Over the years, city and state legislators have periodically pushed to change brokerage feesthat real estate agents charge to act as an intermediary between potential tenants and landlords, with tenants usually footing the bill. But such efforts have received little more than lip service on Beacon Hill, where state lawmakers are expected to greenlight any structural changes to how fees are charged and who is responsible for paying them at the level local.

Here’s what you need to know about the bill in New York, the situation in Boston, and the effects such a change could have.

A broker fee is charged by a broker for his or her services to complete a landlord-tenant agreement for an apartment. Boston and New York are two of the only cities in the United States where the fee is almost universally charged to the prospective tenant – although, in most cases, it is the landlord who hires the broker to market their units. in the first place.

On Thursday, about 71 percent of ads on the Boston Pads rental ad site required the tenant to pay the full brokerage fee, while about 20 percent said the landlord would cover them.

In Boston, a broker’s fee is usually equivalent to one month’s rent. In New York – before this week anyway – that often amounts to between 10 and 15 percent of a full year’s rent.

The fees add to the already immense costs of renting here. These fees emerged decades ago when there was a glut of additional rental housing, so landlords began hiring brokers to find tenants willing to rent their units. But lately, as housing costs have soared and most apartment hunters find their listings online, criticism of the fees has increased.

If it became law, the measure in New York would tip the balance in favor of tenants: if a real estate broker works on behalf of an owner, the latter will then have to pay all related costs. It also requires that prospective tenants receive “a detailed written disclosure of all fees that the tenant must pay to the landlord or any other person as directed by the landlord in connection with such tenancy.” Violations could result in a fine or civil action.

For the change to become law, it would either have to be approved by Mayor Eric Adams – who has expressed concerns about the bill – or, if he rejected it, the City Council would have to override his veto, which seems a likely outcome given its overwhelming passage.

Supporters of the measure in New York say the change will improve housing affordability for tenants, who often must pay a hefty sum including first and last month’s rent, a security deposit and broker’s fees before receive the keys. Opponents, including New York’s powerful real estate industry, say the policy would disproportionately harm small landlords and that landlords, if forced to pay broker fees, will likely simply raise rent to make up for it.

Indeed, brokerage fees are more commonly invoiced by small owners — owners who own one or a few buildings and who have more difficulty integrating the cost of using a broker into their budget. Larger landlords more often absorb brokerage fees because they generate more revenue, or avoid brokers altogether if they are large enough to run their own leasing offices.

new York I already tried this, in 2020with state legislation that shifted the costs largely onto property owners. But it was short-lived: Real estate groups sued And the state officially renounced the change the following year.

Yes. Earlier this year, the state Senate’s version of Gov. Maura Healey’s housing bond bill included a provision it would have required any party “initially engaged and contracted with the licensed broker” – most often, the owner – to pay the fees.

But in the final version of the $5.2 billion bill When Healey signed the law into law in August, the language relating to brokerage fees was gone.

Before that, in the wake of the short-lived ban on brokerage fees in New Yorkthen-Boston Mayor Martin J. Walsh announced he would convene a “working group” to “study broker fees in Boston and their impact on tenants in the City of Boston.”

That was in February 2020. Needless to say, that also fizzled, with the pandemic upending the rental market just weeks after the announcement.

One reason these policies have gone nowhere: Just like in New York, the real estate industry here doesn’t like the idea.

Greg Vasil, chief executive of the Greater Boston Real Estate Board, said real estate groups have opposed the change in the past because they were concerned about its impact on small landlords. But from the start the costs of renting an apartment have become too high for tenantshe said, and lawmakers should consider other ways to cover that cost.

“From the tenant’s point of view, it’s too much money: the first month, the last month, the security deposit and the broker fee,” Vasil said. “It’s worth thinking about ways to reduce these costs, but we don’t want to implement a policy that could harm small landlords. »

The problem for Boston policymakers is that they can’t change how fees work through a simple city council. vote, as the New York City Council did. Like almost any other housing policy Boston is trying to implement, eliminating broker fees in the city. this would require a petition for local autonomy, and thus approval from the state legislature.

This additional obstacle may have prevented city officials from making a real effort to eliminate the fees. Beacon Hill rarely approves of controversies self-government petitions from municipalities, particularly petitions focused on housing policy.

The latest pro-housing petitions that Boston officials have sent to the Legislature, including Mayor Michelle Wu’s rent control proposal last yearwent nowhere, and often without even obtaining the slightest audience.

Dana Gerber can be contacted at [email protected]. Follow her @danagerber6. Andrew Brinker can be contacted at [email protected]. Follow him @andrewnbrinker.