Today’s edition sponsored by: JPI, Authentic, Foxen, TeleCloud and Robora.
Gone for now, but back soon?
For rental housing operators and advocates, the biggest election fight of 2026 just abruptly ended in a rather unexpected way. The Massachusetts Supreme Judicial Court shot down a planned November ballot measure today. Not because rent control is bad, which it is. But because of one tiny detail in the ballot measure carving out an exemption for religious institutions.
“The proposal limits annual rent increases for residences, but it carved out exemptions for several types of units, including ones ‘operated solely for … religious … purposes.’ As a result, the court said it concluded the petition ‘relates to religion, religious practices or religious institutions,’ which the state Constitution does not allow to go before voters.”
WBUR reporting
The proposal had been expected to end up on the state’s November 2026 ballot. And it was a particularly draconian version of rent control (vacancy control) — the flavor that famed socialist economist Assar Lindbeck called “the most efficient technique presently known to destroy a city—except for bombing.” The proposal would have capped rent increases at the greater of CPI or 5% for renewals AND new leases.
The stage appeared set for the biggest rent control ballot fight since 2024, when California voters shot down Prop 33, which would have expanded rent control across the state. And then it all ended with a court ruling today. Or temporarily ended, I should say.
Look for rent control advocates to regroup
Apartment development has been essentially frozen since earlier this year, when it appeared likely the ballot measure was gaining steam. Even the state’s Democratic governor noted the construction shutdown, and urged voters to reject the ballot measure. Developers have kept sites warm (as suburban Boston, in particular, remains favored by capital due to strong demand drivers and undersupply) while waiting out the vote.
But the court ruling is unlikely to unfreeze all that development capital. Why? Because it’s based only on a technicality, leaving rent control advocates ample room to regroup and run it back.
As St. Paul, MN, showed us: Once you hop on the crazy train, it’s really hard to hop off. St. Paul passed a similarly draconian flavor of rent control, and has since tried to unwind it, but has been unable to convince development capital of its sincerity.
Compromises make us feel good, but can backfire
There are also efforts behind the scenes to organize a compromise, possibly modeled after Oregon’s rent control laws, which cap rents at CPI plus 7% and only for renewals, not new leases. Deal seekers favor a compromise, and compromises in theory can be good, but it’s worth a reminder that not all compromises are productive. In fact, a recent research paper makes the case that compromises are the “easier but suboptimal path most often taken.”
Why would this apply here? Because of the slippery slope effect. In Oregon, for example, lawmakers have already re-written the rules to apply a hard cap (even if still workable today, it shows the slippery slope effect already in motion), and there are numerous other proposals to further tighten rent control — including one that would let each city set its own rules. And in New York, the city even has a word for tightening rent control rules. They call it “recapture,” and they’ve done it at least four times in its history. To “recapture” means to apply rent control (or some flavor of it) to buildings previously exempted from it, simply rebranding it under better-sounding terms like “rent stabilization” and “good cause eviction.”
“A really bad way of coming to agreement is compromise. We’re in a room and I could say, “How tall do you think this ceiling is?” You’d be like, “I don’t know, Jeff. Maybe 12 feet tall.” And I would say, “I think it’s 11 feet tall.” And then we’d say, “You know what? Let’s just call it 11 and a half feet.”
That’s compromise, instead of the right thing to do: get a tape measure. But getting that tape measure, and figuring out how to get to the top of the ceiling… that requires energy. The advantage of compromise as a resolution mechanism is that it’s low-energy. But it doesn’t lead to truth.
When truth is a knowable thing, you shouldn’t allow compromise to be used when you can know the truth.”
– Jeff Bezos, as quoted in Inc.
It’s worth a reminder, rent control has been proven to backfire on the very people it’s intended to protect. As the Freakonomics podcast concluded: Academic economists “think that’s a terrible idea. They say it helps a small (albeit noisy) group of renters, but keeps overall rents artificially high by disincentivizing new construction.”
— My Latest Posts on LinkedIn —
Here are some recent posts if you missed them:
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If your city makes rent payment essentially optional, don’t be surprised when collections drop off even for non-profit affordable housing.
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Wage growth topped rent growth for 41 straight months and counting, bringing rent-to-income ratios back to pre-pandemic levels.
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We have a deal: The Senate and House come to terms on the ROAD to Housing Act. Here’s what it means for SFR and BTR.
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If your city’s policies embrace housing developers yet demonize housing operators, you’re pushing a bait-and-switch strategy that development capital will see through … and you won’t build the housing you claim to support.
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Spring leasing numbers show signs of momentum.
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A new research paper from the Minneapolis Fed shows rent control has been a disaster for St. Paul, shifting a larger share of the tax burden onto homeowners.
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A newly published hit piece on LIHTC affordable housing reads like an unchecked airing of grievances, and misses the mark on an important topic.
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What are the common denominators for apartment projects still breaking ground? Here are the big six.
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Apartment debt originations in Q1’26 came in as the second-largest Q1 on record.
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Even The New York Times editorial board is coming out against rent control.
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While apartment ownership remains as fragmented as ever, the management business is becoming more consolidated.
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New “research” on the role of private equity grossly underestimates the role of private equity, and grossly overstates the implications.
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AvalonBay and Equity Residential are merging. That’s big news, but it also means it’s an uneasy time to be working at AVB or EQR.
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The New York Times tell us that rent is “swallowing up” income, but the reality is a lot more nuanced.
— Now Spinning on The Rent Roll Podcast —
For 2025, The Rent Roll with Jay Parsons podcast ranked in Spotify’s top 2% of podcasts for minutes played and in the top 1% for most shared shows. Additionally, The Rent Roll continues to frequently rank on Apple’s charts for investing-themed podcasts, and was recently ranked as the third-best podcast in all commercial real estate (and #1 in housing) by the readers of CRE Daily!
Thank you to everyone who’s made The Rent Roll part of your weekly routine! New episodes are released every Thursday morning.
Find us on YouTube, Spotify, Apple and Amazon. Recent episodes:
Episode 89: Inside UDR Apartment REIT with UDR’s Dave Bragg
Episode 88: The “Other” Berkshire with Berkshire’s Alan King
Episode 87: Preferred Equity, Debt & Anything But Common Equity with Marble Capital’s David Oelfke
Episode 86: In-House vs. Third-Party Management with Lantower Residential’s Emily Watson
Episode 85: What Still Pencils Out to Build? + The Art of Placemaking with Kane Realty’s Rob Reid
Episode 84: 4 Takeaways from Q1’26 SFR REITs Earnings Calls with Zelman’s Jesse Lederman
Episode 83: 6 Takeaways from Q1’26 Apartment REITs Earnings Calls with Piper Sandler’s Alexander Goldfarb
Episode 82: Spring Leasing + PropTech Update with 20 for 20’s Dom Beveridge
