BOSTON (WBZ NewsRadio) — Statewide rent control could be on the ballot in November, but a new study warns the initiative could be detrimental to municipal budgets.

The study from the Greater Boston Real Estate Board and the Tufts Center for State Policy Analysis said that property values across the state would drop by $300 billion over 10 years. The report says the value of a rented building is generally based on how much money the landlord can get from it. If a building loses value, it rakes in less property taxes for the town or city.

Greg Vasil, CEO of the Greater Boston Real Estate Board, said declining property values would force municipalities to either raise property taxes to compensate for a budget hole, or cut services. Cities and towns could see tax hikes of at least 10 percent, and sometimes much more in urban areas.

The report is based on data from two rent control studies, one in Minneapolis from 2021 and another long-term study in Cambridge after rent control ended there in 1995.

According to the study, tax revenues would almost immediately drop 6 to 8 percent across the Commonwealth.

Urban areas and college towns are expected to face the biggest impacts if the measure passes. Vasil said Chelsea, Everett, and Revere would also be particularly hard hit.

“A 10 to 15 percent cut to our tax base would force higher tax rates to those who can least afford it or deep cuts to core city services – unacceptable options for me and the people of Revere,” Revere Mayor Patrick Keefe said in a statement.

Another complicating factor pointed out by Vasil and the report is the current struggles many municipalities are facing with Proposition 2½. That law limits the amount a city or town can raise its taxes each year, which has led to numerous attempts by local governments to pass overrides when they run out of money.

Vasil said the solution to rising housing costs shouldn’t lie in rent control, rather in supply and demand: more housing needs to be built.

“We’re so far behind the eightball in production, can we afford some form of rent control? Because no matter what we do, it’s going to impact our ability to produce,” Vasil said.

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Vasil also argues rent control is a social issue because “it’s a way to sell hope to people.”

“But what is not talked about is when you have a rent control scheme, there’s no mobility. People don’t leave their housing. So, if people don’t leave their housing, and we know we don’t have enough, where do the new people go? There’s no place for them to go. And that’s the problem,” he said.

New Bedford Mayor Jon Mitchell is against the rent control measure, calling it a “self-defeating solution to a complex housing market problem.”

“To lower housing costs, government should facilitate the production of housing units, rather than discourage it by limiting the ability of housing developers to realize a return on their investment,” Mitchell said.

Meantime, city leaders in Boston have been in favor of rent stabilization measures. The Boston City Council adopted a resolution in January in support of the proposed ballot question, citing housing costs as a major concern for Boston residents. Mayor Michelle Wu has also been a longtime proponent of rent stabilization measures.

In response, Keep Massachusetts Home, one of the groups behind ballot initiative, said that rent control is necessary.

“Right now in Massachusetts, rents can legally double overnight — displacing workers and seniors from their communities, forcing people to work multiple jobs just to pay the rent, and making it impossible for young families to save money to achieve the dream of owning a home,” the coalition said in a statement to WBZ NewsRadio.

The group said they consulted both residents and experts in the state. The initiative “will protect tenants from big corporate investors who unreasonably increase rents, while allowing local landlords to earn a reasonable profit and enabling new construction to address housing shortages,” according to the coalition.

The ballot question has until May 5 to pass the measure. If they don't, supporters can gather more signatures in a sprint to the ballot this November.

WBZ NewsRadio's Chaiel Schaffel (@CSchaffelWBZ) reports.

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