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Healey adds to growing broker fee opposition on Beacon Hill and Boston City Council
State lawmakers and local officials want to see a new law stipulating that landlords who hire brokers be responsible for paying their fees.
Gov. Maura Healey said Tuesday that she supports the elimination of tenant-paid broker fees, which renters often have to pay when signing a lease on top of first and last month’s rent and a security deposit. Opposition to the fees is growing at the state and local level, with Healey’s comments only adding momentum.
During an appearance of GBH’s “Boston Public Radio,” Healey was asked by a listener about broker fees and how they could drive more people out of Massachusetts due to affordability concerns.
“I think they should be abolished. I think they should go away. I totally support that and support taking action to make that happen,” Healey said.
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Broker fees are one-time, upfront payments that usually amount to about one month’s rent. Renters in the Boston area often end up paying the fees to brokers they have never met and that did minimal work in connecting them with their new apartment and its landlord. Despite Healey using the word “abolish,” most efforts right now center on simply making landlords pay broker fees when it is the landlord who hires the broker. This appears to be what the governor meant.
“The landlord can make their own arrangements,” Healey on GBH said when asked about that distinction.
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Healey constantly mentions the state’s housing affordability crisis in interviews, and folded the question about broker fees into a larger defense of her actions in office to bring prices down for residents, like a recently-expanded child tax credit.
In November, New York City Council voted to make landlords responsible for broker fees for most leases, prompting renewed discussion of the topic amongst Massachusetts officials.
Boston, one of the most expensive rental markets in the country, is also one of the last major markets where prospective tenants commonly have to pay broker fees. With the addition of first month’s rent, last month’s rent, and a security deposit, renters frequently have to come up with the equivalent of four month’s rent up front to secure an apartment.
Last year, the state Senate included a policy requiring landlords pay broker fees rather than tenants in a housing policy bill. But House negotiators did not get on board, and the policy did not make it to Healey’s desk, State House News Service reported.
Senate President Karen Spilka said during her inaugural address last week that the Senate will “try again to shift the burden of brokers’ fees from renters.”
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State Rep. Tackey Chan of Quincy said he helped file legislation Monday that would specify that it is the responsibility of the party, either the landlord or the tenant, that hired the broker to pay their fee. Last month, The Boston Globe’s editorial board published a piece arguing that tenants should not be forced to pay broker fees. Chan, Rep. Paul Schmid of Westport, and Rep. Erika Uyterhoeven of Somerville agreed in a follow-up letter to the editor.
“In an already challenging housing market, tacking this fee onto the upfront rental cost keeps people trapped in poor living situations, prevents turnover in housing stock, and prevents low-income families, students, and seniors on fixed incomes from accessing the market,” they wrote.
Locally, Boston City Council is set to discuss the topic Wednesday afternoon. Council President Ruthzee Louijeune and Councilor Liz Breadon filed a home rule petition that would make the party responsible for hiring the broker also responsible for paying their fee.
Greater Boston’s housing shortage enables property owners to pass broker fees onto tenants, worsening inequities around who can access housing, the councilors wrote. They referenced studies that found “systemic housing discrimination by real estate brokers.” The home rule petition would still need to win approval on Beacon Hill if it is passed by City Council.
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“We’ll take a look at all of this,” Healey said. “I recognize that housing costs are high and we’ve got to do everything we can to drive costs down.”
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