A typical, $1600-per-month squat in the fine city of Boston. (Creative Commons image courtesy of @sswj)
A broker and a prospective tenant came upon the address of a row of apartments above restaurants and businesses on Brighton Avenue in Allston. The prospective tenant gazed into a small vestibule of broken mailboxes and the exposed wirings to a fire alarm. The broker, unable to find the right keys, pulled on the handle of the front door with a slight tug. He interrupted a homeless man who had piled his belongings on the carpeted steps while eating a hot dog from Spike’s. The broker and prospective tenant stepped over him.
The second-floor balcony was decorated in rusted bicycles chained to the black, wrought-iron railing. Wind funneled the pungent bleach odor into the nostrils of the visitors as they maneuvered around the trash bags piled in various geometries on top of the discarded furniture. Underneath them, a power hose smacked the inside of an empty Dumpster and sent a toxic river of soap into the drainage ditch.
The broker found his key for the studio listed on Craigslist. Rent was $1,500 a month, which came out to 3 dollars per square foot. Heat and hot water included. The tenant looked down at the crew cleaning the Dumpsters.
“Is there another room available?”they asked the broker.
“One that faces the street? I can’t show it to you, as I don’t have the key,” was the broker’s reply.
“These properties are moving insanely fast and I don’t know if I can have the time to schedule a showing before it’s gone,” the broker added. “But I know it’s an earlier move-in date. First, last, security, and no broker’s fee.”
A lease gets signed. Two weeks later, an email is sent to the tenant, which reads: “I was just informed by the landlord that they are not paying the broker’s fee. I apologize for this inconvenience. Could you please send me a check for the fee? “
A quick Google search of the landlord in this story revealed the name of notorious real-estate tycoon Syroos Sanieoff . On a Sunday evening in 2008 in Allston, an armed man broke into an apartment owned by Sanieoff and raped 2 college girls repeatedly. An investigation by their lawyers revealed that a cellar door had been tied with a piece of wire. A Sam Adams bottle cap had been lodged in the lock. The buzzer system was also broken.
At least the city convened a study. (©Stanley Forman)
Hassan Ghanny goes into greater detail about the brothers Sanieoff and the role they played in the demise of Allston’s beloved Great Scott, and how the property kingpins own an estimated $25 million in local real estate.
Real estate agents make a landlord’s jobs easier and cover tedious services such as showings, background checks, and essential paperwork. The process is for them, so the logical solution should be that it’s a cost that is expected of the renter, not the rentee. Real estate agents are not salaried employees, and their main source of income is commission. In 2019, the New York State Department passed a series of rental protection laws that made it illegal for brokers to charge a fee unless the tenant solicited their services directly. If you responded to a real estate ad in the state, the broker could not charge you a fee for showing you a single unit.
The law lasted from February 2020 to May 2021. The Real Estate Board of New York, a powerful lobbying group, filed a lawsuit arguing that a significant amount of time and resources went into marketing properties, and the new law would significantly hurt broker income. While the law was in effect , then-Mayor Marty Walsh created a group to study brokers’ fees and the impact they have on renters here, referring to it in the Boston Herald as “a tool…to tackle the underlying challenges of housing affordability in Boston.”
Also quoted in the same Herald story was Jason Gell, former VP of the Greater Boston Association of Realtors, who said it is a “bad idea” that “the [broker’s] fees will be absorbed into the rent, increasing the cost of rent.”
The story was published in 2020 and, since then, rent prices have increased regardless of legislation. The average cost of a studio in Boston is $3,056, up 16 percent from a year ago. A one-bedroom averages $3,936–up 14 percent–and a two-bedroom is $4,799, up six percent. Therefore, if a person wanted to move into an apartment for the average cost, first, last, security, and broker’s fee could bring the cost of moving to almost $12,000.
Real estate agents were no doubt a useful tool of the pre-internet era, but now anyone can search on websites such as apartments.com and a litany of listings (though the FBI did release a statement on scam apartments). Unfortunately, the issues surrounding Boston housing go beyond a one-time fee, a fact reinforced, to residents of mixed-income neighborhoods like Allston, by the changing landscape.
Real estate agents make a landlord’s jobs easier and cover tedious services such as showings, background checks, and essential paperwork. The process is for them, so the logical solution should be that it’s a cost that is expected of the renter, not the rentee.
After the broker fee was paid, the tenant moved into their apartment in Allston over the little shops. The broker for the apartment on Brighton Ave. was found on Craigslist. The move in date is September 1st. More than 30 colleges reside in the Greater Boston area with semester start dates the first weekend in September, which is when a majority of leases begin and end as an accommodation for students. Without a U-Haul, they carry their belongings over the bridge from lower Allston. In the time between the signing of the lease and move in, the building across the street was knocked down. Officials and residents have prioritized luxury developments or single- to three-family homes over the large-scale multi-family buildings at the behest of NIMBYs and zoning regulations. Officials in Boston permitted 2.3 new housing units per 1,000 residents between 2008-2018.
The situation has gotten so bad that tenants are outbidding each other for rental units. An article by WGBH correspondent Sarah Betancourt mentioned several qualified renters had the same experience of being beaten out by other applicants after viewing properties. They inquired with their broker, who mentioned multiple qualified applicants applied for the same rental unit, but were offering to pay $100 more a month than the leased price. The renter took their broker’s advice to pay above the asking price, and signed a $3,700-per-month lease.
So what did Walsh’s study ultimately accomplish?
“There was legislation introduced [in 2020] in the form of a study group or subcommittee but the bill was killed on the floor,” said Alexander Sturke, director of communications for the mayor’s Department of Neighborhood Development. “As for introducing legislation to help address the broker’s fee, the issue must first be raised by a City Counselor, who then must draft a proposal, then bring this issues to the mayor, who will then introduce it to the State House.”
Sturke added that only licensed brokers are permitted by the state to issue a broker’s fee, and that “[i]f anyone has been scammed by a realtor, they should contact the city’s Inspectional Services Department or call 311.”
In 2014, WGBH found that the state legislature is among those that pass the fewest bills. In 2021, Massachusetts introduced 13,454 bills to the floor. Fifty-five passed. A transparency campaign run by statewide nonprofit Act On Mass has detailed 10 issues with State House proceedings, one of which explains why Walsh’s study stalled out.
Point No. 3 on the list, entitled, ‘Sent to Study,” reads:
“When news reports on the bill reference “a study,”a voter might think that the legislature is actually doing some investigation, hearing expert testimony, doing analysis of the implications of this proposal or that proposal. The polite language hides what’s really going on, and incentivizes news reports to avoid making the claim that the “Bill was killed”. It is technically possible after all, that the committee might issue a report before the end of December, and somehow the bill might be passed in informal session. Ignore the fact that this would never happen.”
Sending an item to study is considered a third option that neither approves, nor rejects, a bill. Eventually, attention is shifted, as the news focuses on other topics, like online gambling.
Meanwhile, more than 5,000 real estate agents and over 480 brokerage firms operate within the Boston area. As this year’s college move-in draws to a close, many students and new members of the community will no doubt have encountered their first taste of the real estate market. We must ask ourselves what more we can afford, as the system of checks and balances slowly turns into a balance of checks.
