No More Broker Fees in Massachusetts!

So, we have to talk about broker fees, right?

To be clear, I'm referencing tenant-paid fees (typically in the amount of one month's rent) to lease an apartment through a broker who was hired by the landlord.  Objective reporting is linked in the "Local News" section down below.

But here is my editorialization, with some context first.  Eight years ago, I started my career at a brokerage in Allston/Brighton that focused primarily on rentals.  I learned the ropes directly from my broker, and he provided an excellent education on the ins-and-outs of these transactions.  As I gained experience, it became clear that I didn't need to depend on him for leads and that I could successfully forge my own relationships with landlords not currently working with an agent.  The next step was realizing that not only was the real money in buying and selling properties with these landlords, but the quality of life in doing those types of transactions was way higher than trying to get 23-year-olds to keep appointments to see third-floor walk-ups in the middle of July.  And in gaining sales experience with investors, I was able to earn the confidence of more traditional first-time homebuyers, move-up buyers, and downsizers.  That's, in a nutshell, how we got here today.

Let me be clear, although sometimes it's tempting, I'm not going to abandon my landlords.  I had always feared the day when tenants would no longer be able to pay the fee.  I figured that landlords would view me as obsolete, abandon me, and would just do it on their own.  I know now that the landlords who valued my services as a rental agent very much so do still value my services as a rental agent.  Are they thrilled that they'll have to cover the cost come August 1 (note: this may not actually be the case given some of the language choices in the bill) ?  Of course not, but the market will adjust.  I believe rents will go up.  Should they?  Yes.  Renting an apartment is a ton of work, and brokers doing this work need to be compensated appropriately.  If landlords are now taking on a one month cost, it's naive to think they won't be expecting something in return.

And speaking of "should"s, the landlord absolutely should be paying the broker they hire.  It always should have been this way.  In my humble opinion, anyone who says differently is being a bit disingenuous.  But there has to be a give and take here.  This is how markets work.  The governor wants to pretend that eliminating broker fees will increase affordability for renters...and I'm just not so sure that's the case.

What will increase affordability for renters is increasing inventory.  And not just that of "luxury" buildings with bait-and-switch low rent in year one/one month payment to move-in/no broker fee promotions that are followed ten months later with a lease renewal that's hundreds of dollars higher per month.  We need inventory that makes sense for your mom and pop/armchair/average joe/insert-cliche-here amateur investor to purchase and provide a solid, decent, attainable home for tenants.  And we need it badly.