Gove. Maura Healey announced Monday that she’ll include a proposal to eliminate renter-paid broker fees as an outside section in her yet-to-be-unveiled FY26 budget.
“Broker fees are an unfair cost for renters, and they should not be on the hook to pay for someone they didn’t hire,” Healey said in a statement. “We’re proud to be proposing this change that will save renters thousands of dollars — making it possible for more young people, seniors and families to stay in Massachusetts, help businesses attract the best talent, and put more money back in people’s pockets for groceries, health care, and other needs.”
Healey’s proposal would require whoever hires a broker to pay their fees rather than automatically giving that responsibility to new tenants, who currently cover them as a matter of course. The fees are typically one month’s rent, meaning they can add a significant startup cost for people renting a new home.
As Healey’s release noted, take the example of a one-bedroom apartment that rents for $2,500 per month: renters would typically pay $10,000 upfront to cover first and last month’s rent, a security deposit and a broker fee.
New York City recently approved legislation that would shift the responsibility for broker fees from tenants to landlords, and Boston, Cambridge and Somerville have all explored making a similar shift. In each of those local communities, about two-thirds of residents rent.
While Healey’s proposal could reshape the rental industry if it becomes law, it does not come at a surprise. In an appearance on GBH’s Boston Public Radio last week, Healey vigorously agreed with a caller who suggested eliminating renter-paid broker fees.
“I think they should be abolished,” she said. “I think they should go away. I totally support that, and support taking action to make that happen.”
Doug Quattrochi, the executive director of Mass. Landlords, said he preferred the contours of Healey’s proposal to possible alternatives — for example, a model used in Chicago in which landlords pay for brokers even if they are hired by renters.
“[Healey’s] model, I think a lot of people would be fine with,” Quattrochi said.
But Quattrochi also took issue with what he says is incendiary rhetoric around the broker-fee debate that casts brokers themselves as superfluous middlemen.
“When you actually hire a broker and they’re obligated to represent you, whether renter or landlord, it’s a whole different thing,” Quattrochi said. “Brokers offer equal housing opportunities, free applications. They help you put a winning application forward. They do an awful lot of work if you hire them.
”The problem that we’re trying to fix is just where the landlord consents to letting the broker basically clip a coupon for doing nothing,“ Quattrochi added. ”I think we all agree that that needs to be addressed.“
According to State House News Service, Healey’s Monday proposal was applauded by Massachusetts Senate President Karen Spilka. The Senate backed broker-fee reform in the most recent legislative session but failed to prevail over opposition in the Massachusetts House of Representatives.
”By working together, we can save residents thousands of dollars when they move, make it easier to live in the community you love, and ensure businesses have access to the talent they need to thrive,“ Spilka said, according to State House News Service.
