Housing hassle tests Flynn's mettle

THE word ''crisis,'' although overworked, is still the best way to sum up the housing crunch in Boston, says Jim Jordan, an aide to Mayor Raymond L. Flynn. Everyone - the mayor, city councilors, tenant organizations, realtors, and developers - agrees the apartment shortage has reached crisis proportions. And all agree the city needs to revise its laws to address the problem.

But the accord hits a sour note when the discussion turns to Mayor Flynn's housing package.

''If a (City Council) vote were taken today - up or down on the mayor's entire package - I'd say that it's in trouble, that it wouldn't pass,'' says Councilor Michael J. McCormack.

But Flynn has until the first week of October, when a vote is expected, to change some minds. Between now and then, the City Council's Committee on Housing will hold public hearings on the mayor's plan as well as on housing initiatives introduced by councilors.

Much of the dissonance surrounding the mayor's 10-part package centers on one ordinance. Among other things, it would institute citywide rent control and enable the city to regulate the number of apartments that are converted to condominiums.

Those who oppose the ordinance say it will make the housing shortage worse, not better.

''Rent control basically causes disinvestment,'' says Michael Rotenberg, president of the Rental Housing Association of the Greater Boston Real Estate Board. ''It starts with little things. They (landlords) don't paint the window frames or the hallways.'' Eventually, if landlords begin to lose money on their properties, the buildings fall into disrepair or are abandoned, he says.

Many of the Rental Housing Association's 600 members also oppose the mayor's proposal for condominium conversion because it ''would be a virtual ban,'' he says.

Proponents, on the other hand, say the overriding need is to protect tenants from effects of the housing shortage: skyrocketing rents and eviction because of condominium conversion.

The long-range solution is for Boston to ''work to build more housing units . . . , but strong rent control and condo-conversion regulations are needed in the meantime,'' says Lewis Finfer of the Massachusetts Tenants Organization.

Indeed, Bostonians pay the highest rents in the nation, according to a survey released in January by the National Association of Realtors' Institute of Real Estate Management. The 40-city survey said a midpriced unit in Boston cost $475 a month in 1982, an increase of 17.6 percent from the year before. (Nationally, the median rent rose 10.4 percent that year, according to the study.)

The rate of increase has not slowed very much, according to a new report compiled for the mayor by an independent housing consultant. The report states that the median rent for the first three months of this year could be as high as same period in 1983.

The problem is that renters' paychecks have not kept pace with the rising rents. ''Not surprisingly, tenants are being forced to spend increasing proportions of their incomes for rent,'' the report says. For those who want to find less expensive quarters, the choices are narrowing - mainly because of condominium conversions.

''Between 1980 and mid-1983, almost 9,000 new condominium units were created, virtually all conversions from existing rental stock,'' the report says. ''For every 10 nonsubsidized rental units in Boston, there now exists at least one condominium.'' Most condos are priced out of the range of the city's renters, the report adds.

Mayor Flynn's plan would replace the city's current system of regulating rents - a system that tenants' groups say provides uneven protection and the administration says is hard to enforce. (See box on next page.)

Long before he became mayor, Flynn was a strong advocate of tenants' rights. In keeping with his philosophy, the housing package is intended to ''protect poor people, without discouraging new investment,'' says mayoral press aide Jordan.

One of the major arguments against rent control is that it drives away investors by reducing or eliminating the profit on their investments. But Jordan says investors need not be wary of building new housing in Boston because the mayor's proposal specifies that all privately financed buildings constructed after 1972 will be exempt from rent control.

It is also an emergency plan to deal with a vacancy rate ''that hovers around 2 percent,'' Jordan says. The ordinance contains a ''trigger mechanism'' to repeal or revise the rent-control system if the vacancy rate should exceed 8 percent.

These safeguards fail to impress Mr. Rotenberg of the Rental Housing Association, who ticks off reasons why the ordinance is ''inappropriate'':

It will cost the city in lost revenues. A study released Sept. 11 by the Greater Boston Real Estate Board says the city's property-tax potential will fall by $1.8 million each year the ordinance is in effect. Boston, facing a projected budget deficit of $50 million for fiscal year 1985, cannot afford a housing policy that will shrink its tax base by foregoing higher assessments from new condominiums and by lowering assessed values on rental property, the report says.

It sends a ''wrong signal'' to investors. Financial institutions that provide mortgages for investors are aware that a city may eventually widen its application of rent control, ''even though new construction is (now) exempt,'' Rotenberg says. This possibility raises the risk to the lender.

It protects the wealthy as well as the needy. ''Rent control is a broad-brush approach - freezing all rentals.'' The people who need help are the low-income, the elderly, and the handicapped - and they're now protected by the current rent-grievance system, he says.

Realtors, landlords, and developers are not alone in their objections. Dissension can also be heard in the City Council chambers, just a few hundred feet from the mayor's office.

The housing package is before the council's Committee on Housing, chaired by James M. Kelly. Last week Councilor Kelly released his own 178-page housing study and indicated the mayor's plan is likely to be overhauled before it goes to the floor for a vote.

''Neighborhoods are falling apart, and they have been for 10 to 12 years. I maintain this is a direct result of the rent-control policies we instituted in 1969,'' Kelly said, citing the cycle of disinvestment that begins after rent control is instituted. The five-member housing committee will make a recommendation on housing policy the last week of September, he says.

But the Flynn package also has its allies on the City Council. Of the 13 councilors, four, including Councilor McCormack, have come out in support of the plan. McCormack has reservations about the condo-conversion regulations, but he says he expects the mayor's plan to ''go through with modifications.''

But three more councilors must be swayed if the package is to pass. To this end, Flynn has formed a team of staff secretary Richard Gatto and lobbyists Judy Meredith and Terence P. McDermott to iron out the wrinkles that councilors see in the housing plan.

All sides, while cautious, say they are encouraged by the current level of discussion between the mayor's office, the Committee on Housing, and the individual councilors.