EASTIE Watch

Rent control: Still a bad idea

Like Charlestown, the future of Eastie depends on more condo units and a better stock of restored one- and two-family homes, but if some city councilors get their way with a new rent control proposal, Eastie’s bright future may fizzle before it ever has a chance to shine.
The market, not the government, should always dictate how much homeowners can charge for rentals. Historically, as the interests rates climb, there are more people looking for rental units; and as interest rates plummet, there are less people looking for rental units. Rent always tends to even itself out without the help of the government or rent control.
Take, for example, two years ago when the interest rates on buying new multi-family home hovered between 6.5 and 7 percent. In Eastie, homeowners of multi-family properties were getting between $900 and $1,000 a month  rent for one- bedroom units. Today, with the interest rates between 5 and 5.5 percent, homeowners are lucky to get between $700 and $800 for a one-bedroom unit.
Why?
As interest rates plummet, more people who would otherwise rent realize they can afford paying a mortgage of $1,200 to $1,800 on a reasonably priced condo or multi-family income property.  For example, a mortgage on a two-family house that cost $300,000 is $1,500 per month at 5 percent. It’s easy for someone to realize, “Hey, instead of putting my hard-earned dollars towards something I’ll never own, I’ll buy a two-family, charge $800 a month for one unit and live for $700 a month in the other unit.”
But when the interest rates creep back up to 6.5 or 7 percent, that same person might ask themselves, “Wait a minute. I don’t know if I can swing a $2,100 a month mortgage, even if charge $1,000 a month for my unit. I’m probably better off staying in my apartment for $950 a month.”
And the world of homeownership and renting goes around. It’s a basic study of supply and demand. As more people can afford to buy homes at low interest rates, the fewer renters there are out there and as less people can afford to buy homes, the more renters are out there looking for apartments.
But that’s only half of the argument.
The biggest mistake advocates for rent control make is treating privately owned, operated and developed rental housing as if it were a “public utility”. By doing this, advocates are not only trying to harm the housing providers, but also, in the long run, the consumers they intend to serve.
There are plenty of studies that prove two things about rents as an essential part of the efficient operation of housing markets.
First, rental payments compensate providers of existing housing units and developers of new units for the cost of providing shelter to consumers.
Second, rents provide the economic incentives needed to attract new investment in rental housing, as well as to maintain existing housing stock.
Like we mentioned earlier, it’s supply and demand, and housing is no different from other commodities, such as food and clothing -- the amount producers supply is directly related to the prevailing market price.
This second function of rent is crucial to Eastie becoming the next South End or Charlestown and evaluating the economic impact of rent control in our neighborhood.
According to a study by the Nation Multi-Housing Council (NMHC) in an unregulated market, a housing shortage -- the reason usually cited for imposing rent control -- will be addressed in a two-step process. In the short-term, rents on the margin will rise as consumers compete for available units. Over time, these higher rents will encourage new investment in rental housing  through new construction, rehabilitation, and conversion of buildings from nonresidential to residential use, until the shortage of housing has been eliminated. Without the increased rents required to attract new investment, new housing construction would be sharply limited, and there would be no long-term solution to the housing shortage. Conversely, a fall in rents sends the message to the market that there is no room for new investments.
With all eyes on Eastie as the next place to buy a home, develop or invest, this could have a devastating impact on a neighborhood that many believe is on the cusp of greatness.

EBMS volunteer Paul Koch honored by mayor

Mayor Thomas M. Menino presented Paul Koch with an award at the Boston Main Streets 12th Annual Awards Ceremony, which took place at the Greater Boston YMCA on Huntington Avenue last week.  Koch was one of several award recipients presented to the 2007 Boston Main Streets Volunteers of the Year and Businesses of the Year.
In 2007, Koch and hundreds of Main Streets volunteers gave more that 16,000 hours of their time. Since the start of the program in 1995, over 165,634 hours of volunteer time have been contributed to Main Streets efforts. 
“Boston Main Streets has had tremendous success in helping to revitalize our neighborhood commercial districts, and there are many people here tonight to thank for all their hard work in helping us make that possible,” said Mayor Menino at the ceremony. “This event is special because we get to honor the people in the neighborhoods who are making our local commercial districts vibrant and welcoming places to shop and do business. I’m proud of the work they do.”
Developed out of a partnership between the City of Boston and the National Trust for Historic Preservation, the Boston Main Streets initiative was created by Mayor Menino in 1995 as the first urban, multi-district Main Streets program in the nation, with the goal of establishing thriving commercial districts throughout the city.  Named by the Pew Partnership for Civic Change as one of 19 “Solutions for America,” Boston Main Streets continues to empower individuals in both the small business sector and residents to have a direct role in the economic health, physical appearance, and development of their own community.
Today, Boston Main Streets provides funding and technical assistance to 19 neighborhood-based Main Streets districts throughout the City of Boston and has served as a national model to urban areas seeking to revitalize neighborhood commercial districts including Baltimore, Washington, D.C., Milwaukee, Detroit, and New Orleans.
In 2005, Boston created the Boston Main Streets Foundation, a nonprofit organization established to produce significant advances in business development, jobs creation, storefront improvements, and overall quality of life in Boston’s neighborhood commercial districts.

Maverick Gate

The Maverick Street gate in now operational. Now, only East Boston residents who possess a Massport-issued key card will have access to and from Logan Airport through the Maverick Street Gate. The gate will keep nearly all airport and Ted Williams Tunnel traffic off Jeffries Point and Gove neighborhood streets.
East Boston residents can obtain an application for an access card by calling Massport’s Maverick Street Gate Message Center at 617-568-3718, or by visiting  http://www.massport.com/about/publi.html. The application process, which mirrors the requirements of the City of Boston’s resident parking program, requires that individuals provide proof of residency in East Boston. Applicants must submit copies of a current Massachusetts’ RMV (Registry of Motor Vehicles) registration showing that their automobile is registered, and principally garaged in East Boston, and a recent utility or phone bill with the same East Boston address as the motor vehicle registration. Residents can apply for one card for each automobile owned. Emergency vehicles will have unrestricted access to the Maverick Street Gate.