With Rent Control Looming, Investors Say It's Hard To Bet On Boston

Real estate executives are scared that Massachusetts' competitive edge is dulling.

Growing regulatory uncertainty, particularly with the rent control ballot measure coming up in November, is making it harder for investors to set long-term plans in Boston and across the state. 

Large investors said Thursday at Bisnow's Boston Capital Markets and CRE Finance Conference the possibility of rent control, coupled with negative macroeconomic factors like high construction costs, is already creating a ripple effect across the multifamily sector.

"The rent control situation could fundamentally change the game for the multifamily in this market, and it's something that we're keeping an eye on closely here," Marcus Partners Chief Investment Officer Ryan McDonough said at event, held at the Marriott Long Wharf.

"I'm hopeful that something can be reached here prior to November, but it's a real risk."

The statewide ballot measure would cap rent increases across the state to 5% or the consumer price index, whichever is lower. It wouldn’t apply to owner-occupied properties, buildings with four or fewer units, and construction that is less than 10 years old.

The proposal has received support from several housing advocate groups as well as Boston Mayor Michelle Wu. But a group of 12 other mayors across the state said in April they oppose the rent control policy, arguing it would stifle housing development. 

Real estate groups including NAIOP and the Housing for Massachusetts coalition have contributed hundreds of thousands of dollars to fight the rent control measure. A March report from the Tufts University Center for State Policy Analysis projected that the rent control proposal could eliminate $300B in state property values. 

McDonough said the impending threat of rent control, coupled with worsening fundamentals like stagnant population and job growth, is already leading investors to take capital elsewhere.

"I'm one of the most optimistic individuals on our investment committee, and I would say it's even hard for me to make a case for Boston," McDonough said.

PGIM Real Estate Executive Director Brian Saylards said the impacts from the ballot measure have already been chilling, with colleagues sharing plans to halt investment in the state until there is a clearer picture of what the future may look like.

"If you look at what has occurred, just from chatter of rent control, is you see most institutional buyers basically say 'not Boston or Massachusetts,'" Salyards said.

In March, National Real Estate Advisors CEO Jeff Kanne told The Boston Globe that because of Wu's policies, his firm is halting investments in the city — and potentially the entire state if the rent control measure becomes law. 

Those opposed to the rent control measure worry it could limit housing supply moving forward, and development has already been slow due to high interest rates and construction costs. 

Boston has experienced a sharp drop in new multifamily projects constructed, with deliveries decreasing from 2,765 units in Q1 2025 to 1,736 units last quarter, according to Colliers.

"My biggest concern with the bill is it's not going to engender supply," The Davis Cos. President Quentin Reynolds said at the event. "I don't see how it works because real estate is pretty pure about supply and demand. Demand only moves so much, and supply is what really swings the deal."

However, one New York-based investor said rent control may not take as big a toll on housing supply as some Boston players fear. 

"As a New Yorker who's done a lot of New York work, I can tell you that there's only a very thin slice of the buildings that are in the market that would be meaningfully adversely affected," Dansker Capital Group CEO Andrew Dansker said.

Though he said he is opposed to the ballot measure, Dansker said the economic impact from rent control would only be felt in markets where rents are rising faster than the proposed rent cap. In Boston, year-over-year rent growth in the first quarter flattened to 0.3%, marking a nearly five-year low, according to Colliers.

"The economic reality is very limited for a large number of owners," Dansker said. "In the case where you don't have huge population pressure, you don't have tremendous growth in the market, the actual effect on the rents will not be that great."