First New York, now Boston?
Following New York’s example, Boston is considering eliminating its rental broker fees, the Boston Herald reported. Mayor Martin Walsh announced he would form a working group with a variety of stakeholders to study rental fees. In Boston, broker’s fees are often the equivalent of one month’s rent, and come in addition to paying a security deposit and first and last months’ rent upfront.
Like other major cities, Boston is facing a housing affordability crisis. The median rent in the city for a one-bedroom apartment is $2,450, although the Boston mayor credited a slowing of year-over-year increases to an increase in housing production.
The Boston Association of Realtors has panned the move, saying that it will ultimately only increase renter’s fees as landlords bake in the added costs by upping rent payments.
On Tuesday, New York’s Department of State issued a surprise guidance — an interpretation of the state’s new rent laws — that reversed the long-standing tenant-pays-broker fee system. Until now, it had cost nothing for landlords to retain an agent because the tenant had to foot the bill. (If a tenant hires their own broker, they will still pay the fee.) Similar to talk of increased rents in Boston, landlords and owners representatives in New York have suggested that rents will increase in order recoup the new costs.
[Boston Herald] — Georgia Kromrei