Role of Rental Agencies(https://www.gazettenet.com)
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Northampton Housing Partnership:The role of rental agencies needsexamining
Housing Partnership
In this July 19, 2006 file photo, a woman walks next to a "For Rent" sign at an apartment complex.AP
By Northampton (/byline?byline=By Northampton)
Published: 11/16/2020 2:52:16 PM
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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 (http://www.pvpc.org
/plans/unlocking-opportunity-assessment-barriers-fair-housing-
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 (http://rentnoho.com/) 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
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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 (https://www.nytimes.com/2020/02/10/nyregion/nyc-broker-
fees.html). 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
(https://commonwealthmagazine.org/opinion/lets-do-away-with-real-estate-
broker-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
(https://www.mass.gov/service-details/learn-about-residential-assistance-for-
families-in-transition-raft), 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
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of the month from 5:30-7 p.m., through Zoom. A link is available on the
city’s website (https://northamptonma.gov/1054/Housing-Partnership).
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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