Massachusetts lawmakers recently approved a measure requiring landlords—not tenants—to cover apartment broker fees, which often equal one month’s rent. The move mirrors a new policy in New York City, where landlords are likewise barred from charging tenants unless the tenant directly hires the broker. Proponents claim the change will save renters money. But early evidence suggests it merely repackages the same cost—and may even drive rents higher.
In New York, the Fairness in Apartment Rental Expenses (FARE) Act took effect on June 11. Within a week, average listed rents jumped 15 percent, from $4,750 to $5,500. Many landlords, faced with absorbing fees once paid by tenants, simply raised rents to cover the difference. Others introduced vague “management” or “technology” fees—charges that resemble the old broker fees in everything but name. At the same time, the number of apartment listings fell, suggesting some landlords were withholding inventory to preserve pricing power.
This cost-shifting dynamic isn’t unique to New York. In Kansas City, for instance, landlords must pay a $20-per-unit annual inspection fee—and are legally barred from passing it on to tenants. Yet few believe it doesn’t show up in the rent. As with most expenses in housing, the end user ultimately picks up the tab.
Even if renters are no longer writing separate checks to brokers or city departments, they’ll still bear the cost indirectly. Landlords operate in competitive markets and adjust pricing in response to total expenses, no matter how those costs are labeled. The illusion of savings may please voters, but it won’t lower rents.
Such policies also obscure the true cost of housing. When fees are baked into rent rather than itemized, it’s harder for renters to assess value. And as seen in New York, shifting fee obligations may reduce supply if landlords delay listings or forgo using brokers entirely, which limits choice for renters.
Some argue landlords are better positioned to negotiate broker fees, or that renters shouldn’t face steep upfront costs. That may be true in theory. But it assumes landlords won’t pass on those costs—an assumption contradicted by New York’s immediate market response.
If the goal is housing affordability, policymakers should focus on fundamentals: zoning reform, faster permitting, and reducing regulation to increase supply. Reassigning fees won’t create more apartments. But it can inflate rents.
Missourians—and Massachusetts residents—should be skeptical of promises to cut costs by simply shifting who pays them. As Kansas City and now New York have shown, policies that ignore how markets behave rarely deliver the relief they promise.
