Brokers are usually hired by landlords, but in Massachusetts, tenants often end up paying for the service. A group of city councilors in the Bay State’s most expensive rental markets are banding together to put the bill back in landlords’ pockets, likely through home rule petitions.
Since New York City Council voted this month to shift the burden onto landlords, Massachusetts remains the only state where renter-paid broker fees is common practice. Councilors in Boston, Cambridge, then Somerville each recently filed hearing orders in their respective municipalities to get the cost of brokers put on those who hire them.
Bonnie Jin is a concerned renter and activist who saw the news out of New York, and reached out to councilors in the three cities.
“These were three city councilors that I knew were working on housing justice in a way that aligned with my values and were really excited to push for this,” said Jin.
Jin ended up making a video with Boston City Councilor Enrique Pepén, Cambridge City Councilor Jivan Sobrinho-Wheeler and Somerville City Councilor Willie Burnley Jr. to promote their efforts.
In Boston, Pepén was already working on a hearing order to look at how tenants can stop paying broker fees for units landlords hired to show them. He heard from Sobrinho-Wheeler soon after.
“I think that it makes sense to do it at a regional level. I think that we have a very similar market at the moment, so why not do it? All of us, at the same time?” said Pepén. He said since the New York decision, he’s heard from constituents ask for him to push for this.
Sobrinho-Wheeler proposed a similar measure this week, which passed on Wednesday.
In Somerville, Councilor Willie Burnley Jr. filed an order to have the the city solicitor draft a home rule petition to prohibit the forced imposition of brokers’ fees onto renters.
“It is my view that if you hire someone, you should have to pay those people. I think that’s a pretty standard and simple belief in our society,” said Burnley Jr. “Passing off those fees to someone else — from a landlord to a tenant who didn’t sign up for that — I think it’s just it’s an unethical business practice that we should end.”
It’s the first time Boston area officials have taken a regional approach on broker fees, but councilors think their efforts reaching the State House at a similar time could have impact on passage in that body. Hearings on a city-level will be scheduled in the coming months for residents to weigh in.
Burnley Jr. said cities and towns filed home rule petitions related to rent control en masse, and sent them to the State House, and a similar approach makes sense for broker fees. “We try to capitalize on momentum anywhere — whether that’s in New York, Boston, on the other side of the country — when it comes to legislative innovation that we can pursue.”
Home rule petitions from municipalities have to be approved by the Legislature. There is at least one from Western Massachusetts, led by Rep. Lindsay Sabadosa and Sen. Joanne Comerford that is awaiting consideration.
About 65% of Boston residents are renters, and more than half put at least 30% of their income toward rent, according to the city. In Cambridge, 66% of units are rented, according to the 2018-2022 American Community Survey. In Somerville, about 65% of people rent.
Jin moved back to Boston a few years ago after studying out of state, and was shocked to see move-in costs often equaling four months’ rent: first, last, security deposit and a broker fee.
“It was was listing after listing of like $1,500 times four. And I just kept thinking, 'How am I going to find this money as a student that just graduated?’” She ended up getting help from family to afford the up-front cost of moving in. “Not everyone has those resources,” Jin added. She’s since moved to Cambridge because living in her old spot in the North End was too expensive.
Since she posted the video, she’s gotten many messages from people sharing their horror stories and how they were priced out of their communities, sometimes by broker fees.
“It’s really devastating, and the video really resonated with a lot of people,” she said.
Sobrinho-Wheeler said that as a renter he empathizes with his constituents in similar situations. He personally got a rent increase and looked around for more affordable spots.
“We realized that even though there were some places that were more more affordable than our rent increase, with the brokers fee it just wouldn’t make sense to move,” he said. “Because even if it was a couple hundred dollars per month [cheaper in rent], when you add the brokers fee, we still would have lost money.”
Rental assistance toward broker fees is not available in Cambridge, according to the city. The Boston Housing Authority offers programs to help with broker fees, but Pepén said those are directly tied to disappearing pandemic funding. Calls to Somerville’s housing agency went unanswered. One organization, Community Action Agency of Somerville, notes broker fee help in its housing assistance application form.
Sobrinho-Wheeler also noted that beyond the fee itself, it’s strange to pay for a service when some renters never even meet their broker — something he has experienced himself.
Jade Brown, a professor in the civil litigation program at Boston University School of Law, said the problem is that tenants in Massachusetts often don’t have the choice to not pay a broker fee.
“I don’t know that they [brokers] are a reasonable service. I think a lot of tenants would be fine to find their own apartment, connect directly with the landlord and fill out the necessary paperwork,” Brown said.
