Boston landlords paying broker fees amid high vacancy rates

BOSTON — Could the pandemic play a role in bringing broker fees to an end in Boston? That’s what some tenant advocacy groups are hoping for as they point to a new trend of landlord-paid broker fees.

Boston renters have historically forked over an extra month’s rent to real estate brokers to secure a new apartment. The fees compensate real estate agents who act as middlemen in the housing market.

According to real estate experts, Boston renters typically pay as much as $200 million a year on broker fees. This year, things have drastically changed. The combination of high vacancy rates, record unemployment and major decline in college student population is shifting much of the power to renters.

“When you add up all the fees, it’s crazy. It’s literally like a down payment on a house,” said Kathy Brown with the Boston Tenant Coalition. “Because of the high market, people have paid them.”

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For the first time in decades in Boston, a number of landlords across the city are picking up broker fees in addition to significant price reductions and unprecedented incentives.

Earlier this year, Mayor Marty Walsh launched a working group to study broker fees and how they affect renters. Representative Mike Connolly, a Cambridge Democrat who cosponsored a rent-control bill earlier this year, is a proponent of giving municipalities the right to eliminate broker fees.

“One of the things our bill does is contemplate local regulation of various fees relating to apartment rentals,” said Rep. Connolly in a written statement to Boston 25 News. “As we move forward I expect continued efforts to do away with broker’s fees, which are actually a rarity nationwide.”

Back in February, New York passed a law banning broker fees paid by renters. That law is currently being challenged in the courts by the real estate industry.

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