities by preventing exorbitant rent increases.

However, Massachusetts Governor Maura Healey opposes the rent control proposal, asserting that it would stifle housing production. “Rent control, as proposed in that ballot question, has already halted housing production in our state,” Healey said Wednesday. Stephen MacLeod of the Boston Business Journal noted that while some cities with strict rent control have seen construction slow and property values decline, those trends often reverse with exemptions for new construction—a feature included in this specific proposal.

Supporters must gather enough signatures by the July deadline to place the rent control question on the November ballot. The potential fiscal ramifications for local governments represent a significant challenge, regardless of the outcome.