Would Boston end broker fees for renters, now that New York City is about to?
BOSTON - If you want to move into an apartment in Boston, prepare to write a check for more than $10,000 first.
That's because you need first and last month's rent, the security deposit and, in many cases, a broker's fee up front. Boston might soon be the only major U.S. city where that fee is part of the deal, now that New York City is on the verge of getting rid of it.
Earlier this week, the New York City Council passed a bill that shifts the burden of broker's fees to landlords. If the mayor signs it, it becomes law.
Boston broker fees
In Boston, 65-percent of residents rent their homes, so broker's fees are still an issue.
"I think brokers fees are a hassle to pay, out of pocket, up front," Boston renter Jonas Bucciarelli told WBZ-TV. "If I were to move I would try to look for a place that either doesn't charge them, maybe it has a small-time landlord."
"It definitely incentivized me to stay in the same building, because I didn't want to have to pay again," said renter Spencer Copeland.
Massachusetts lawmakers toyed with taking up this issue last summer but it fell flat. Not everyone agrees that getting rid of broker fees would solve the problem.
Raise the rent?
"If a landlord's forced to pay the commission, they'll probably just raise their rent to cover that difference," said Demetrios Salpoglou, the CEO of BostonPads.com, the largest real estate portal in the Boston area.
He said building more housing would better ease the strain on supply and demand, which is driving up prices.
"It's misguided in a sense. I think more effort should be put on supply side, like focusing on zoning reform and other measures that bring ample supply to cities that need housing that have low vacancy rates," Salpoglou told WBZ.