Renters may get relief from broker's fees, but advocates say more affordable housing is needed

If you're a renter in Massachusetts, you already know the deal when it comes time to get an apartment. You need first month's rent, last month's rent, a security deposit — and often, a broker’s fee.

But soon, renters may no longer have to pay this pesky fee, which typically amounts to one month's rent.

A new policy included in the $61 billion state budget passed by lawmakers Monday requires broker’s fees to be paid by whoever hired the broker — usually the landlord. A prohibition on renter-paid broker's fees would conceivably end the longtime practice in dense areas like Boston, whose competitive rental housing market has left apartment-seekers no choice but to pay this upfront cost.

Gov. Maura Healey Wednesday said she was committed to approving the provision.

"The days of renters being forced to shell out upwards of $10,000 before they can even move into an apartment are over," Healey said in a statement, adding that "the cost of housing is already way too high in Massachusetts without adding thousands of dollars in fees for a service you didn’t hire."

Healey previously called broker's fees "unfair" to renters when she submitted her own budget proposal earlier this year.

Once approved, the new policy would go into effect Aug. 1.

Advocates say the change is a relief for renters and will save them a lot of money upfront.

"This is an important policy and this will lessen the burden on folks trying to move somewhere new or having to move somewhere new because the cost of their current housing is unaffordable," said housing attorney Mark Martinez of the Massachusetts Law Reform Institute.

But Martinez said more still needs to be done to make housing affordable — like limiting rent hikes and building more affordable homes.

Other advocates and lawmakers agree.

Carolyn Chou, the executive director of advocacy group Homes For All Massachusetts, said she's "encouraged" by the broker's fee measure, but that it's "far short" of the relief renters need. She also wants to see the state do more to prevent evictions and preserve affordable housing so it doesn't get snapped up by investors.

"We hope the State legislature will continue to act, to do more to protect tenants who are struggling month after month to pay rent, struggling to move, and struggling to stay in our state," Chou told WBUR.

State Sen. Lydia Edwards pushed for changing the policy on broker’s fees. She filed legislation on it last year, but her measure didn't make it into a final housing bond bill. Edwards said the recently-passed measure is just one important step forward to improving the state's crunched housing market.

"We are trying to build faster but more affordable spaces. That is happening," Edwards said. "But that doesn't happen as fast as nor is it creating the money in pockets that brokers fee does."

Tenants could still pay a fee if they hire a broker themselves. But, since most lower-income and early professional renters don't, and instead rely on listings posted by landlord-hired brokers, the new measure aims to ease the financial burden for many Massachusetts residents.

While the change will help renters to better afford a new place to live, brokers still play an important role in the housing market, said Greater Boston Real Estate Board CEO Greg Vasil.

"Brokers possess a deep knowledge of the markets and communities they serve, and whether it is the renter or property owner who hires them, they will continue to receive the compensation they deserve," he said in a statement.

Still, not everyone believes the new policy has enough teeth.

Doug Quattrochi, the executive director of the trade association Mass Landlords, said state law already limits what landlords can require tenants to pay in order to move in. It specifies costs like a security deposit, first month's rent and last month's rent — but does not list broker's fees. But the competition for housing is so fierce that this cost, in effect, gets pushed onto renters who want to get approved for an apartment.

" You can't just put a law out there and expect a whole bunch of people who weren't following it before suddenly to comply," Quattrochi said of the new measure.

He said the new proposal may help clarify who's responsible for paying the broker's fee, "but ultimately, if there's no enforcement, there's not gonna be anything different happening, sorry to say. So, we're kind of not expecting this will really change a whole lot."

Some property owners may try to pass the cost along to renters in the form of higher rent, Quattrochi said.

Demetrios Salpoglou, the CEO of the apartment rental website Boston Pads, wrote in a Tuesday newsletter that small rental property owners in particular will be "harmed" by the broker's fee shift and will likely struggle to maintain their properties and have to increase rents due to the additional costs.

WBUR's Fausto Menard contributed to this report.