The Boston City Council on Wednesday overwhelmingly approved a proposal from the mayor to cap rent prices as part of an effort to address rising housing costs and prevent homelessness.

Under Mayor Michelle Wu’s proposal, known as a home rule petition, the maximum allowable annual rent increase would be based on the change in the consumer price index, plus 6%, or a maximum increase of 10% — whichever is lower. The measure also provides other rental protections, including requiring that evictions be for cause such as not paying rent.

"This is a monumental act for the City of Boston," said City Councilor Ricardo Arroyo, who supported the proposal. "I commend the mayor for moving forward with a rent stabilization plan to address what has been and is an ongoing, long-standing issue of price gouging and rent gouging and displacement of residents of the City of Boston."

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Several council members said they were moved by earlier testimony from tenants who were facing rent increases upwards of 100% in some neighborhoods. Many also spoke of getting calls from residents who complained about significant rent increases they can't afford and felt the proposal would be critical in giving these families stability.

According to the real estate company Zillow, the Boston metro area is the fifth most expensive metro area in the country. Typical rents in Boston have gone up over the past year by 8.1%.

"Boston is increasingly out of reach for a majority of our seniors, immigrant populations, families and individuals," City Councilor Gabriela Coletta said, adding that rents have increased 227% since 2011 in east Boston, which is part of her district. "Bad actors who take advantage of a bullish rental market can and do price-gouge in a way that is displacing hard-working individuals who just want to be able to live in this city and contribute to the local economy."

Tenants' rights advocates demonstrate in front of a courthouse on Jan. 13, 2021, in Boston. The Boston City Council on March 8, 2023, overwhelmingly approved a proposal from the mayor to cap rent as part of an effort to address rising prices. (WHD Photo/Michael Dwyer, File)

The proposal would also exempt owner-occupied properties with six units or fewer — including the three-family homes that dot the city’s neighborhoods. Also exempt would be any new apartment buildings built during the first 15 years after being issued a certificate of occupancy.

Modeled after measures in California and Oregon, the push for rent control in Boston is part of a growing trend nationwide. Spurred by a shortage of affordable housing and rising rental prices, advocates nationwide said rent reform is the best short-term fix to the problem.

Similar proposals aimed at stabilizing rent were approved by voters in November in Portland, Maine, and Richmond and Santa Monica in California. And on Tuesday, voters in two Vermont communities passed proposals to protect tenants from evictions without just cause. In the city of Winooski, the charter change would give the City Council the authority to provide ordinance protections for residential tenants from evictions without just cause. Essex passed a similar measure. Both charter changes have to be approved by the Legislature and governor to happen.

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Opponents, led by the real-estate industry, say rent control will lead to higher prices for tenants in housing not covered by rent caps, harm mom-and-pop landlords relying on rental income for retirement and discourage the construction of badly needed affordable housing. They have spent heavily to stop ballot initiatives, even going to court to halt them.

"We are going after an industry that has created generational wealth for the middle class in Boston. It is not easy being a landlord — especially a small landlord," said City Councilor Frank Baker, who opposed the measure over concerns it would add another layer of bureaucracy and prompt landlords to put off repairs to their buildings.

Greg Vasil, the CEO of the Greater Boston Real Estate Board, said they were "disappointed but not totally surprised" by the council vote. They now plan to take their case to state lawmakers. The proposal must still be approved by the state legislature because voters in Massachusetts approved a 1994 ballot question banning rent control statewide.

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"We look forward to promoting pro-housing policies focused on decreasing red tape, additional costs, and regulatory burdens, while increasing production as the path to overcoming the state’s affordability crisis." Vasil said in a statement.

Wu said she welcomed the opportunity to make her case to state lawmakers and argued the constituents she hears from are no different than those the state lawmakers represent.

"We all hear from the same families who are struggling to hang on in the city as prices in the grocery store go up, as prices at the pump go up, as prices in housing and rent go up," she said. "We all share an urgency in knowing that this can't stand for Boston. We can't be a place where people get pushed out from the communities that they want to continue contributing to."