Good evening, everyone.

Um, today we're joined here for uh the special committee on health opportunity, prosperity and education, also known as Hope Committee for a regular meeting uh for Monday, March second, two thousand twenty six.

Uh, Madam Clerk, if you could please call the role.

Chairman Picchardo.

Present.

Councillor Andel is absent.

Councillor Royas.

Present.

For a present when absent, you have a quorum.

Thank you, Madam Clerk.

Um for the purpose of this meeting.

And also have some deliberation among this committee.

We will also be sharing with you uh some additional dates that we will continue to have regarding the rent stabilization ordinance.

Um, the public will also have an opportunity to provide public testimony on uh any suggested amendments uh that we have uh for this for this ordinance.

At this time, uh, Madame Clerk, if you could read item number one.

Item one.

In ordinance amending chapter thirteen housing of the code of ordinances of the City of Providence to add the next appropriate article, the Providence Rent Stabilization Act.

I also would like to uh recognize uh that are present with us colleagues.

Uh Chairwoman Mary Kay Harris from Ward 11 and also uh our colleague from uh uh ward 2, Jill Davidson, and uh of course our president uh Rachel Miller.

Uh thank you for joining us.

At this time um we'll like to have the sponsor of the bill, um council president Rachel Miller, if you'd like to uh thank you all right, welcome.

Thank you, thank you, Chairman and uh committee members, and I really do want to thank you for taking this up tonight for having um nearly six hours, five and a half at least hours of testimony uh at the public hearing.

There's been many other hours of community meetings and more to come.

So I just want to very earnestly thank you for uh the deliberation and the the kind of trust um that you are putting in the people of Providence to come and share their experiences and voices.

So thank you for that.

Um I have been thinking about how to move uh rent stabilization in Providence for as long as I've been in office, so it's been seven years now.

Uh in that seven years, rent has risen dramatically in the last couple of years, an average of 16%, but long long before that, right?

Rent was uh felt like we were at a high seven years ago.

We have far surpassed that.

Families who uh were longtime Providence families have left our city in the time that I've been in office, and it's hard to um share the kind of policy failure that that feels like, right?

To have done nothing to uh stall huge, huge rent increases in my time uh almost two full terms, but one term and three quarters.

Um and so I'm I'm really glad that we're here.

Uh I'm I'm proud of the ordinance before you.

I think it represents uh some of the best things that have happened around the country in policies like this, and also has made adjustments that are specific to Providence that are specific to our rental market.

Uh we heard so much testimony, and I know there'll be a lot of feedback and and um amendments that come from that testimony, but I just want to kind of ground us in the why of this proposal, um, and then uh as you get into discussion, if there's anything that I can add in terms of the mechanics of the ordinance later, I'm happy to do that.

Um, but you know, I think one thing that I just want to remind people rent stabilization does exactly one thing and one thing only.

It stabilizes rent, it makes rent predictable, it helps families plan.

Um, it is not meant to do anything else.

Uh, and so we are, as this council, we have done a tremendous uh amount of other things related to increasing housing in the city of Providence.

Um we have overhauled the comprehensive plan, changing zoning, uh adding more density, adding uh uh accessory dwelling units.

We have added money into the housing trust fund and made sure that that money was for uh low-income residents specifically.

Uh we have subsidized private development through tax stabilization uh agreements, and we have banned uh algorithmic pricing that does get a little bit into rent prices, but all of that is increasing the housing stock in ways that we need to do and we'll keep doing.

Um what we are doing right now is recognizing that we cannot wait.

The people of Providence cannot wait for a market to correct itself.

In fact, the situation that we're in today is the result of the market, is a result of market forces.

Uh, so so we know that it's a situation that's just untenable.

Um then I just want to speak a little bit to what we kind of heard in committee and share some thoughts on um sorry in the public hearing and share some thoughts.

So people often cite data and studies as if they are kind of sacrosanct.

There's a couple things I just want to be absolutely clear on.

There is no peer reviewed study at all that shows that rent stabilization policies decrease construction.

In fact, we have seen in Portland, Maine, most recently that an increase in construction permits followed rent stabilization.

Now I don't think anyone would say, oh, that's because of rent stabilization, right?

That is a correlation.

Two things happened at once, and those things do not cause each other, right?

It's that correlation, not causation.

However, the thing that we know, if you talk to uh the people who do study this, if you talk to the people who do submit peer reviewed articles on this topic, uh the thing that determines development, the thing that determines construction is the desirability of the market.

Um it is by and large not the regulation of that market.

And so Rhode Island has a highly desirable market.

Providence has a highly desirable market in any of the measures, right?

And so I have shared in the past and can again, right, like how hot, which which list we're topping on uh hot markets.

Um that is a really important thing to keep in mind.

There is no evidence that rent stabilization decreases construction.

That is something worth saying over and over and over again.

What we know that it does do is it increases long-term tenancy.

It slows uh rent increases.

Um, you know, you hear people say, oh, well, 4%, 4%, 4% every year, that's 20%.

And it's true in five years, that's 20%.

That's 20% for a family that can plan a rent increase, knowing that it might come over time, as opposed to being faced with a 20% rent increase with uh 30 or 60 days notice.

Um that is a dramatically different situation.

We're talking about how people live.

Um, and as a renter, frankly, how I live.

Um it increases stability, it uh decreases the variability that we know has contributed to homelessness in Providence.

We have seen more and more people living on the streets without a home.

We know that the out-of-control rent prices are part of that uh story.

Um we know that it reduces rent in the long term, especially with the uh vacancy control aspect of it, right?

So a lot of people, a lot of uh a lot of people talk about, oh, you know, I keep rent stable and then I flip it to market rate when it becomes open.

And I think as much as, you know, I think we could talk about 4% keeping rent stable or up to 4% increases keeping rent relatively stable.

Um, and then we could also talk about okay, so there's a couple or a young family or an individual who's enjoying that stability while it lasts, and then all of a sudden that apartment is no longer available to all of the people in that income bracket, which by the way, in Providence we know is is most of us, right?

And so when we're thinking about housing, we need to be thinking about what is a full community experience and the full community need.

Um, and then you know, there's two other pieces, but the one thing that folks talked about a lot was this, oh, you know, it won't impact the people who need it.

And that is not related to the policy that's in front of you.

So the policy that in in front of you is saying whatever the start rate of rent, whatever the starting price is, that's the price, right?

There's the rent board that the um policy creates does not tell you how much rent you can charge from the get, right?

And so people who are in 2300 a month apartments are gonna stay in a 2300 a month apartment.

Um they'll just know that it can't jump by 30% in the next year, only by four.

Um, and uh yeah, so I think there's a lot more that we can get into, and I'm I'm sure that we will.

There's one thing that I think is so fundamental to what the um policy in front of you does.

Uh there is nowhere uh in the state of Rhode Island and the city of Providence where someone who is a renter who is talking about their whole lives, right?

Is talking about their family, their stability, their ability to sleep well in a bed at night.

Um when something happens to that uh price of their rent, there is nowhere right now in the city for them to go and talk.

There is nowhere.

There's nowhere that people can uh speak to someone who has authority over the situation and say, yep, you know what?

You ought not have to look at a rent increase that outprices you from the home that you live in.

Um and and the rent board will do that, right?

It creates um a fundamental shift in what is allowable for people who rent in the city of Providence.

Um and then finally, you know, one thing that also came up pretty frequently in public testimony was I understand that it's an issue, right?

I understand that the rent increases are an issue, but why does it have to be mine?

Um and I I really hear that.

I think it's also really important to think about that response, right?

Because we're talking about um folks who own property and are renting.

The intent of this ordinance is to make sure that people can make a return on their investment, can cover costs, can keep building maintained.

By the way, there's no uh studies show that buildings do remain maintained in rent stable in cities with rent stabilization, right?

That that is not another fear point that comes up.

Uh, but the reality is as a property owner or as a renter, the conditions of housing and availability of housing is an issue for all of us, right?

Uh and so to sort of deny local government the ability to set some constraints on um the amassing profit, right?

That means that oh, yeah, local government just can't care about the people who live here, can't care about the market, can't care about the city.

And I know that's not the case.

I know that we do.

Um I know that we cannot do nothing.

I think that doing nothing uh specifically about the high cost of rent and the ability for rent to continue to skyrocket.

Uh doing nothing will be catastrophic, uh, as it already has been for many, many residents.

So thank you.

And I'm of course happy to continue discussing over there from my seat.

Thanks.

Thank you.

Uh President Miller for that testimony, and I'm sure our committee will have some uh questions as we move forward.

At this time, I'd like to uh call um Larry Mancini, who is the chief financial for the city of Providence, and also I like to call uh Tom Soloros.

Yes, please can you please write your right hand?

Do you still are on the penalty of your the testimony?

You're about to give me the truth, the whole truth, nothing but the truth.

I do.

Yes, can you please say your name and title for the record?

Lawrence Mancini, Chief Financial Officer of City of Providence, uh Tom Segur is uh independent policy consultant.

Thank you.

Welcome.

You may see it.

Mr.

Chairman, if you may, I think I had asked you earlier.

Um Chief Operating Officer Courtney Hawkins had prepared a letter to the committee and had asked that uh with your consent and the committee's consent that I at least be permitted to submit it to the clerk or give a brief overview of her uh remarks before I give my own remarks.

Would that be appropriate?

Thank you.

We do have that letter, and uh we'll enter it into we have that letter.

You mind giving it out loud.

Yeah, yeah.

After um we'll submit this uh item into the record as item number one.

And uh what we'll do is uh is there a motion to accept?

So moved there is a uh a motion and a second.

All those in favor?

The A's have it.

The item is uh before us.

Uh and Larry Mr.

Mr.

Chairman, I will do my best to paraphrase it given that it's uh the letter of Ms.

Hawkins, but I do want to at least touch upon most of the items that she remembered again the data today and addressed to the committee members.

She uh she states that she's writing to follow up on the first fiscal note that the administration received on February 18, 2026, related to the province rent stabilization act.

While we appreciate having the opportunity to review the first version of this note, there are outstanding assumptions and impacts that must be further detailed to understand the true financial impact on the city's finances.

We've outlined these follow-up questions below in hopes that this will help your committee in its deliberations.

She goes on to state that as required by the city charter, the fiscal note must include detailed estimates of the fiscal implications of the ordinance for this ordinance.

These estimates should include one projected impacts of the tax levy, including any shift in tax burden across tax clarification, and two projected expenses to operate optionalize the components of the ordinance.

And with respect, Mr.

Chairman and members of the committee of the impacts to tax levy, I do have in my own testimony.

I will go into detail, but allow me, if you will, the other concerns that she has expressed in her letter, and I'll only take another minute of your time to express that.

In addition to the impacts to the tax levy, she indicates that there are projected expenses to implement this ordinance, and they include first the current fiscal note does not include any projected estimates for the volume of appeals that the council is expected if implemented.

This number is critical to ensure compliance with the required timelines.

Given that determining if a property is rent stabilized along with the complications in determining the allowable rent, would be in different circumstances.

The council should consider several scenarios for the volume of potential appeals.

The administration would expect a high number of appeals, especially in the first years of implementation.

She goes on further to cite sections 1371, 1372, 1373, and 1373, all of which are assigned by the by city departments that will have additional burden associated with this ordinance.

As an example, 1371 housing standards compliance, who would be responsible for evaluating if a unit is following local and state housing codes for which enforcement is spread across multiple city and state agencies.

There would be a burden to city staff.

Section 1372 of the ordinance, major renovations and reconfigurations.

Who is responsible for evaluating the technical opponents of this section?

She was on the state that this will require someone with construction experience to both evaluate the nature of the renovations and to establish if the cost associated with the work is fairly represented.

The city staff are going to be expected to perform this function.

If city staff is expected to perform this function, then allocations to those department budgets should be estimated.

If a third-party cost estimator should be involved, that consultant fee must be included.

Under section 1373, how have you evaluated the staffing required to review the impact of tax increases on rental properties?

During the most recent revaluation, nearly 100% of properties saw a tax increase of more than 5% on their properties.

How would the board manage the approval process for thousands of potential rental increases in this scenario?

And then again, on section 1373, standard of review, fair return, who will be responsible for evaluating the completion of capital improvements, the condition of properties, and the code compliance.

These components will require technical knowledge and skills.

If city staff once again are going to be expected to perform this function, then allocations to those department budgets should be estimated.

The fiscal note should also estimate the non-personnel related costs with particular attention to the following technical expenses such as IT, space considerations for for occupancy, and of course the legal costs associated with that.

In summary, she writes, Mr.

Chairman, members of the committee, it is incredibly important that an accurate fiscal note is developed as part of the consideration of this ordinance.

Without clear operational analysis and vetting, this ordinance is almost guaranteed to set up an expectation for constituents that cannot be fulfilled.

The use of the para budget as a proxy for an estimate of this board's budget is not sufficient as the requirement of the two functions and are very different.

And then finally, she states, Mr.

Chairman, under section 1385, Section E articulates that quote, funds shall be sufficient to ensure full implementation of the board's duties, which creates a funding mandate not established on behalf of any other city department.

She signs off sincerely Courtney E.

Hawkins, chief operating officer.

And with respect, Mr.

Chairman, I have provided the clerk with several copies of this letter for the record.

Thank you.

Thank you.

In the record, and what we'll do also for the purpose of this hearing and committee meeting, uh, we'll read it into the record after you give your remarks.

Thank you, Mr.

Chairman.

So if I may continue in my own right, once again, good evening, uh, Mr.

Chairman, members of the committee.

I am Lawrence Mancini, I'm the city's chief financial officer.

I want to first start by stressing that the administration recognizes the seriousness of housing challenges facing residents in Providence.

As you know, I attended the public hearing and I sat through that hearing and I didn't hear all of the testimony, and I was moved by that testimony in both ways for the record.

And I did that out of respect to the public, respect to the administration, and more importantly, respect to the city council who I appeared before that evening as I appear before this evening.

So, with that said, I wanted to know that.

Families across the city are struggling with raising rising rents and are a real shortage of available housing.

Our departments work diligently every day to increase supply to protect, preserve, and produce housing opportunities for residents.

The urgency is real, and as evidenced by the administration's housing report, we share the goal of helping residents remain safely housed in our community.

My role tonight is not to debate the intention behind this ordinance.

My responsibility is to explain the financial risks, implementation challenges, and economic consequences the city must consider before adopting a policy that would permanently affect our municipal budget and tax structure.

As I noted in the public hearing, the administration requested a fiscal analysis of the proposal on January 26th.

The finance department received the fiscal note the day of the hearing, but it covers only some of the costs we have seen in other communities who have similar policies.

The proposal establishes a residential rent regulation board with staff, legal support, and administrative oversight.

The fiscal note estimates the annual operating cost at approximately 576,000 beginning next fiscal year and increasing in future years.

This includes personnel benefits and operating expenses.

This is not a one-time implementation cost.

It is an ongoing structural obligation that would need to be funded every year through the city budget.

This estimate does not include the work of additional departments to provide data, confirm ownership and improvements, and was not developed in consultation with any of the administration's experts in those areas or departments.

Administrative cost, however, is not the primary functional and financial concern.

The most significant issue is the potential impact on province's tax base.

Province relies heavily on property taxes to fund basic municipal services.

Property taxes represent roughly 42% of the city's total revenue and its budget.

Approximately 60% of residential properties contain rental units, representing billions of dollars in assessed value, the ordinance directly affects that property class.

Based on a preliminary analysis conducted by the finance department, approximately 44% of residential dwellings in province could be subject to the rent control provisions.

Applying observed impacts from similar policies, the city could experience property tax revenue losses or shifts ranging approximately 1.9 million to 3.2 million annually.

And under certain model conditions, the losses could approach between 10.3 million and 17.5 million.

These protections do not include additional valuation impacts.

In St.

Paul, Minnesota, property values decline by approximately 4.4% following adoption of rent control.

A similar reduction in province would further reduce tax revenue.

It is important to understand that lost tax revenue does not disappear without consequence.

The city must still fund schools, police, fire, public works, capital improvements, and importantly, snow removal, all within a very small discretionary budget.

When revenue from one class of property declines, the tax burden shifts to others.

In practice, that means higher tax rates for single family homeowners and owner-occupied properties, including many seniors and long-time residents living on fixed incomes.

The fiscal note itself acknowledges that limits on rent increases may affect property valuation and lead to assessment appeals and litigation.

Even a modest decline in assessed values could reduce property tax collections in the first year, and the city would incur legal costs defending assessment challenges.

Beyond fiscal risk, there are implementation and housing policy concerns.

Rent stabilization does not freeze rents or reduce existing rents.

It regulates the pace of future increases.

Evidence from other jurisdictions urges caution.

In St.

Paul, Minnesota, strict rent control adopted in 2021 was followed by a dramatic reduction in new housing permits while rents continue to rise.

This lost development activity has caused legislators to roll back many aspects of their policy.

By contrast, nearby Minneapolis pursued zoning reforms to increase housing supply and experience both increased construction and declining rents.

Other cities have faced administrative complexity after adopting similar policies.

Portland, Maine, has experienced multi year backlogs of exemption applications and appeals, as well as unclear administrative roles.

The proposed vacancy control provisions may also produce unintended effects.

When annual increases are capped, property owners are incentivized to take the maximum increase every year to keep pace with rising costs, effectively institutionalizing annual rent increases rather than moderating them.

Research also indicates rent control policies often disproportionately benefit higher income households who are more likely to secure and remain in regulated units while lower income residents may remain vulnerable to displacement.

Targeting programs such as rental assistance, eviction, defense, and housing stabilization efforts directly support those residents.

This ordinance, as drafted, also includes provisions that could affect housing production.

The 99 year deed restriction requirement would prevent many existing affordable developments from qualifying for exemption.

Additionally, the proposed new construction exemption period does not align with standard mortgage underwriting terms, creating uncertainty for lenders and developers that is already impacting projects in the city's development pipeline.

Providence cannot afford policies that reduce investment, delay new housing, or destabilize the tax base.

This proposed this proposal represents a significant structural change to the city's revenue environment that clearly has not been taken into consideration.

It introduces permanent administrative cost, potential legal exposure, and the possibility of multi-million dollar impacts to municipal revenue.

We all share the goal of keeping residents housed and making province affordable, but fiscal sustainability is also a form of protection.

If we do, if we undermine the city's financial stability, we risk reducing services or shifting costs onto other residents, including the very households we are trying to help.

Before moving forward, I respectfully urge the committee and the council to allow a full and transparent discussion with the administration and subject matter experts regarding the fiscal, legal, and economic impacts of this league this legislation.

In closing, I want to emphasize that everyone here shares the same goal, keeping Providence residents housed and making our city affordable.

The question before you tonight is not whether we should act, but whether this specific policy will achieve that without creating new problems.

Thank you, Mr.

Mancini.

Thank you, Mr.

Chairman.

Would you like also to us to have that in and submit?

You may submit it in the record.

Is there a motion?

A motion to accept uh the items as number two has been seconded.

Is there any other further discussion is accepted?

Thank you.

Um questions from the committee to uh Mr.

Larry Mancini.

Thank you.

Councilwoman.

Thank you so much.

Um, Chief, thank you very much for being here and for providing your testimony on this.

Um I do have a quick question, potentially others, um, but one of the things that you had mentioned was that um the financial uh department for the city ran a couple of different models and saw that there was the potential of the loss of tax revenue anywhere from 1.9 million to 3.2 million, and then in different models, it was 10 to 17 million.

Would you be able to elaborate on some of what those models describe and how you got to those numbers?

I'd be glad to.

So uh, Councilwoman, so um as I had said in the public hearing, and given that uh we were looking to establish some information prior to the public hearing, uh, in the city of Portland, the now known model that we use, they do not use tax classification.

So they use an all-in tax rate spread across the entire city to arrive at their calculation.

Hence, if we were to do the same, we would arrive at the much larger differentiation between between 10 and 17 million.

If we could specifically identify, and the tax assessors office did in fact do that by identifying how many single family owner-occupied properties, multifamily rental properties do do exist by their classification and apply that same theory when applied and not being able to further identify other owner-occupied or rental properties that could be affected by the ordinance.

The results of that came up with a much smaller loss or shift of 1.2 million to 3.4 million.

So to be clear about that, it was based upon doing it based on our specific identification, and then what if we were to do it under the model that existed in Portland because they only have one tax classification, we have multiple tax classifications.

Thank you.

That it further questions for now.

Consident Royus.

Thank you, Chair.

Just had a few questions.

Uh Mr.

Messini, I just what is the uh can you just explain what would what exactly would be the unintended consequence?

What the driver of lost revenue.

What is it about rent stabilization that drives a loss of revenue for the city?

So if there was a loss of revenue based upon the model that I just discussed with councilwoman Peterson, it is a loss in that category that then becomes a shift to another category.

And that shift most likely would be single family homes.

What category?

I'm sorry, just category of owner-occupied rental property or multifamily that would be a different classification, different tax rate valuations are different because of the property's use versus a single family.

Once that valuation loss becomes a shift, the shift is made up elsewhere, and most likely would be in single family homes.

I guess this is where I'm getting at.

Why would uh could you just address the impact of uh revals?

Correct.

Um could you could you just from the from the ministry's uh administration's perspective how rent stabilization could impact revals and why?

Well reval is based on market value based on a certain measurement date.

Yeah.

So with due respect to the last reval, as we saw the prices of values based upon sales activity, which is the comparable method that is generally used.

If there was a decline in sales because there was less interest involved in becoming a um non-owner occupied owner of a multifamily property, and therefore values slip, uh property stayed on the market longer, it would show up in that reval, the next set of revaluation three years hence that there was a smaller valuation.

Um if it if there was empirical evidence to demonstrate that it was caused by a lack of confidence or a lack of interest in that market that might show up in the reval, and hence it would show up in a revenue loss because the values have slipped.

Got it.

And uh my my second uh question here is um well, not really, I guess a question, but I just want to call it out because I I do think it's the uh the perception that uh so I've looked into this as well when St.

Paul it was uh mentioned by the administration that uh construction permits dropped significantly in 2021.

Um what I've looked into is that rent stabilization at that time uh the law went into effect in 2022, and they campaign for rent stabilization in St.

Paul uh and you know, so there's there's also some uh sentiment around.

Well, uh there was a whisper campaign, and somehow homeowners found out that rent stabilization was was um uh coming, and so uh they uh pulled back on their permits, but uh does administration understand that the the law took effect in 2022 and that the at that time we had a labor shortage, we had um like the market was not favorable regionally, it was a regional impact because if you looked at other cities at that time, permits were also uh impacted regionally speaking, it was pretty much nationwide.

Uh does the administration take that into consideration?

I believe we have, and I think the administration, while not taking a specific position on the interpretation of that data, or as the council president mentioned the word of correlation when that occurs, and uh hearing from what you said this evening, so-called whisper campaign, whisper or otherwise, I think when when there's talk about change in statutes, laws, or ordinances, I do think it builds some sort of momentum and maybe sensationalism that it might frighten the market, any market.

And I don't mean to say that happened in St.

Paul, it would happen here in province, but that's generally a condition precedent that would occur that could in fact say, while that law has not taken effect yet, before it does, I'm in I'm not inclined to make any new investment, therefore I'm not willing to take out any permits associated with construction.

That's all good.

Thank you.

We're gonna we'll we'll move forward and then uh we'll have you there if we have some more questions uh along also with uh for the uh Brian sponsor.

Um more question that just came up.

All right, Consulwoman Peterson.

One of the questions that I have is is there um is there any uh data that shows other jurisdictions that have that have created some sort of rent stabilization uh opportunity in their municipality where a tax increase did happen on single family homes?

If there is uh Madam Councilman, I don't have access or or possession of it, but I'm happy to review that and see if you're gonna be able to do that.

Please that would be really important to have.

Thank you.

I'd be glad to do that.

Councilman Sanchez.

Thank you, uh Chairman.

Uh thank you, Chief Chief Mancini, for uh being here and always being available to answer questions, and of course, a lot of gratitude for you uh for staying uh the full six hours with us a couple weeks ago.

My pleasure, sir.

We we truly appreciate it, and I know the people of Province appreciate it.

My question, Mancini, and and I don't want to you know beat around the bush, and I I just kind of want to be direct as much as possible, always in a respectful manner uh with you because that's always what you show us.

Is there any possible amendments that that we could make to our ordinance uh that still you know have the the full intent of stabilizing rents that the administration would support?

Um because it's just a full transparency.

Uh the mayor's been in opposition from this uh piece of legislation without even seeing a piece of legislation uh from uh a couple years ago, and obviously he uh is still opposing it right now.

Um but just so the public understands is there any anything that we could do as as a city council, uh the the sponsors of this uh to get to the the administration to uh to a point where uh they would support this uh piece of legislation.

So councilman, I hear that, and I um well, I wouldn't be the official spokesperson to reply that supply the answer.

I think that that would probably amount to a policy considerations, and I think that is certainly a fair question, and folks in policy, our policy chief were to look at that.

Um of the provisions that included cost expost expenditures um should be better vetted, I think, to arrive at what would that really look like should this become uh an ordinance into law as to um how to either improve, expand, or otherwise modify the current ordinance.

Uh I respectfully defer to the folks who know policy better than I do.

Um our role in finance is to provide impact information where necessary, but certainly happy to work with our policy folks and our folks in planning and housing to arrive at something.

Any follow-up on that?

No, thank thank you.

Thank you, Mr.

Chairman.

Councilman Williams.

Thank you.

Actually, Councillor Sanchez reminded me I had another question uh for Mr.

Mussini and I forgot and I remembered, so beer with me.

I just uh I one of the it sounds like preferred I I will say this sounds like a question for the policy team, but um I do think it's relevant um in in your sort of scope of work, I think.

Um there's a preference to provide sort of rental assistance, I'm assuming, um, or at least it was referenced um that the that the city might be interested in providing rental assistance for tenants do you know if there's a number for that, how much that would cost the taxpayers, and who would be in which department would be administering that, and how many what's because you know we've talked we're talking about the cost, the administrative cost of a rent board.

Right, but I I would imagine there's a significant cost to administer a rental assistance program through the city.

There would be several, I'm sure, FTEs, and in my mind, uh rental assistance program that would be effective um for a housing crisis of this magnitude would probably be reaching in the millions.

You know, I'm um and it would go rather quickly.

Um and so has the city talked about what I believe they're gonna submit that with the budget.

Uh I don't know if you've heard any uh any things about sort of the cost of that and how they would administer that program.

So while I'm aware of the phrase rental assistance being discussed, uh nothing solid has yet been presented to finance in order to give a uh deeper dive, but certainly if it does come before us, we will do the due diligence that we're always requested to do, and we will have that information.

Thank you.

Thank you, Mr.

Chairman.

Uh Ms.

Mancini, if you could just hang on.

Yes.

Uh as uh we hear from our next uh invited guest, uh Tomorros.

So if you could uh provide us with an introduction and then speak on the item uh before you you go you we already have your letter uh and uh the fiscal note that you have provided.

I would like uh to detain a motion to accept the item.

The motion has been uh moved and second.

All those in favor?

The A's have it.

It is before us.

Welcome, Mr.

Segoros.

It's good to see you.

It's been a long time since our legislative days uh at the State House.

Welcome.

It has, thank you very much.

Thank you for the invitation and the opportunity to speak uh and and for the uh opportunity to submit my thoughts about the fiscal impact of this uh ordinance.

Um I won't I won't I don't think it's necessary to read this, but I I I'd be happy to sort of step through it.

Um you may you may present it as you will.

Okay.

Um obviously is before us, and and I think that uh we as a committee have had it for a couple of days and especially uh well a couple of weeks, um especially during our our uh marathon hearing the last time that we were here.

Uh so please this is uh your time and uh uh committee members who also have some questions, some follow-up for perhaps uh yourself and also uh uh some follow-up with Mr.

Mancini and then also from our prime sponsor um kind of President Miller.

Sure.

I'd be happy to.

Um well, I guess first about me.

Uh my name's Tom Seguris.

I uh I I live and grew up in Rhode Island.

I have made uh at least part of my living for the last 40 years as an independent policy consultant.

Uh I have clients in uh multiple states uh have testified to legislatures in in six states about public finance issues of one kind or another.

Um I was asked to to look at the uh at the impacts here.

Um the obviously a four percent limit on the uh future rent increases could have an impact on the valuation of of properties.

I mean, this is the model that uh um uh that Mr.

Mancini was referring to.

Uh the question is, you know, what kinds of impacts would a limit on rent increases have to the potential buyer of a of an apartment building.

And um, and it's a little hard to tell, right?

There's a lot of there's different models.

Uh he was talking about models that were used in Portland or models that were used in um uh St.

Paul, maybe uh I forget the other.

But basically, what you're doing is you're trying to anticipate what is the potential impact on the value of a property.

And in and in fact, if you have some property that um say you're imagining that it's gonna pay off its uh that some apartment is going to pay off itself in 10 years, because you're anticipating, say, five percent annual increases, but you're limited to four percent, that means that the property will pay off instead of paying off in 10 years, it'll pay off in 10 years and five months.

So you could say, well, that's uh that's around five percent, maybe, and so you could take that as a potential estimate of what kind of a hit there would be on property values.

Now, this is this is like other models, just an estimate.

This is uh an estimate where you're trying to make plausible assumptions about what would happen, but you can't really be sure until it comes uh comes until it comes to a court or comes to a assessment hearing, and even then you can't really be sure until there's enough market experience to know for sure.

But we still can that it doesn't mean that we're powerless to make estimates.

You can take these estimates and and work with them to see what happens.

So I took a five percent hit as my guess.

Um, so that's a third, a third model relative to the other two.

But the thing is that um uh a five percent hit is um you know that there's about 34,000 properties in the city that are uh residential use in some kind.

That's about 19 billion dollars in aggregate value.

Um about 60 percent of those are uh have some kind of rental in them.

So now we're down to about 10 billion dollars in in value.

If we are uh then considering which ones are covered by the uh by the ordinance, um I used a number of 60 percent, but that's because I was looking to set a ceiling, right?

I was looking, I was I was trying to make a uh an overestimate because I'm looking for I'm looking to maximize the the impact on the city budget.

And so if you if you guess 60 percent, that's about six billion dollars worth of value uh for the for the city.

uh then considering which ones are covered by the uh by the ordinance um I used a number of 60 percent but that's because I was looking to set a ceiling right I was looking I was I was trying to make a uh an overestimate because I'm looking for I'm looking to maximize the the impact on the city budget and so if you if you guess 60 percent that's about six billion dollars worth of value uh for the for the city that's six billion dollars in value that might that could potentially be affected compared to the 38 billion dollars of uh the total um the total valuation of property in the city so five percent uh a five percent hit on that uh value would of course be significant but I think at this point it's important to remember that assessments are not the way that the city supports its services assessments are the way that the city apportions the the uh the burden of paying for the city services you know the city uh sets the tax rates each year and if the uh and the city sets the tax rates according to uh the budget that is uh that's necessary to be met so if the property value goes down over here it'll be compensated over here because providence has multiple rates uh it is obviously possible for the city to um short itself by not setting one rate high enough to uh to actually meet the budget but I assumed in this note that the city would not do that and that a loss in value over here would simply be compensated by uh by changing the rate to uh to meet it now because there are a collection of rates to change the city and the city council has some discretion about where exactly the the burden of reallocation falls but uh before we move on from that point let's talk about what that burden actually is um so say uh say it's 10 million dollars say it say it winds up being 10 million dollars the city raises about 400 million dollars every year in property taxes so 10 million dollars represents approximately a quarter of one percent right and so what you're doing is you'd be taking a quarter of one percent of the total tax burden currently paid for by 15% of the city's property and allocating it to the other 85% of the city's property so um those I think are the numbers to uh to think about that that we're talking about reallocating a a quarter of one percent of the uh uh of the take um but that also is why I believe that in the uh even the the medium term or the long term that the essential impact on the city's budget in terms of property tax revenue will be uh very small or negligible the um to move on to the next thing the the question of services and how to staff the um uh the rent board um the ordinance uh the ordinance before you is fairly clear about certain things it's fairly clear about the uh percentage of rents uh the percentage limits of on rent it's fairly clear about which properties are subject to it and which properties are not and so um my guess and and and because the uh rent board is um is set up as a uh complaint driven process uh my guess my assumption here is that many possible cases will not be submitted to the rent board because they will be clear because uh because it will be clear to a property owner that this is not a rent increase that would actually pass at the at the board so my my guess is that the clarity of the language in the ordinance means that the uh that the nightmare scenario of the rent board being totally overwhelmed with appeals is uh is less likely to happen and that's why uh that's why it seemed plausible to use uh an existing board like para as a as a model that that it seemed as if the rent board itself uh would require an executive director and an assistant some legal uh uh some some legal help and a case manager to do a certain amount of investigation um that uh that is the assumption that uh that powered this um this estimate um uh beyond the uh beyond that the uh the next section I talk about the economic impact and this is I think relevant to some of the other things that were that came up um just roughly guessing again or or making as informed estimates as we as we can uh my estimate is that the aggregate rent collected in the city is somewhere in the in the neighborhood of somewhere between 1.1 and maybe 1.5 billion dollars a year um and I think that when people are talking just as an aside I think that when people are talking about um uh rent subsidies uh that you should keep that number in mind because for a rent subsidy to actually make a difference in the market uh it would seem plausible that it should be some appreciable fraction of the rent that's paid and so people should

And I think that when people are talking just as an aside, I think that when people are talking about rent subsidies, that you should keep that number in mind, because for a rent subsidy to actually make a difference in the market, it would seem plausible that it should be some appreciable fraction of the rent that's paid.

And so people should should be thinking in terms of the rent being a billion dollars.

I mean, that's a that's a lot of money.

Um and so when people just sort of blithely talk about rent rent subsidies, I think it's important to uh to sort of recalibrate those those thoughts and think hard about what that actually means.

On the brighter side, I should also point out that uh renters as a class are tend to be people who uh spend what they have.

And so money saved on rent is likely not going to be money saved in a bank, but likely going to be money spent on other expenses, and that that I think will have a certain amount of economic impact in the neighborhoods where the um uh well in the neighborhoods of the city.

I don't think that um I don't think that any uh that additional economic activity like that is actually capturable by the city's tax um uh the city's current tax structure, so it did not seem that the actual impact on the city would be anything more than negligible.

Um I I I need though to end by well the next step is to maybe this isn't the end, but uh the next step is to go back to the property tax estimate.

I do think that in uh that in the long term that the effect on the property tax roles will be negligible, but I do think that there is a significant risk uh in the near term, and the risk is basically that come June when say the uh orbit or the ordinance goes into effect, um uh apartment owners will be able to appeal, if not to the uh assessor's office to the courts and and say, oh, the uh the ordinance here has affected my property value.

And then they will have to make that argument to a court or to the assessor's office about what actually will be the impact, they will have a debate about the model to use, whether to use the one that I'm talking about or the ones that uh Mr.

Mancini was talking about.

How those things end up uh is really difficult to say.

Um but if you think that if you think that half of the properties will appeal and succeed, and that a five percent uh reduction in value is what they will get, then it seems to me that you can you can count on around a million and a half dollars worth of impact in fiscal year 27, right?

The the upcoming fiscal year.

Now, when the tax rates are set again uh next year, I think they will compensate for whatever whatever loss of value there had been, but I do think that in the near term, in the in the uh upcoming fiscal year, there is a certain amount of risk to uh and the risk would include both the the lost property tax value and and probably some legal costs as well.

Um I guess the uh the last thing I'd also other things I'd like to bring to your attention that are related.

Um Mr.

Mancini talked about the shift of burden to seniors and longtime residents, and and I guess I would point out that seniors and long-time residents actually also live in rentals.

Uh, and so that's a a point I'd like you to keep in mind.

The um uh there's probably much more to say about the stabilization ordinance itself, but I am gonna confine my remarks to the impact on the city budget and and um uh leave it there.

So thank you very much for the time.

Um I'm happy to answer whatever questions the uh uh the committee may have for me.

Thank you, Mr.

Sorros.

Uh thanks for the presentation.

Um any questions from the committee?

Consulwoman Shelley Peterson.

Thank you.

Um thank you very much for preparing this for us and um being here to facilitate the conversation uh for the committee.

Um I want to refer back to something that you had mentioned um with regards to tax estimates, and then my question isn't directed to you, it's actually now again back to the chief because there's something that um I think is very relevant in what you had said.

Um Chief, one of the things that we often talk about, and we and we brought it up quite a bit in last year's um uh re-evaluation process.

Uh we all know that uh the values that are put forward are based on the sales prices of or the sales that have happened in the city.

Um and part of what we're hearing today is that um in the short term we could actually see something, but one of the things that I want to just understand a little bit more is um we also have to prioritize when there's a drop in sales in the city, regardless of whether this ordinance is available or not, right?

So can you tell me a little bit about what we have to do or what we've done in the past when the re-evaluation of a property has actually come in significantly lower than where we were the year before, two years before.

Thank you, Councilwoman, and I'm glad you asked because on your question, and I want to have if I may follow up on a discussion that Mr.

Segoris made about tax rates, and as we both acknowledged, loss also equals shift, which is really the word is redistribute.

So to councilwoman Peterson's question, that's the crux of it.

Each city budget, when next reviewed for the following fiscal year, becomes the base for that year going forward in a year of rising values caused by a reval, not just the value that went up because of market value.

The city assessors team always uses the process known as tax equalization.

We've had this discussion many times before the council, and I see the heads nodding because it is the correct methodology.

You lower the tax rates equal to the new higher values if there are higher values to return back to the base revenue that was certified in the last levy.

That's the process of tax equalization.

Then from there, pardon the expression, you grow the budget to meet the needs of the budget's increase, whether it's salary and wage increases, medical insurance, because we're self-insured, pension contributions, and such.

And ideally, you hope that there was enough growth in the increases when captured at now a modified, hopefully lower rate to support the budget.

What you saw last year caused by the impact of a agreed-upon settlement, forced the city, and the council was active in those discussions, to the point where you even modeled your own model, arriving at a new lower rate, lower than even the single family home.

And that was designed to give, in some cases, you hope, rent um tax relief to a single to a owner-occupied multifamily property that would ideally stabilize their co their rents increases or pass it along to their tenants.

In that regard, when there is a loss of revenue in any category, it does cause an automatic redistribution.

The revenue has to be made up somewhere.

You have to begin at base value before you can even begin to grow the levy if you do grow it year over year.

This exercise is not profound, and quite frankly, it is the backbone and the basis of city budgeting.

Two-thirds of the city's revenue is based on tax revenue, no doubt.

Where relief can be given and granted, we have done that.

We have increased the size of our exemptions to seniors and others, veterans.

I think you all could appreciate that.

You participate in those discussions.

But our concern is the unidentified, unknown yet to be determined loss of real value, and where does it get made up?

It will have to shift, it will have to be made up somewhere if you intend on continue with a base budget of the year prior before you move to the next year.

And I hope that answered your question.

Thank you.

Any other questions?

So I have uh a couple of questions or clarification.

I know Mr.

Mancini and many people refer to this uh piece of legislation or ordinance as rent control.

Correct.

And even in your remarks, you started off with rent control, rent control, and then shifted over to rent stabilization.

So I guess this goes to both of you.

What is your version of uh rent control or rent stabilization?

And the second one is seeing that this piece of no ordinance that is different than the other uh pieces of legislation that have been enacted in cities such as Maine and Minnesota, how do they compare?

So if I may be for Mr.

Segoras, um uh Mr.

Chairman members of the committee, um, while that term is not meant to be used loosely and interchangeably, clearly the act is known as stabilization.

And so, first and foremost, I believe it would be the act of the city as a city corporate government to provide some degree of stabilization to rising rents.

But to do that, that requires a control feature.

If that control feature is some rental board or some other mechanism that does that, permit me, if you will, but pardon me also that they're not meant to, in fact, leave any negative connotation where in fact they were used liberally, if you will, to describe what the action may take in order to achieve stabilization, there may need to be certain controls associated with that process.

Would you like to take that?

Mr.

Segoros?

Sure.

I I would say that uh rent stabilization is a form of price control.

Um we are, I think all familiar with price controls in many different contexts of our of our economy.

Uh we control the state controls prices in insurance, in taxicabs, in uh uh cigarettes, um, all kinds of things.

The federal government controls uh prices that of um you know interest rates, uh drug prices.

I mean, there are all kinds of there are all kinds of price controls that we take for granted.

Um rent stabilization is not the same as rent control.

It is, as I alluded to when I was talking about the the um uh when I was talking about the potential administrative burden, um it's a much much simpler kind of a thing to uh to do, but it is still a form of price control.

The thing that uh the thing that I find notable about uh price controls is that none of those controls, uh insurance, banking, whatever, none of those controls were put into place because some economists thought that theory predicted it would be a good idea, right?

All of those things were put into place because people perceived an emergency.

People perceived a problem, you know.

There was a uh there was uh uh insurance scandals, there was there were banking crises, there were um uh there were gas uh gas price uh uh issues.

I mean, all of these controls were put into place because for one reason or another, the free market did not work, and these these uh these these price controls were enacted because of that problem.

And I think that it's remarkable that some of these things are unremarkable, you know, that they have been part of our lives for so long that uh you know insurance regulation is a fascinating example.

It was something that happened in the latter part of the 19th century when um uh you know the city of Chicago burnt down, and only about 20% of the uh insurance policies actually paid off.

And somebody said, Oh, you know, maybe we should uh maybe we should regulate the prices of insurance so that the insurance policies actually mean something, right?

The banking uh banking industry was wrecked by scandals all through the 1910s and 1920s, and we came up with bank regulation to try to prevent that from happening in the future.

These are you know, these the price controls that we take for granted are just a simple part of um the history that has taught us that sometimes there is a place to stand in to for government to step in and assert some some form of control over prices.

You can debate about how to um uh you know how best to do that.

What's the lightest touch that you need to actually uh enact realistic change?

But I think that these are um you know these are what you find when you try to learn from our from our nation's economic history.

Thank you.

Um follow-up question, um call my colleague.

The other uh during the hearing, one thing that stuck out to me was that, and I've always asked this in a sense do we have obviously and you both uh deal with numbers, and people have always said numbers don't lie, but in government and other entities, uh people interpret it differently, or they as you pointed out, um, even though the numbers may say that this is may not be the best idea to go to do certain things, go ahead and we try it.

One of the testimony, and we know that we have a housing crisis and we have a rental crisis in the city of Providence.

One of the testimony was given that it would take decades for us to uh create the number of units for the City of Providence to catch up.

And I don't uh it was just the number was was I think it was like 90 90 years or something like that.

I want to hear what is that number from you, if if if if there is a number, how many years would we need to get those units online and therefore impacting the rental uh impact on the residents of Providence, in your opinion.

So Mr.

Chairman, members of the committee, members of the council, um, while I'm aware of that testimony or something to that effect was given, um, I certainly would not be the content knowledge expert in that area, but practicality suggests that once you identify the number of underdeveloped units that exist, whatever that number is to support a city the size of province and its unhoused needs or its needs to stabilize housing.

Um then it goes by product availability, construction timeline, construction labor availability, and how many units can be produced within regulations that are safe and viable housing.

And I'm certainly not the expert in that area, but one could guess that that's the proximate way of approaching how long would it take to build another supply of housing, whether it's 100 or 1000, and that would be that would determine that.

But I certainly think then that that can be obtained once you know the basics of that, you know, something estimate on that.

Similar similarly, I think I would have to defer uh the the question to people who know more about what the capacity uh is of private investors and and what the capacity is of the city, for example, to uh to streamline uh things like permitting.

But um I guess I guess what I would leave you uh leave you with is um you know what the market does well, what what markets do well is provide price signals that allow um every seller to find a buyer, right?

People who have something to sell, you bring it to the market.

If there are uh too many buyers, the price goes up.

If there are not enough buyers, the price goes down.

The mechanism of supply and demand is essentially the mechanism that allows every seller to find a buyer.

The problem that you face that we all face, is that that's not what we want in the housing market.

I mean, we want every seller to find a buyer, but more important, we want every buyer to be able to find a seller.

And that is actually not what uncontrolled markets do.

And that's uh that's something that that's something that the the world has struggled with for uh you know for a number of years, there aren't there are not there are not uh really excellent answers for how you get there, but it is fairly clear that the that the market uh left alone does essentially the opposite of what you need uh for a uh a safe and well-housed population where where you need all the buyers to be able to find an appropriate seller.

Uh Consumer Royus was a question.

Thank you, Chair.

I'm gonna I'd like to try to ask both of you to respond to this feedback loop in my brain.

So bear with me.

Um there is which I actually subscribe to, there is a view that increased supply uh of housing would bring down the prices of a rent.

Um I generally agree with that.

Um I guess also in my brain, I'm wondering if there's a few drivers to home values.

I think supply is a big driver, also rent rental income.

I mean, well landlords could charge for rent.

Um I think the the view is that rent stabilization would bring down home values because landlords would be in theory prevented from ROIs, you know, uh uh a sufficient way of uh return on their investment.

So I guess the question I I guess the questions I have in my mind is uh um if we as a city increase the housing stock and it's sufficient enough to meet demand in theory, right?

Because I don't think it's gonna happen overnight.

Um and once we've increased the supply, therefore breaking down rents.

And I say this because I know the administration's stance is we need to increase supply.

I think everyone here agrees, but wouldn't that also impact home values?

So what if we've increased the supply to such an extent where we need it to be to get ourselves out of this housing crisis?

Wouldn't home values stabilize or drop.

If I may, so I believe it would do the opposite.

Increasing the supply would add additional units of housing, therefore housing stock would add more value to the tax levy, even if the existing properties along with the new additions saw a lower market price because the demand for rental property rental price has now shifted downward because landlords would have a harder time getting a higher rent because there are plenty of units available that the tenant renter could be a little more choosy about that if you will in any neighborhood.

So to your point, I do think despite the fact that it could have an overall impact on all values declining, there would be more properties to sustain new value that would support that.

I do think that that's somewhat unofficial, but I do think that would be the case.

I would agree with Mr.

Mancini that uh that increase in supply would uh almost certainly increase the value of properties on the on the tax rolls, make it spreading that burden uh uh more broadly to more uh to more owners.

Um and I agree too that it would an the owner of an individual property would see their the value of their property decline uh as you say because of the rents uh because of the potential decline in rents that they would see.

And and so to some extent, I think that that might have uh the same impact on those on those uh owners as the rent stabilization ordinance would any further questions.

My colleagues any questions from our panelists.

Thank you very much for your presentation.

Um I'm sure that uh if we have any further questions from this committee, we'll reach out to you.

Really appreciate uh your thoroughness within this fiscal note.

Thank you for being here.

Mr.

Larry Mancini, thank you.

Uh once again, and we'll continue to follow up with you and the policy department as uh we've stated before.

This is uh very challenging times that we're living, and you recognize that we all recognize that.

Uh we'll continue to hear from the public.

This bill is not perfect, uh, but we'll continue to ask the questions, and I really appreciate uh you and your staff uh digging in on this issue.

Thank you very much.

Thank you, Mr.

Chairman, members of the committee, madam president, members of the council.

Appreciate being here this evening.

Thank you.

Thank you very much.

Thank you.

Uh at this time, we would uh just bring out any comments or any questions that we may have, perhaps of even uh the prime sponsor, if she would like it uh uh as she said, um she will be available to have uh for us to deliberate and and so far what we have as we continue to dig deeper on this issue of the rent stabilization and to make sure that it's very transparent and very uh open to the public to ensure that their voices are heard.

Many of the issues that we uh we brought and are put before us, not all city council members uh think alike, or maybe in the same page or uh supporting this bill, but uh we ensure that uh uh as we go forward with any piece of ordinance or legislation, we give the opportunity for the question and answers, and that uh we are also available to meet with constituents, but also with our main sponsors.

So at this time, Councilwoman Shelley Peterson, yes.

I guess I'm going first.

Um well, thank you very much for the opportunity to speak.

I um I know that I've individually talked with uh council president and some of the supporters and sponsors of this bill as is, and I've also talked quite a bit to renters in my neighborhood, um organizations that are actively in support or oppose and landlords as well.

Um I speak I speak from the position of continuing to remain undecided, and there's a variety of reasons for it.

Um and I want to be very clear that undecided does not mean not supportive or opposed.

Um there's a lot of implications as written that this potentially imposes on the ward, and I want to make sure that those are put on record in this conversation.

Um there's a lot there's a lot of nuance to what we're trying to do here.

And I do want to say before I get into the nitty-gritty of what I'm trying to speak on, um, I don't think any of us can deny the fact that there is an affordability crisis in our city.

Hands down, that is probably number one when we're continuing to talk with our neighbors about what's going on.

Um I live in a neighborhood and I represent a neighborhood that has been consistently uh gentrified by student housing, which is not housing that is supportive of families in the neighborhood.

My neighborhood has been pretty consistently um street by street, for lack of a better word, gentrified into something that is not something to support family living or even uh opportunity for families to thrive in our neighborhood.

The areas of Smith Hill and Elmhurst and Wanscuck have been pretty consistently um you know purchased uh the properties have been purchased for um student housing because there's a prop, there's a college that sit resides right in the middle of what where the ward is.

Now, as written, one of my concerns is uh the exemption component of this, where um new construction has the opportunity for exemption up to 15 years, and I understand all of the reasons why we should do it.

I I am I'm aware and I'm supportive.

However, in ward 14, as the business models run, this would actually be this would actually hurt.

Um we have large corporate landlords that have pretty consistently taken um a lot of the multifamily units, non-owner occupied multifamily units in our in our neighborhood, and the business model is very proactively purchasing a single family home to then knock it down to then put up a multifamily unit that is not going to of build affordable housing, it's not going to build family housing, it's not going to anything that we see as something that is outside of the benefit of receiving tax benefit from it.

Um it's not supporting the community in any other way.

And that's a real concern for me because the business model is literally to knock down and build something bigger.

Um we have seen that some of these corporate landlords make approximately a million dollars a month just on the properties that they have in my ward alone.

And as the business model continues to maintain itself that way, we would see and we've seen because this is continuing to happen even as we speak, that they would take the opportunity to do exactly to maintain their business model, and they can because they have the resources to do so.

So, you know, I'm an advocate of trying to regulate in some capacity what we can do to help stabilize our our our city, uh, the you know the affordability that we have here.

I am absolutely supportive.

What I don't understand, what I don't believe that this would do, specifically in my ward, would be to help in that way.

I think that what it would do would be to continue the business's usual model that's happening in ward 14, and um we'd see a lot more properties go because they're able to afford a much higher value, um, a much higher purchase price to owners in the neighborhood.

And you know, for a variety of reasons, our neighbors are leaving, whether it's affordability, whether it's not wanting to deal with the quality of life issues that come with living abutting student housing.

And those are very real implications for the neighbors in my ward.

And this is a much more holistic piece of what I'm trying to, where I'm trying to go with this, is that I while stability is important, affordability is important, those are key things that we should be focusing on all the time for our city and our residents.

The reality is is that our businesses are closing left and right, and the gig economy that so many of our constituents and our residents utilize to be able to sustain themselves, it's it's kind of it's it's faltering.

Our restaurants are closing left and right, our bars are closing left and right, and while we can tout that we've been successful in certain ways, we can see that the vitality of our small businesses is decimated in many of our neighborhoods.

And I will again raise my hand and say that in Ward 14, you don't have as much of a thriving small business economy as you have as you do in other in other locations.

And so that's a very real thing that we need to be doing, not just to be able to rent this ordinance is just a small piece of in general what I think we need to be doing to support our neighbors.

It has so much more to do with mobilizing multiple pieces for for neighbors, whether they're um you know, in affordable housing currently, looking to save to buy that first home in the city, or trying to maintain so that they don't, you know, trying to maintain the pro the rent that they have so and and and hopefully be able to stay in there the next coming year.

It's really important that we start utilizing our our our space, this chamber, to actively um recognize that this is not just not the end all fix-all of what the what's gonna happen in the city or what the city needs.

Our neighbors are leaving, the families are leaving the city for a variety of reasons, and the number one is because it's not affordable anymore.

So it's not just a rental um, you know, a housing issue, it's it's it's an economy issue, it's a development issue, it's a workforce uh opportunity issue, and we really need to focus in on highlighting that those are things that need to get done as well.

And this is the last one that I have is um uh also kind of is a part of this continued conversation.

And that in addition to all of the things that I've just talked about, the other component to all of this for me revolves around the smaller landlord that I want to make sure that we are able to maintain.

It kind of goes back to the first point that I that I was making earlier, is that in my neighborhood, and I'll give you just a very perfect example, the last house that sold in a student housing, in the I'll and I say this in because it's very important to highlight that uh this point.

Um at the end of January, there was a home that was sold for 930,000.

I'm sorry, $950,000.

It was a 1,200 square foot home with a one, it's one and a half lots.

It's right in a central location where they're trying to continue to expand student housing, but a family trying to move into the city could absolutely never afford $950,000.

Um, you know, this is something that uh the corporate landlords in in my neighborhood are well aware of.

They can afford to give these higher values to people that are trying to sell, and I do genuinely worry about the smaller uh landlord that really just maintains their one or two properties to be able to sustain their opportunity for generational wealth or whatever it might be, but they're also preyed on by these larger corporate landlords that continue to do a lot of this, and that's an important thing to highlight as well.

Um, I think a lot of the conversation and the narrative around what we're doing here often comes into this very um black and white.

You're a homeowner and you're a landlord, so you you know, you have a lot more opportunity than somebody else does, and I think by right, there's an opportunity to have a conversation here about just how much it does actually cost to be a landlord.

I can I remember um an a landlord locally was telling me that to renovate his unit, it was going to cost him 27,000.

And that's a very real implication as to what they actually could put forward as their increase for their property um when coming in front of the the rent board.

So there's a lot of things here that I still think that we need to really understand, and it's the reason why I've been um adamant about making sure that people are aware of the reasons why um staying um neutral to until we find a way to answer a lot of these questions, not only for our renters but also for our landlords is really important.

Um I'll stop there because I could keep going forever and ever and ever.

Thanks.

Thank you, Councilman Sanchez.

Thank you, Mr.

Chairman.

And just I guess a question for you first, Chairman.

Before we continue, is the purpose of this meeting to each of us um just put out our our individual thoughts, or is the purpose to have like a conversation?

So like mention so I'm asking because uh you know, councilwoman Peterson brought up some good points.

Um, but I would have some like clarifying questions for like some of her comments.

So is the purpose to like have a healthy dialogue in between us as a committee, or or just for us to go down our our bullet points and and share those concerns, comments, questions.

Yeah, I mean, uh the purpose of this meeting was to hear from uh the panelists that we invited, uh obviously the main sponsor if you had any questions, but also uh just reflecting on the testimony that we received, and if you had any uh clarification that you needed to um ask uh the panelists to do so.

Uh we will continue to have uh these dialogues um among one another, but at the same time we're gonna have uh two more additional listening sessions.

Uh and in addition, once we also provide uh an amendments to this, then we can really have another public hearing and um most likely go on to um hopefully answer most of the questions uh that we that we may have.

Uh and then to be able to do so.

Um but if you want to do that, that'd be great.

Thank you, Mr.

Chairman.

Um so no, so no, obviously, very uh healthy dialogue.

Uh I I guess like the question would go to the primary sponsor.

Um as you mentioned, council president at the beginning, uh the the intention around this ordinance is to stabilize future rents.

In your opinion, because I'll I'll just say first of all, I I don't envy any of my colleagues that represent uh any uh major like student housing areas because uh is a difficult task for for many reasons.

Um but I I just don't see this ordinance uh necessarily addressing any any student housing concerns because that's not the intention um unless I'm I'm misunderstood.

Is there anything that we could do um in this ordinance to maybe address some of the student housing concerns?

And yeah, of course it's to be fair and to to be completely fair, neither landlord that I'm well, I'm sorry, I shouldn't say that both of the landlords that I'm the biggest landlords in my particular neighborhood, one does exclusive student housing, the other one does not.

So the implication of yes, we have and just so for um transparency, I have put forward um a several um student housing policies aimed at trying to um which I fully support.

Thank you, thank you very much.

Um aimed at trying to rectify the decades old issues of the continuing expansion of what it is, but there's um you know, it with everything it takes time.

We want it to be very community focused when we did the work um to create those policies, and um we're we're going to be able to see the remaining few in the next few months.

Um, but so one of them, yes, fully exclusive, the other one, some some student housing, but not not everything.

So when I talk about what it what it means in my specific ward, some of those some of the um some of the landlords that are there are not just building for that.

Um either way, do I don't necessarily know that I kind of agree with them to have market rate after 15 years.

Like it's they're gonna be able to continue their same business model, and that doesn't help the ward that I'm trying to represent.

So I mean, just lastly, uh I mean I don't know if the sponsor has anything to add.

Um, obviously more than welcome.

Um but the the point I was trying to get to is um I don't think there's anything that we could do in this ordinance uh that's enacting rent civilization citywide uh to unfortunately stop the the problem that that that you're bringing up, which is it is a problem.

I think it's uh very important to to validate that.

Um, but just trying to like loop us back in and in in the full intention and and that's the honest uh reality that we have to share, uh that we have been sharing with our constituents and and continue to share.

That is unfortunately um, you know, while we do appreciate the community organizing around freezing rents, that's not something um in our you know, legal authority or constitution.

What we can do um is is having the conversation that we're having now, and and that's stabilizing uh future rents um going forward.

Thank you.

Thank you, Consumer.

If I could uh continue with my regular remarks okay, I think before we continue.

Yeah, and I and I would encourage also um individually if you have any other uh questions to the sponsor, but also us to have those conversations so that way uh as we have those listening sessions that we can propose or come forward with um how to uh best improve this uh ordinance.

Uh again, we keep saying that it it's it's a unique ordinance.

Uh that's why I asked the question in terms of you know, is it can you compare with other with other state?

I think we're we're going forward with with something that is need based in our city, and so I would encourage that.

Yeah, no, absolutely.

Um obviously a little biased, but I'll definitely give a huge shout out to our policy team, Aaron, um, especially our deputy policy director, Miguel.

Um I've have read a lot of different rent stabilization ordinances uh across the world, not just the US.

And I think ours um definitely, you know, the way we're starting it off is one of the most comprehensive um detail-oriented, thought out uh rent civilization ordinances that has ever uh come across a public body.

Um and this is just saying it as a starting point.

Obviously, you know, we're taking feedback and amendments, but a lot of the questions that have been raised uh so far, or you know, some of the talking points that our friend uh AI uh brings up are addressed in in this ordinance.

And and I think that's uh a huge uh first step while we open up this conversation.

Um and then secondly, what I always do um or try to do when when talking about legislation, and especially this piece of legislation is is grounded back to the the human uh standpoint or or the human starting point.

And and you know, we talk about cost, um the the finances, um, which is obviously very important.

Um but the cost of of not addressing the crisis is human lives, and and I don't think we'll ever put a dollar amount uh on a human lives here in in Providence as elected officials, and I mean we we've all seen it for the past few winters.

Um our neighbors are are literally freezing to death.

And while enacting this stabilization ordinance might not prevent uh a Providence resident from ever freezing to death, it's definitely gonna move us in the right direction to minimize that reality.

Um it's been said, I mean, even one of my my colleagues uh mentioned a lot of the things that we have been doing uh to encourage development and supply um when we first introduced it.

Um and even so, I mean, this is something we we've all been honest about is that this is a multi-prong approach, and the reality is it's gonna be a few more years until we actually create uh a city that allows our residents to live in dignity, and and I mean, we we talk about different challenges and you know, some of the the harsh crises that a lot of our residents live in.

Um there I don't there's isn't one greater than not having uh safe warm affordable roof over our head, and and while that's something we all agree on, and there's not one person in in this room that currently uh doesn't have that.

And that's something we have to remind ourselves.

All of us in in these seats, you know, obviously we come from different backgrounds, you know, a lot of us have inspiring stories and you know, hardships that we have overcome, but where we are right now is completely different from the reality of a lot of our neighbors and the voices that I try to elevate and and bring uh to these spaces, uh, because unfortunately a lot of them don't have the the privilege to do so.

Um so lastly, I mean I I'm just so glad that we're having this dialogue in a public body for the first time ever.

Um I I think that's uh a huge first step.

And I uh encourage to folks to continue having these dialogues because I you know am proud of being uh a co-sponsor and introducing it and getting us to this point, but I I I really put my myself aside.

I I could care less um of having you know my name attached to something.

Um what I truly want at the end of the day is you know, I'm I'm 27 years old right now.

Um I want to be 35, 37, look back or look outside and live in a providence that folks are able to call home.

Um especially folks that have called Providence home for for decades.

Um because that's the harsh reality is that a lot of families that you know have been here that have called Providence home are being displaced, and and that's happening on a daily basis in our city, and we have the opportunity to add another tool.

You know, we we all say we we have multiple tools and then toolbox, and that's what this is.

This is another tool to create uh a city that is for everyone.

Thank you, Chairman.

Thank you.

What agreed Conservas?

And uh cheer, thank you.

I just uh some thoughts are swirling in my mind here that um I've been hearing from all types of um folks, renters and landlords.

Um I think that a few uh one central point I want to address publicly is uh the the right of fair return.

And I I guess I want to say this again to the to the folks out there who are listening.

Uh every cost that a landlord has to uh take on, whether it's through a maintenance, uh increases home repairs, utility increases, property tax increases, that is all accounted for in this ordinance.

The only difference that we're asking is for you to stand before a board and show proof of that increase.

Is that they folks call a rent board anti-American, and I happen to think it's actually a very democratic tool.

You know, you look at every other industry, you know, um it's regulated, you know, utility companies have to go before the state's PUC um uh PUC to get rates approved.

They have to be fair and reasonable.

I would argue whenever Rhode Island NDG increases utility rates, it's not fair and reasonable, but that's another point.

But they have to go before a board to get approval.

Um kind of zooming out, I would also say that homeowners in provenance um have rent stabilization right now, it's called the levy.

Cities and towns cannot raise the levy unless it's there's an appeal um past uh four percent.

And so renters don't have that option.

Um and so I I would just leave everyone with those uh two thoughts.

Thank you very much.

Conser president, would you like to say a few words?

No, I just uh will say, well, one I do I do think there's likely a path to talk directly about student housing and make sure that it's not being impacted um in a way.

So yes, apparently I do have something to say.

But mostly I just want to thank you all uh so much for the earnest conversation and and um uh uh the nice start to the to the public process here.

Thank you.

Thank you.

Um as we conclude, I I just want to emphasize to those who uh have continuously worked on this, and we've been talking about this for almost two years, and especially for me.

It's uh it's policy, it's also very personal, as uh councilman Sanchez just indicated growing up here, and but I also know what rent control is uh when we look at New York and other places, and those type of rent controls is very difficult, and I wouldn't be in favor of those.

But I think what's important is that as I have grown up here now, being a grandfather, is to see what kind of providence we're actually building.

This is for a generation, and how a 27-year-old looking forward to when he's 35 and has a couple of kids, is he gonna be able to live here?

That's the question that we I have for my grandchildren and even for my kids.

I think that uh those of us who continue to develop policy or legislation, especially here in the city of Providence.

We get to see those who have been involved, how through a system sometimes the public doesn't get too much input into it.

This is unique, and more so over the years, and I am privileged to serve with so many people that are passionate from the policy, from the uh from the policy office, from the administration, that we're all can agree that we're going through harsh economic challenges in our city, needing more housing, needing more affordability for for our for our city, and so I ask again uh those who are here but also that are hearing our message is that you still have an opportunity to write to us to read the the the piece of legislation on the rent stabilization and know the difference between rent control and rent stabilization.

They could go to our website, the city council.providenceri.org, and and uh gov I'll repeat that council.providenceri.gov to ensure that your your voice is heard.

We're gonna continue to hear um from our constituency.

We'll share with you that the next um the next time we're going to be there's two more listening sessions, which is uh March 11th at 5 30 at the South Side Listening Session at the South Side Cultural Center, myself and Councilwoman Mary K.

Harris.

Um and then the other one is uh March 18th at 6 p.m.

at the Federal Hill, uh a West End listening session at the Bell Street Chapel, and that will be by uh President uh Rachel Miller.

We will continue to look at what other amendments we can put into this.

This will be a unique rent stabilization ordinance that it's very flexible to ensure that it is another tool that we can have at the city of Providence, and I encourage my colleagues to talk to one another and see how we can improve this along with our policy um team.

So without any further comments, um I'd like a motion to adjourn.

So moved.

Just kidding.

Oh can you make the motion to continue?

Can do I have to oh, I'll make the motion to continue.

There is a motion to continue.

Is there a second?

Second by uh Councilman Sanchez.

Any discussion?

All those in favor?

Aye.

The motion carries.

Meeting continues.