Massachusetts High Court Blocks Rent Control Ballot Measure

Rent control won't be on the ballot for Massachusetts this year following a stunning ruling Tuesday by the state's highest court.

The decision throws out a ballot petition that, if passed, would have capped annual rent increases across the state at 5% or the consumer price index, whichever is lower. State law today prohibits rent control in any form.

The measure would have exempted certain units, including those in religious facilities. That exemption ran afoul of the Massachusetts Constitution, according to the 27-page opinion written by Justice Frank Gaziano. 

The real estate industry lobbied heavily against the measure, warning that it would reduce affordability in the state by discouraging the development of new housing. The Tufts University Center for State Policy Analysis projected the proposal could eliminate $300B in state property values. 

It was supported by tenant groups, unions and Boston Mayor Michelle Wu, who argued the measure was less than ideal but better than nothing amid a cost-of-living crisis.

The ballot initiative moved forward in November after Homes For All Massachusetts secured more than 124,000 signatures, more than 49,000 more than it needed to qualify for the 2026 ballot. Since then, tenant advocates and the commercial real estate industry have been in a pitched battle over the measure.

“This decision is a massive disappointment after all the work that thousands of volunteers and advocates in every corner of the state put into qualifying our rent control initiative for the ballot, but it’s far from the end of our campaign to protect Massachusetts renters from excessive rent hikes,” Noemi Ramos, chair of the Keep Massachusetts Home campaign that championed the ballot measure, said in a statement.

Housing for Massachusetts, backed by real estate heavyweights NAIOP Massachusetts and the Greater Boston Real Estate Board, aggressively campaigned against the ballot initiative, citing the detrimental impacts it could have on the state's housing sector. 

The group celebrated the decision Tuesday, marking it as a win for not only the commercial real estate industry but also for renters across the state.

“While we firmly believe that Massachusetts voters were prepared to vote ‘no’ in November, today’s decision puts the issue to rest and protects our housing pipeline and our communities from the proven damage that rent control inflicts,” Housing for Massachusetts Chair Conor Yunits said in a statement. 

Large investors in the Massachusetts commercial real estate market, including Marcus Partners, The Davis Cos., The HYM Investment Group and PGIM Real Estate, had gone on the record pushing back on the ballot measure.

“There are some real challenges for all of us that would put the economy of Massachusetts in grave peril,” HYM CEO Tom O'Brien said last week during a Bisnow event, referencing rent control alongside Wu's progressive policies.

In an effort to curb some of the impacts of the proposal, a handful of developers and real estate groups proposed a compromise in June that would instead allow municipalities to opt in to rent control rather than put a blanket requirement on all 351 communities. 

The compromise would have limited annual rent increases to the consumer price index plus 5 percentage points, with a ceiling at 10%.

NAIOP agreed to come to the table for negotiations last week, while the compromise also received support from Gov. Maura Healey, who has come out as a staunch opponent of the rent control proposal.

With the SJC rendering the debate moot for now, developers across the state are breathing a sigh of relief. 

“It’s very encouraging, as we’ve seen clearly that capital partners have been avoiding committing funding to housing construction or even major acquisitions of existing properties in MA while rent control was on the ballot,” City Realty Head of Development Cliff Kensington said in a statement. “We’re hopeful that this news helps open up what had been a pretty paralyzed market so far this year and a lot of stalled projects statewide can get going.”

City Realty is working on a large mixed-use development in Brookline that would include 266 apartments and condominiums along Route 9.

“Thank God — because otherwise — Realty and Development would have been beyond resuscitation for the foreseeable future!” OnyxGroup Development CEO Chanda Smart said in an email.

Some experts cautioned that although the ruling shines a bright light on this year's ballot, it could pose risks down the line if Homes For All Massachusetts were to come back with an updated measure.

Ramos said in her statement that her group plans to tweak its initiative wording and try again, calling the religious exemption of the initiative “easily fixable.”

“Today's events do address the November concerns for multifamily developers, though they were, and remain, concerned about measures coming down the pike in 2027 and beyond,” Geosimulate founder Brendan Carroll said in a statement. “In my opinion, the perceived risk of having their pricing power overridden remains high for many.”