A small handfull of wealthy people own the buildings affected by HB2113. Owners of HUD and MHFA housing are primarily large corporate entities or wealthy individuals, made rich due to taxpayer largesse. Six corporations or individuals own or control over 50% of of the HUD-subsidized "expiring use" stock nationally; nine own or control over half the "expiring use" buildings in Massachusetts. Partnerships controlled by these owners generally receive rental income from hundreds to thousands of subsidized units.

Owners of these developments have made huge taxpayer-financed windfall profits. Owners of "expiring use" buildings have already made huge windfall profits from these buildings, starting with the taxpayer-financed sale of real estate tax shelters 20 years ago. Since then, taxpayers have lavished them with risk-free, federally insured and subsidized 40 year mortgages; Section 8 subsidy contracts; and guaranteed management fees and profits over the past 20 years In contrast to these heavy investments by taxpayers, the owners typically put up very little of their own equity to build these buildings. In the absence of HB 2113, these greedy few stand to make millions more in a second windfall profit at the expense of tenants and taxpayers alike.

For example, Simeon Bruner, the wealthy Cambridge architect whose partnership prepaid the mortage at the Piano Factory, initially invested $50 -- he now stands to make a profit of $7 million by refinancing the building at higher market rents! The taxpaying public has a right to demand a return on the equity we have invested in affordable housing by keeping it that way!

Landlord propaganda is false and dangerous. Landlord propagandists have recently alleged that federal law provides permanent protection for elderly and disabled tenants and requires phase in of rent increases over three years and. This is false and dangerously misleading to tenants. The federal Title VI program never provided permanent protection for elderly and disabled tenants if owners prepaid. A provision for three-year phase in of rent increases in the event of prepayment was repealed by Congress last year. Only passage of HB2113 would provide the kinds of protections these landlord advocates claim to support. Cost-effective way for Boston to address affordable housing crisis: Congress is preparing to send an "unfunded mandate" to states and cities across the country: house your poor, but do it with less federal assistance. This, with the recent loss of thousands of of affordable apartments on Boston's private market, will result in a severe shortage of housing for Boston's elderly; disabled; and low-income residents. Passing of HB 2113 would be an efficient way for Boston to preserve thousands of apartments--at little cost to the city and none to the Commonwealth.

HB 2113 is not preempted by federal law. The federal Title VI statute preempts local controls which apply exclusively to buildings formerly eligible for the federal Title VI program (Section 221(d)(3) and 236 only). It does not preempt laws of "general applicability", which include Title VI buildings but apply to a broader class, such as "governmentally-involved" housing. HUD's Office of General Counsel has already determined that Boston's 1988 ordinance governing "governmentally-involved" housing, on which HB2113 is based, is a law of general applicability which is not preempted by Title VI.