Rent Board Stalls on Craigie Arms
Postpones Decision to Remove Harvard Property From Rent Control
Rent Control Board member Sally Ackerman summed up the tension in Cambridge real estate when she said last week, "life on the board is compromising."
For this reason it can also be frustrating--for board members, tenants, and landlords alike. Last Wednesday's six hour meeting was no exception, when the board again postponed a final decision on a Harvard request to remove one of its properties from rent control.
Harvard Real Estate (HRE), through its developers, Housing Associates, has requested permission to raise rent beyond legal levels to rehabilitate the Craigie Arms apartments. If the board grants the necessary removal permit. Harvard would be the first beneficiary of Cambridge's "distressed building policy," designed to encourage landlords to put deteriorated property back on the housing market.
Tenant groups and some board members have questioned the propriety of classifying a property as distressed when its owner can afford the renovations, though.
Since HRE is one of the wealthiest landowners in the area, opponents of the removal permit believe the company could pay for the renovations without raising rent in the building.
The case hinges on whether the renovations are needed to comply with local ordinances, or whether they have become necessary because of neglect of the property by Harvard.
Craigie Arms--a group of five buildings around a courtyard--will be vacant on May 1, when its last remaining occupant is scheduled to move out. Many tenants left after receiving cash settlements or alternative housing from HRE.
"The availability of that capital would take it [Craigie Arms] out of the realm of 'distressed'," said Ackerman last Wednesday.
She requested to see the Harvard Corporation's annual financial report (specifically its mortgage portfolio) in order to determine its ability to do the job without a removal permit.
But there are serious doubts as to what new information on the three-year-old case could add to the issues. Several members expressed a desire to vote on Wednesday, but agreed to Ackerman's request in the board's usual compromise spirit.
self-financing would mean no subsidized, low-income housing," said Alfred B. Cohn '46.
The current HRE proposal for renovations, which would be partially financed by the Massachusetts Housing Finance Agency (MHFA), adds 50 units to the tight Cambridge housing market. Thirty percent, or 15 units, of those would be subsidized for low and moderate income Cantabrigians as required by the MHFA.
A delay by the Rent Board beyond June, however, could cause the MHFA to renege on its offer, according to developer Robert H. Kuchn. Jr.
If further consideration could answer some crucial questions though, it might be worth the wait. The Board's decision on this case could have important implications for the distressed building policy and more importantly, the future of Cambridge's 14 year old rent control.
Even neutral Rent Control Board Executive Director Roger Mervis conceded last week that tenants, through their lobbying group the Cambridge Rent Control Coalition, view a vote for HRE as "a paradigm for all the ills and shortcomings of the rent control policy."
Tenants argued that the board's decision to grant the removal permit should hinge on the issue of intentional owner neglect. The distressed building provision contains a section which does not allow removal permits in cases where the "owner neglected reasonable maintenance and repair of the building to escape from rent control."
In a March 23 report to the board, a hearing examiner stated the "escape from rent control was at least a factor in the owner's decision-making process," in the Craigie Arms case.
"The policy was specifically implemented to prevent landlords from neglecting duties. We should deny removal permits on that basis alone," said Cecelia Josephson at the heated Wednesday meeting.
But at least three of the five board members disagreed that the 85 year old building's present deterioration is due to intentional neglect on HRE's part.
Board Chairman. Acheson M. Callahan, pointed out that before late 1982, when removal permits became a possibility. Harvard had no incentive for neglecting maintenance.
"It's very hard to see why they would choose to neglect it," added Cohn, who is one of two board members nominated by landlords' groups. The tenants also nominate two of the five members who are appointed by the city manager.
Yet another contention centered around a discrepancy between the cost estimates of the hearing examiner and the Community Development Department, which approached the developers' projected $1.5 million price tag.
The hearing examiner, an RCB employee, put the costs for bringing the building up to state building codes at only $351.715. But he also said that "desirable" gut rehabilitation would cost $1.3 million, nearly as much as the department's estimate.
Michael H. Turk, spokesman for the tenant coalition, said that the city should not allow Harvard to turn Craigie Arms into "luxury" housing.