Boston Multifamily Deals Rebound After Rent Control Blocked

Massachusetts’ highest court struck down a rent control ballot measure last week, ending months of uncertainty for the state’s multifamily market, per Bisnow. The Supreme Judicial Court ruled the measure unconstitutional because of a flawed religious exemption. Boston multifamily brokers say deal activity is already picking up, though sellers remain cautious.

A Ballot Measure That Stalled The Market

The rent control proposal would have capped annual rent increases at 5% or the consumer price index, whichever was lower. Exemptions applied to owner-occupied homes, buildings with four or fewer units, and properties less than 10 years old. The measure gathered enough signatures last November to qualify for a statewide ballot. That triggered a sharp pullback in multifamily investment. Groups including NAIOP and the Greater Boston Real Estate Board spent hundreds of thousands of dollars opposing the initiative. They commissioned a Tufts University Center for State Policy Analysis study projecting the measure could erase $300B in state property values. Many investors said the policy made underwriting new deals nearly impossible.

The Details

Before the ballot fight began, Massachusetts multifamily sales totaled $4.6B over the 12 months ending in June 2025, per Matthews. Sales volume then fell 40% in the first quarter of 2026 compared to the same period in 2025, according to Colliers. Colliers Research Director Jeff Myers said preliminary second quarter data pointed to further deceleration. Berkadia Managing Director Adam Dunn said confidentiality agreements and deal conversations have increased since the ruling. He expects more transactions to close in the second half of 2026.

Massachusetts Lagged The National Market

Nationally, individual multifamily sales rose 3% to $27.6B in the first quarter of 2026, according to MSCI. That divergence highlights how the ballot measure singled out Massachusetts. Boston Multifamily principal Kendin Carr said investors effectively redlined the state, demanding steep discounts or avoiding deals entirely. Some of those investors are now cautiously reentering the market. Walker & Dunlop Director of Investment Sales Maggie McFarland said recent activity has come mostly from short-term sellers acting before any new rent control push emerges.

Why It Matters

The ruling removes a major underwriting obstacle for Massachusetts multifamily deals, at least for now. Berkadia’s Dunn said the outcome benefits the investment community. But brokers and developers describe the mood as cautious optimism, not certainty. Rent control advocates have already gathered more than 124,000 signatures for a renewed push. The Builders Coalition’s Dave Madan said the fight has pushed the industry toward permanent affordability solutions. For an industry watching housing policy nationwide, Massachusetts remains a test case for how courts and voters weigh rent regulation against investment activity.

What’s Next

Rent control advocates say the SJC’s objection is easily fixable and have hinted at a new proposal as soon as 2028. Before the ruling, developers including WinnCos., The HYM Investment Group, and Lupoli Cos. had negotiated a compromise with Homes for All Massachusetts. That plan would let cities opt into local rent caps and limit increases to the consumer price index plus 5%, capped at 10%. Madan said momentum could build in the next legislative session to revisit housing affordability. Investors are watching whether that compromise, seen as more underwriteable, resurfaces.