By Hannah Shaffer
We’re in a moment where we can significantly change how renting works in Northampton. For the first time, the city is drafting local legislation that will shift the responsibility of rental agency broker fees from tenants to landlords. Last June, I began attending Northampton Housing Partnership meetings as a renter interested in housing advocacy. The Housing Partnership is a volunteer advisory board tasked with identifying housing needs in Northampton and advocating for more fair and affordable housing. I’ve been involved in these conversations for nearly a year, now as a voting Partnership member. I want to write here about why we’re looking to protect renters from Rent Noho broker fees, what might threaten the proposal, and how the public can rally to show support.
In Northampton, a large percentage of the rental market is controlled by rental companies Rent Noho and Robinson Real Estate. These companies provide their services to landlords free-of-charge. Those services include photographing the property, writing property listings and hosting them online, as well as cross-posting properties to Craigslist. The rental agency also shows the apartment to prospective tenants, collects rental applications, and screens prospective tenants—this process includes background checks for court records, credit history, rental history, and income/employment verification. (Rent Noho does not require background checks for the landlords who contract them.)
Throughout the process, no fee is paid by the landlord. Instead, fees are collected from the tenant in the form of a “broker fee” or “agency fee”. At the time of writing, this fee for both Rent Noho and Robinson Real Estate is 60% of one month’s rent. Additionally, Rent Noho charges a nonrefundable $35 application fee to prospective tenants, whether or not the tenant’s application is approved. Landlord fees beyond first, last, security, and a key deposit are illegal under Massachusetts law, but brokers aren’t considered landlords, and therefore can circumvent this law.
Northampton and Valley-area tenants have been raising the alarm about these rental agencies for years. A quick look at Rent Noho’s Google listing reveals a spate of negative reviews, including the repeatedly asked question: For the cost charged to tenants, what service are these agencies actually providing?
In 2019, the Pioneer Valley Planning Commission in conjunction with the Housing Partnership, conducted a 109-page study on impediments to fair housing in Northampton (Unlocking Opportunity: An Assessment of Barriers to Fair Housing in Northampton). “Cost of housing and generational wealth disparity” was one of the primary barriers identified in the study, with broker’s fees and Rent Noho, specifically, being called out by name.
“I find it completely ridiculous that it isn’t illegal for Rent Noho to charge the renter a ‘rental fee’ that’s 60% of one month’s rent to provide absolutely no service to the renter. The service they provide is to the landlord only. But they manage so many units in town and almost all the quality units. It is undoubtedly pricing people out of town- it’s unreasonable to expect people to be able to put down 1st, last, deposit, and 60% all at once.”—Northampton Resident
2019 Unlocking Opportunity report, page 9.
Interviews, focus groups, and community surveys all expressed concerns about the monopoly of local rental agencies as a significant barrier to housing access, especially considering that the Northampton/Springfield metro area is the most segregated metropolitan statistical area in the country when it comes to White-Latino segregation. Given the inextricable link between housing inequality and racial inequality, the additional financial burden of broker’s fees is a race and class issue. Moreover, Housing Choice Vouchers, which provide financial support to low-income tenants hoping to make a move to a “higher opportunity neighborhood,” are not designed to include the added cost of rental agency fees. Housing Choice Vouchers are calculated using Fair Market Rent (FMR) values, and it’s long been an issue that Northampton uses the same FMR values as the whole of the Pioneer Valley Region. Given the higher cost of Northampton rents compared to surrounding areas, voucher holders are hard-pressed to find affordable Northampton housing. (Unlocking Opportunity, page 31)
Northampton wouldn’t be the first city to rally for broker’s fees being paid by landlords instead of tenants. In February 2020, New York City, under guidance of the Department of State, took steps to institute broker fee protections. Despite public support, the measure was quickly contested by the Real Estate Board of New York, and is still caught up in ongoing litigation.
In the midst of a global pandemic that’s been responsible for higher unemployment rates than at their highest during the 2007-2009 Great Recession, it’s getting harder to deny the need for fair and affordable housing. The city of Northampton invested time and resources into the extensive 2019 Unlocking Opportunity Survey. That work predates the COVID-19 pandemic, and it’s time for action.
Senator Jo Comerford attended Monday’s Housing Partnership meeting and expressed support for the creation of a Home Rule Petition to address the issue of broker’s fees. Home Rule gives a town or city in Massachusetts the right to create a charter or ordinance to organize local government in a way that works best for its citizens. Significant local actions, like this one, require the approval of the state legislature. Senator Comerford expressed the desire to advocate for the city throughout the drafting and legislative process.
But there will be opposition that could stop the change from getting through. If New York City serves as an example, rental agencies have the financial resources and organizing capacity to stifle the petition, potentially entangling the city in litigation it may not be willing to fight. After reading about the possible Home Rule Petition in The Gazette last month, a Rent Noho licensed real estate agent attended Monday’s meeting to share public comment expressing opposition.
This pro-tenant movement could fizzle without an outpouring of public support. Mayor Narkewicz, the Northampton City Council, and our state representatives all need to hear from renters and homeowners alike, making it clear that this change is necessary.
When it comes to making progressive reform, this is low-hanging fruit: Local legislation supported by sympathetic politicians. But Rent Noho and Northampton landlords are rallying. If the majority of responses to this proposed change are coming from landlords and real estate companies, politicians won’t follow through.
There are two things you can do to ensure this legislation passes.
1. Tell your representatives that you know about the proposed Home Rule Petition, and favor landlords paying for the services they receive, instead of passing that cost to tenants.
2: Attend Housing Partnership meetings and city council meetings to voice your support. Partnership meetings are the first Monday of every month at 5:30pm EST over Zoom. There’s an opportunity for public comment at the beginning of meetings, and meetings typically last 90 minutes (until 7pm EST). You can leave after the public comment portion or stay through for the rest of the meeting. Showing up and sharing even a few sentences has a massive impact! See meeting agendas for Zoom link:
Northampton City Council (Contact Your Councilor tab)
Councilor Alex Jarrett and Gina-Louise Sciarra have attended Housing Partnership meetings and expressed their support. If they’re your councilors, please email them to extend your thanks! If not, email your ward councilor and ask if they’re on board.
Lindsay Sabadosa – Massachusetts House of Representatives
District office phone #: (413) 270-1166
State house phone #: (617) 722-2460
Representative Linday Sabadosa has expressed her support! Email or call her office to extend your thanks and share your experiences.
Senator Jo Comerford – Massachusetts State Senator
District office phone #: (413) 367-4656
State house phone #: (617) 722-1532
Senator Comerford has expressed her support! Email or call her office to extend your thanks and share your experiences.
Hannah Shaffer is a game designer and member of the Northampton Housing Partnership.
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