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This past summer, Massachusetts joined New York City in prohibiting apartment landlords from passing on brokers’ fees to renters if they have not hired brokers themselves.
So far at least, the rental markets in Massachusetts’ largest city, Boston, and the surrounding area appear to have experienced little change since the regulation’s implementation.
Massachusetts’ state-wide law went into effect on Aug. 1, about two months after the Big Apple’s Fairness in Apartment Rental Expenses (FARE) Act also went into effect. Massachusetts’ measure was adopted in July, whereas New York’s was adopted in November 2024.
In Boston, the average rent on Dec. 3 was $3,393, up just 0.8 percent compared to 90 days ago and 0.6 percent year over year, per Boston Pads. In the Greater Boston Area, the average rent across all apartment types was $3,214 as of Dec. 3, down nearly 1 percent compared to 90 days ago and about 0.7 percent lower than they were last year.
As of Dec. 1, there were 2,064 non-luxury listings in the Greater Boston Area, according to Boston Pads. A year earlier, there were 1,095. In the City of Boston, there were 1,317 non-luxury listings on the market on Dec. 3 — 44 percent higher year over year.
However, correlation is not causation, and Boston has had other pressures on its rental market. One main source stems from immigration concerns and difficulties.
“There’s underlying issues with the overall health of the economy in Massachusetts. Specifically, there were a ton of international students that didn’t show up,” said Demetrios Salpoglou, CEO of Boston Pads. “It’s going to have an impact.”
The vacancy rates in Boston and the surrounding region have risen year over year, according to Boston Pads. In the Greater Boston Area, the rate was 1.5 percent, a 33 percent increase. And in the City of Boston, the rate was 1.3 percent, about 29 percent higher compared to the same time last year.
Many landlords are cutting prices and offering concessions in light of softening demand. Research funding cuts, cooling venture capital funds and residents leaving the city and surrounding towns also have not helped.
It is also expensive to develop apartments in Boston and the surrounding region, Salpoglou noted.
“It’s incredibly hard to do a deal that pencils,” he said.
Meanwhile, in New York City, the ripple effects of the FARE Act have been stronger.
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In each month since New York City’s FARE Act’s implementation, rental inventory fell in the Big Apple, according to data from StreetEasy analyzed by The Real Deal. The median rent in the city also shot up. It was 8.2 percent higher in October compared to the year before, shortly before the city council adopted the measure.
Proponents of NYC’s legislation have pointed to other factors to explain these changes, such as increased competition for apartments.