After New York City banned tenant-paid apartment broker fees, Boston-area politicians are looking to end the practice in their cities, too. iStock illustration

Another housing-related showdown between the city of Boston and the state Legislature is poised to unfold next year if city councilors embrace a push to shield renters from paying broker’s apartment fees.

City Councilor Liz Breadon and Council President Ruthzee Louijeune on Wednesday introduced a new proposal that would require any broker fees in the city to be paid by the party who contracted with a real estate broker, effectively prohibiting landlords from passing those costs onto their tenants.

“Residents of the city of Boston, working families, young professionals and students, whether here temporarily or intending to settle long term, are severely cost-burdened. The unregulated practice of tenant-paid broker fees in the rental process places undue burdens on prospective tenants,” Breadon said. “The housing crisis enables property owners to pass broker fees onto tenants who did not solicit those services, worsening inequities in the housing crunch.”

Many renters are familiar with broker’s fees, and they are often asked to pay the equivalent of an additional month’s rent – or more, if they also owe rent for the first and last month plus a security deposit – up front when signing a lease, even if they hadn’t hired the broker.

Councilor Brian Worrell said that asking tenants to pay four months’ worth of rent in one lump sum is “unsustainable.”

The New York City Council in November required landlords to cover the costs, not renters. That leaves Greater Boston as one of the last major metropolitan areas where the burden regularly falls to renters, supporters say. And Cambridge and Somerville city councilors have already begun their own efforts to explore a similar action.

The measure still needs to be reviewed by the Council’s Committee on Government Operations before it can receive the vote needed to send it to Beacon Hill, but several councilors were quick to signal their support during Wednesday’s meeting.

“For many, the added expense of broker fees – often thousands of dollars – is not just a hurdle. It’s a barrier to our housing stability,” said Councilor Henry Santana.

GBAR Endorses Concept

Lawmakers already considered, but quietly decided against, enshrining a similar policy at the state level this year. In its version of Gov. Maura Healey’s major housing bill, the Senate included language requiring landlords to pay broker’s fees, but the measure did not survive negotiations with the House.

Real estate industry observers told Banker & Tradesman earlier this month that the Boston area’s dire housing shortage has left landlords with outsized market power – power they’ll likely use to raise rents should they be forced to pay brokers out of their own pockets.

“At the end of the day, our real-time vacancy rate’s at about 1 percent right and nothing gives a landlord more confidence to not pay a brokers commission than a ridiculously low real-time availability rate or real-time vacancy rate,” said Demetrios Salpoglou, CEO of apartment-listing service Boston Pads.

In a statement to the paper, the president of the Greater Boston Association of Realtors endorsed the same concept that underlies Breadon and Louijeune’s proposal, but warned that it won’t be a permanent fix to the state’s housing issues.

“A broker/agent should be compensated by the party who they have established a contractual relationship with and brought them into the transaction. Mandating that brokers must be paid by the property owner may decrease upfront costs to renters, however, it is extremely likely that cost will still be passed along to tenants through increased rent,” 2024 GBAR President Jared Wilk, a Compass agent, said. This approach will not make Massachusetts a more affordable place to live. The focus needs to be on tackling the region’s housing crisis by boosting housing production.”

The push could once again fuel tensions between city officials that want to press forward with their own plans and state lawmakers who must give their approval.

Senate Democrats this week killed another Boston home rule petition that Mayor Michelle Wu and city councilors sought to temporarily rebalance the city’s property-tax split. Other powers the city has sought, like restoring rent control and adding a new tax on high-dollar real estate transactions, have stalled out without legislative support.

Material from a prior Banker & Tradesman report was used in this story.