I rent an apartment in Boston, and like so many others, I’ve seen my rent skyrocket. Over the past two years, I’ve experienced an increase of 20 percent. Naturally, I started looking elsewhere. With the hope of more affordable options, I set my eyes on Somerville and Cambridge. But instead I found a headache all too familiar to Greater Boston renters: broker fees.
After countless hours spent on Zillow, Redfin and Trulia, I was beginning to suspect that these platforms were doing their best to keep their broker-fee-free apartments hidden while pushing the apartments with that extra monetization scheme. Eventually, I got lucky and found an apartment without a broker fee. But luck shouldn’t play any part when thousands of dollars are on the line for tenants.
As part of her plan to lower housing costs in Massachusetts, governor Maura Healey announced that as of Friday, tenant-paid broker fees are banned across the state. For many overburdened tenants, this represents well overdue relief. But after speaking with the brokers and landlords of Camberville, no one knows exactly what will happen next.
At Cambridge Sage Real Estate, which handles more than 200 local rentals every year, owner Sage Jankowitz says that from what has been heard from the landlords it works with, rent will go up. Many of these landlords plan to roll the costs of their new broker fees into their tenants’ rent. Can the market absorb higher monthly rent costs when renters’ budgets are already stretched so thin? Sage says, “We’ll see.”
Richard Anderson, a landlord-broker with Grayson Partners, says he plans to lower his broker fee rates to stay competitive in this new renting landscape.
Some landlords highlight the value that their brokers bring. One, a former schoolteacher who now rents out a couple of two-family homes, appreciates her broker’s ability to suss out potential problem renters, helping her to avoid the “jerks.” Her broker also provides her with a tenant credit screening service, ensuring her renters will be able to afford the leases they sign. She worries that this ban might interfere with her ability to continue to work with brokers.
Another, a landlord and MIT entrepreneur, would rather circumvent the hassle of direct tenant inquiries and potential no-shows by working with brokers. She’s open to the compromise of splitting broker fees with tenants. But with the expected rise in rent rates after this ban, she admits that she might now see more profit from tenant brokers.
While the announcement of the broker fee ban might seem like an irrefutable win for tenants, the reality might prove more complicated. Whether the ban leads to lasting change or another round of broker workarounds will depend on how both sides of the market adapt.
As a serial entrepreneur myself, I often find myself thinking about market solutions to the economic problems I encounter. In this case, my mind goes to transparency and affordability – how can we make those concepts work in practice? The landlords I’ve spoken to outline the challenges clearly: It should be easier for landlords to list their properties without brokers or the risks of spam, bots or no-show applicants. And from my experience as a renter, tenants shouldn’t be left alone to navigate a system full of deceptive hidden fees and exorbitant costs.
Change is here. Soon we will all see the consequences of this new policy taking effect. But if we don’t rethink the incentives of the rental market, tenants may end up paying the same costs in a different form. Our community has a chance to take the lead at this critical moment by focusing on transparency. All of us in the housing market – renters, landlords and the people and platforms that connect them – need to seriously consider how we can create a sustainable system that benefits everyone. I’ve started a project and am working with interested parties to reinvent the rental process.
Hopefully the future of renting in Greater Boston will finally change for the better, bringing in new residents to the best city in the world. Go Sox!
Edward Armstrong
The writer is a renter coming to Ball Square, Somerville, who is collaborating with local landlords and other renters on a community project exploring alternative models for the apartment market.
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