The role of rental agencies needs examining

Housing Partnership If you know someone who rents, or are a renter yourself, you know that rental costs are extremely high in Northampto...



Housing Partnership

If you know someone who rents, or are a renter yourself, you know that rental costs are extremely high in Northampton.

Last year, a comprehensive report called “Unlocking Opportunity: An Assessment of Barriers to Fair Housing in Northampton,” was prepared by the Pioneer Valley Planning Commission. The report describes the many obstacles to obtaining housing in Northampton, and recommendations for removing these barriers. It is available to read on the city’s website.

A number of recommendations relate to the difficulties renters face when looking for housing. The Northampton Housing Partnership, an advisory board to Mayor David J. Narkewicz, wishes to highlight some of these barriers.

Although Northampton has developed about 12% of its housing stock in affordable housing, that is not enough for the many prospective low-and lower-middle-income renters who would like to live here. For Section 8, a program that lets low income renters pay a percentage of their income rather than full market rent, there is a waiting list of five years, according to the Unlocking Opportunity report. Both those who hold Section 8 vouchers and those who don’t are faced with looking for housing on the open market.

Much of Northampton’s rental market is controlled by rental agencies, whose services primarily benefit landlords, such as running credit checks on applicants, reviewing references and marketing rental units. Oddly, they charge a broker fee to the tenant rather than the landlord, usually 50-60% of one month’s rent. Some brokers also charge an application fee. In addition, renters are often required to pay first, last and/or security deposit in a lump sum at the start of the tenancy.

To put this in context, a Northampton renter paying the median monthly rent (based on 2017 stats) of $1,054 would be required to put down as much as $3,794 in up front costs. Even if they pass the agency’s screening process, most renters simply cannot afford these steep costs of moving into an apartment.

What are the consequences of these rental agency practices? They lead directly to many prospective renters being screened out of living in our community. In addition, many who have finally received a Section 8 voucher, are simply unable to find housing they can afford (in the short time they are allotted) due to high rental costs, and those people lose their voucher. Because people of color, as well as the disabled and elderly, are more likely to be low income, this process serves to keep out a more diverse population, and it harms us all when this lack of class and racial diversity becomes a mainstay of our community.

New York City recently passed a law forbidding brokers’ fees from being paid by the tenant. This is being challenged in court, but if it holds, it will be an important change for renting in New York City. In Boston, Mayor Walsh has convened a working group to look at doing away with broker’s fees. Also in the Boston area, there are some new digital platforms that are bringing innovative models to better serve renters, property managers, and landlords – without needing the service of rental agencies — while driving down the cost of renting.

Can Northampton make significant changes in how its rental market functions? It will require education and innovation to change this. New digital platforms that promote direct renting from the landlord while affording ease of access and lowering costs may be one piece of the puzzle. When landlords and tenants meet directly, there is often a chemistry that promotes more flexibility in the rental process and the amount of up-front money needed to move in. In addition, there would be no broker fee for the tenant, a substantial savings of hundreds of dollars.

There are programs, like Rental Assistance for Families in Transition, that will pay some of the up-front rental costs such as security deposit and last month rent for those who qualify. However, often there are delays in the processing of such payments, making it hard to incorporate this help when negotiating through a third party rental agent. Individual landlords can make more flexible decisions.

We question whether rental agency practices are serving our city. In this era of COVID-19, job loss, and desperation about losing housing, all piled on top of high rents, the Housing Partnership would like to see changes in the dynamics of the rental market, as outlined above. We believe all members of our community would benefit by processes that allow for fewer hurdles and greater diversity. We welcome community input, and meet the first Monday of the month from 5:30-7 p.m., through Zoom. A link is available on the city’s website.

The authors are members of the Housing Partnership. They include Gordon Shaw, Richard Abuza, Todd Weir, Carmen Junno, Edgardo Cancel, Jim Reis and Julio Alves.



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Newsrust: The role of rental agencies needs examining
The role of rental agencies needs examining
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