Evaluating Massachusetts’ Tax Lien Foreclosure Laws Post Tyler v. Hennepin County

January 26th, 2024 in Civil Litigation, Housing Law, Legislation in Court, State Legislation

Last term, in Tyler v. Hennepin County, the Supreme Court ruled Minnesota’s tax lien foreclosure scheme unconstitutional, in violation of both the Fifth Amendment’s Takings Clause and the Eighth Amendment’s Excessive Fines Clause. Minnesota is one of twelve states, in addition to the District of Columbia, with tax lien foreclosure statutes. Sometimes referred to as “tax and take seizures” or “home equity theft,” these laws differ significantly from a typical bank foreclosure proceeding in which a homeowner can only lose equity already owed as debt. By contrast, foreclosure under tax lien laws can result in a homeowner losing the entire value of their home—often a financial loss multitudes greater than what the homeowner actually owed. Massachusetts is among the states that permit this practice. In the wake of the Tyler ruling, whether the law can or should remain on the books is worth examining.

Ms. Geraldine Tyler

In Tyler, Geraldine Tyler owed $15,000 in property taxes, but when Hennepin County foreclosed on her home and sold it for $40,000, it was able to keep the $25,000 balance of her equity. As Chief Justice John Roberts said, writing for a unanimous court, “The taxpayer must render unto Caesar what is Caesar’s, but no more.”

Massachusetts’ tax lien foreclosure law, found in Chapter 60, was passed in 1996 amidst a statewide budget crisis. According to Dan Bosely, the former legislator who wrote the law, it seemed like a creative revenue generator at the time, a way to help communities recoup lost revenue when people were not paying their real estate taxes or water and sewer bills. But the practice has been widely criticized by consumer advocates, and according to professors and lawyers familiar with tax lien laws across the country, the industry targets those in distress, mostly elderly and poor homeowners. According to Joshua Polk, an attorney with the Pacific Legal Foundation who has litigated three Massachusetts-based cases, “It’s a transfer of wealth from the poorest people to either government entities or extremely wealthy investors.” In 2018, Bosely himself expressed concern about the consequences of the legislation. From 2014 to 2021, Massachusetts residents subject to tax lien foreclosure lost 82% of their home equity, which amounted to an average loss of $172,000 per homeowner.

Under the current Massachusetts law, a municipality can take control of a property itself or sell the right to foreclose to a private buyer. In the past decade, one Boston based investment company, Tallage Inc., has purchased two thousand tax liens from thirty cities and towns. According to Tallage’s general counsel, the company is acting in the public good, helping recoup lost revenue needed to pay for public schools, police stations, and firefighters. In fact, cash-strapped cities such as Worcester, Lowell, New Bedford, Pittsfield, and Quincy use tax lien foreclosures more often, likely due to a dire need to fill city coffers. However, whether thrusting people into more acute financial precarity or homelessness might not also have collateral consequences for a city’s bottom line seems worth examining. Further, when these third-party intermediaries are involved, private investors such as Tallage, not the municipality and its taxpayers, reap the lion’s share of the financial payout.

In the wake of the Tyler ruling, an editorial in the Boston Globe urged Massachusetts to use this moment to reform its tax foreclosure laws: “Protecting the rights of homeowners ought to be part of any future legislative housing package.” Whether Tyler by itself invalidates the Massachusetts law is a different question. Unlike in Minnesota, Massachusetts tax foreclosures often happen through intermediaries like Tallage, making the government’s role more attenuated and thus potentially less dubious as a constitutional matter. Further, all Massachusetts tax foreclosures go through a Land Court hearing, at which, per a 2016 ruling, an owner may request a judicial sale to retain their equity in the property. Whether this provides any extra measure of protection is questionable though, as many individuals facing foreclosure may be unaware of these rights and unable to obtain legal counsel. Regardless of whether these procedural differences actually afford homeowners any more substantive protections, they are enough—from Tallage’s perspective—to place Massachusetts’ law squarely outside the scope of Tyler’s ruling.

To others, Tyler provides a clear mandate to change Massachusetts’ current statutory scheme. During a hearing of the Joint Committee on Revenue in June 2023, First Assistant Attorney General Pat Moore called the Massachusetts law a “classic unconstitutional taking,” undistinguishable from the one the Supreme Court just struck down. A case winding its way through the Massachusetts courts—in which a Worcester woman stands to lose $250,000 over a $2,600 unpaid tax bill—may soon clarify whether the judiciary will permit the practice to continue throughout the commonwealth.

Even if the Massachusetts courts find the Chapter 60 provisions distinguishable from those at issue in Tyler, the practice is problematic and the legislature should take action. According to UMass law professor Ralph Clifford, municipalities collect an average of $50 for every $1 of delinquent real estate owed. Raising revenue off the backs of a state’s poorest and medically compromised citizens and depriving them of the equity they have built up over years, even if constitutional, is surely unsound policy.

The Massachusetts State House
Boston, 1787

In February, 2023 Rep. Jeffrey Roy (D-Franklin) and Rep. Tommy Vitolo (D-Brookline) introduced H. 2937, “An act relative to tax deeds and protecting equity for homeowners facing foreclosure.” This bill would bring the law surrounding tax lien foreclosures in line with that governing mortgage foreclosures: a municipality would still have license to sell a property burdened by unpaid tax debt, but additional money from the sale, beyond the debt owed, would be returned to the homeowner. Another bill, H.2907, filed by Rep. Tram Nguyen (D-Andover), addresses concerns surrounding notice. While towns are required to provide written notice to homeowners at risk of tax foreclosure, the requirement is minimal and, given contemporary realities of how information is consumed, inadequate. According to a legal aid lawyer familiar with these cases, “Maybe [the requirements] made sense 100 year ago when people got their information from going to town hall or the post office, or from a newspaper…but in the context of our world today, using those procedures is calculated not to give notice, but to hide it from people.” H.2907 would require notice be understandable to an unsophisticated consumer. Given that those affected by tax lien foreclosures are usually elderly, medically compromised, or without the resources to hire an attorney, such enhanced procedural safeguards seem prudent.

Massachusetts legislators have filed bills addressing these issues in the past. With Tyler shining a national spotlight on this issue, advocates are hopeful the moment is ripe for reform. The legislature should not wait for the courts to take action in the wake of Tyler. Regardless of whether the current scheme passes constitutional muster from the perspective of the judiciary, real policy concerns with the statutory scheme have been exposed. The legislature has itself deemed, per Mass. Gen. Laws ch. 93, § 46, that a practice need not be illegal to be an unfair and unreasonable manner of debt collection. Legislators should seize on this moment to act as independent constitutional actors and pass the aforementioned legislation. Further, any reform regarding these laws would be remiss not to provide remedial measures for those who have already suffered injury due to this predatory practice.

Edie Leghorn anticipates graduating from Boston University School of Law in May 2025.


Running Out of Room: The Right to Shelter in Massachusetts

January 26th, 2024 in Budget & Appropriations, Housing Law, Local Legislation, State Legislation

On August 8, 2023, Massachusetts Governor Maura Healey declared a state of emergency  because state resources were insufficient to comply with the Commonwealth's right to shelter law. Although the law has been in place for 40 years, a rapid increase in the number of people requesting shelter and the declaration of a state of emergency has inspired new debates and tensions around the right to shelter. To maintain the spirit of the law but not overburden the Commonwealth, compromises must be made to continue the legacy of the right to shelter.

Governor Dukakis & Right to Shelter

In 1983, Massachusetts closed its mental hospitals, which along with rising drug use, left people homeless and sleeping in the streets across the state. In response, Governor Michael Dukakis filed legislation guaranteeing shelter for every homeless family in the state. Ten months later he signed the ‘right to shelter’ law.

The emergency assistance program, colloquially known as the right to shelter law, is meant to protect children from homelessness if their parents fall onto hard times. The law guarantees shelter for families with children and pregnant people without children. Under the law, the state must quickly provide shelter and basic necessities to families who have nowhere else to stay.

Governor Healey & Current Crisis

On July 31, before the state of emergency, a group of Massachusetts legislators released a letter urging the federal government to streamline the process for work authorizations so immigrants can begin working and stop depending on the state. Employment authorization had a wait time of six months or longer, thus forcing immigrants to rely on the state as they cannot legally work without authorization.

On August 8, Governor Healey declared a state of emergency after months of rapid escalation of families seeking shelter. Along with the state of emergency, the state reported spending nearly $45 million per month on programs to help families eligible for emergency assistance. As of October 2023, nearly 7,000 families were in emergency shelter and about half of those in shelter were children. The governor said the state would be unable to accommodate new families by the end of October 2023. Despite the inflated numbers and costs, the governor made it very clear that the law was not ending, but Massachusetts needed federal assistance, sites to house people, staffing, and funds to continue doing the work of sheltering those in need.

Massachusetts is the only state that has a right to shelter. The most similar law is a New York City consent decree that guarantees all unhoused individuals—not just families—shelter within city limits. The city’s right to shelter law has also been facing criticism as an increase in unhoused people and an influx of immigrants has overburdened that system as well. In response to the surge of families seeking shelter, New York City Mayor Adams suspended some components of the law, Governor Kathy Hochul declared a state of emergency, and subsequently received $104.6 million federal funds in response. Much like what happened in New York City, Mayor Healey is attempting to solicit federal assistance to mitigate the rapid increase in those seeking shelter and the amount of state resources being allocated to handling the crisis.

Debates Over Right to Shelter

Since the beginning of 2023, there has been increased criticism of the right to shelter in Massachusetts. People claim the housing crisis paired with the surge of immigrants entering the state have overburdened the emergency assistance system. Further, they claim the right to shelter has turned Massachusetts into a ‘migrant magnet.’ Overall, critics see the right to shelter as an outdated relic that cannot keep up with current demands. These criticisms have come with calls for the law to be amended, suspended, or altogether repealed.

Rep. Peter Durant (R-Worcester), is among the most vocal in expressing criticisms of the right to shelter law. Durant firmly believes the right to shelter law is being overrun by migrant families asking for assistance and suggested adjusting the law to excluding immigrants from receiving aid under this law. On September 14, 2023, Durant proposed H.4561 (An Act Ensuring Fair Housing for Homeless Families) to amend the right to shelter law to only apply to U.S. citizens. He is joined by twelve other petitioners, and the bill is still in committee as of October 2023.

Despite the criticism, there is still sizable support for the law amidst the crisis. Sarang Sekavat, chief of staff at Massachusetts Immigrant and Refugee Advocacy Coalition, testified, “The idea [of the law] has always been to help out families and really to make sure that children aren’t suffering when their parents fall on hard times, and that’s exactly what we’re seeing right now.” 76% of Massachusetts residents, especially immigration and housing advocates, agree with Sekavat and believe the law is operating exactly as it was meant to and exemplifies the character of Massachusetts.

Moving Forward

The Massachusetts State House
Boston, 1787

Although the current housing crisis is putting the right to shelter law under intense scrutiny, the law is functioning as intended. The law was passed with children in mind and with the goal of ensuring no child had to sleep on the streets of Massachusetts. There is a rising need for housing, influenced by the housing and immigration crises, and many children do not have housing. The law has been an important part of Massachusetts’ identity for four decades, and to repeal it now when people need it most would be to go against the very nature of the Commonwealth.

On the other hand, concessions may need to be made for the well-being of the Commonwealth. If the Commonwealth overextends itself and its resources to meet rising needs, it may jeopardize the longevity of the right to shelter and similar programs. In 1983 there was no way to predict the amount of people seeking shelter in 2023. Now, there is no way to predict the trends in people seeking shelter, particularly if it will continue to increase or when it will stop. If Massachusetts will run out of room imminently, difficult decisions must be made to address the need for shelter with the availability of resources and housing.

The path forward must be a mix of aspiration and reality. Massachusetts must solicit support from the federal government with financial assistance and an expedited process for work authorizations. Further, Massachusetts must look inward to equitably share the responsibility among all towns and cities, as well as plan to increase the housing available for those in need. Additionally, the Massachusetts Legislature could pass legislation to address the housing crisis, including implementing rent caps and moratoriums on evictions. To continue the legacy of the right to shelter law, the Massachusetts and federal governments must work together to address the current crisis and preserve the law for those who need it in the future.


Juliana Hubbard anticipates graduating from Boston University School of Law in May 2025.

The Idiosyncrasies of Imbler: Absolute Immunity for Prosecutors Makes Absolutely No Sense

January 26th, 2024 in Criminal Law, Federal Legislation, Legislation in Court

Supreme Court Justice Robert H. Jackson once observed that: “The prosecutor has more control over life, liberty, and reputation than any other person in America.” But with great power does not necessarily come great responsibility. When prosecutors present fabricated evidence and false testimony, make false statements, suborn or coerce perjury, conspire with a judge to predetermine the outcome of a case, withhold exculpatory evidence in a death penalty case, destroy exculpatory evidence, deny a speedy trial, and even violate a citizen’s right to be free from involuntary servitude, courts have held prosecutors are absolutely immune from civil liability. This immunity originates from the 1976 Supreme Court decision of Imbler v. Pachtman. In that case, Richard Pachtman, a prosecutor, withheld evidence that confirmed the alibi of a defendant in a murder trial, Paul Imbler, resulting in Imbler’s wrongful conviction. Yet, the Supreme Court held that Pachtman had absolute immunity from Imbler’s civil suit. The Imbler Court found support for absolute prosecutorial immunity in the “common law,” “history,” and “public policy.” Yet nearly half a century after Imbler, neither the common law, history, nor sound public policy provide continued support for absolute prosecutorial immunity.

The Imbler Court argued it was “well settled” that absolute immunity for prosecutors was “the common law rule.” In support of this claim, the Court cited a handful of lower court cases the earliest of which was decided in 1933. But none of these cases referenced English common law. At common law, absolute prosecutorial immunity was impossible as there was no such thing as a public prosecutor. Rather, private parties “prosecuted criminal wrongs which they suffered.” The public prosecutor was a “historical latecomer” who “did not emerge” in England until the “the Office of Director of Public Prosecutions” was established in 1879.

Even after public prosecution began in the U.S., as Justice Scalia recognized in his 1997 concurrence in Kalina v. Fletcher, there was “no such thing as absolute prosecutorial immunity.” Rather, prosecutors could be sued for malicious prosecution. For example, in 1854, the Massachusetts Supreme Judicial Court held that a prosecutor accused of lying did not have absolute immunity and could be prosecuted for “malicious” acts. The first U.S. court case granting prosecutors absolute immunity was handed down by the Indiana Supreme Court in 1896. That decision, which “became the clear majority rule” across the U.S. in the decades after it was decided, mistakenly concluded that the 1854 Massachusetts Supreme Judicial Court verdict which allowed for prosecutors to be sued for lying had in fact established that prosecutors were entitled to absolute immunity. Consequently, as Justice Scalia pointed out, Imbler was premised upon “a common-law tradition” that “was not even a logical extrapolation from then-established immunities.” At English common law, there was no such thing as a public prosecutor and throughout all of U.S. history until well after Reconstruction, public prosecutors had “the equivalent of qualified immunity” making them liable to suit for malicious acts.

The Imbler Court also made a historical argument in favor of absolute immunity for prosecutors, claiming that the Reconstruction Congress did not intend for the 1871 Civil Rights Act to be read to mean what it plainly says that “every person” acting under color of law who violates a U.S. citizen’s constitutional rights is subject to suit. Rather, according to the Imbler majority, when the Reconstruction Congress referred to “every person” they did not mean to include prosecutors. The Court produced no evidence from the legislative history of the 1871 Act to support this conclusion. Given that no U.S. court had ever granted absolute immunity to a prosecutor until 1896, it is impossible that the Reconstruction Congress had this non-existent immunity in mind when they were legislating in 1871. Justices Thurgood Marshall, Blackmun, Brennan, Scalia, and Thomas have all since ridiculed Imbler’s revisionist history. Moreover, the 1871 Civil Rights Act was passed in part to remedy “Southern prosecutors’ aggressive abuse of the judicial process” to “thwart Reconstruction and the enforcement of federal civil rights laws.” In just one Southern state, over 3,000 Union soldiers were prosecuted. The Civil Rights Act exposed Southern prosecutors to civil liability to prevent federal officials from being subjected to malicious and baseless prosecutions “for arresting southern violators of the Civil Rights Acts.” The Imbler Court did not consider this history, refusing to construe the text of the Civil Rights Act “as stringently as it reads,” and instead implanting into the heart of the Civil Rights Act a rule of absolute immunity even though the Imbler Court acknowledged that the law “on its face, admits of no immunities.”

Imbler’s final justification for its ruling was a “public policy” argument that absolute immunity was necessary to protect “honest prosecutors” from being “constrained” in their actions by the prospect of civil liability. But absolute immunity unnecessarily defends deliberately dishonest prosecutors. The Imbler Court itself acknowledged that absolute immunity “does leave the genuinely wronged defendant without civil redress against a prosecutor whose malicious or dishonest action deprives him of liberty.”

The record of wrongful convictions in which prosecutorial misconduct played a decisive role since Imbler overwhelmingly confirms this unconscionable reality. Over 2,700 wrongful convictions have been recorded with prosecutors committing misconduct in 30% of those cases with the real total likely far exceeding that amount. The most recent national study of prosecutorial that took place over two decades ago found over 11,000 cases of prosecutorial misconduct with over 2,000 cases resulting in reduced sentences, dismissed charges, or reversed convictions. Wrongfully convicted people have spent tens of thousands of years in prison collectively for crimes they did not commit since Imbler and many guilty persons have remained free to commit more crimes. Worse still, prosecutorial misconduct was implicated in over 550 death penalty reversals or 5.6% of all death penalty cases. In federal wrongful conviction cases, according to the National Registry of Exonerations, prosecutors commit misconduct “more than twice as often as police” and “seven times as often as police” in federal white-collar cases. Yet, all prosecutors at the federal level and most at the state level receive more immunity from suit than police officers who receive qualified immunity. Providing qualified immunity to prosecutors, the type of immunity that all executive officials enjoyed when the Reconstruction Congress passed the Civil Rights Act of 1871, would protect honest prosecutors from frivolous suits while at the same time allowing the wrongfully convicted to hold prosecutors accountable for clearly established violations of constitutional rights.

The basic public policy error of the absolute immunity of Imbler is that it shields from liability all deliberately dishonest acts committed by prosecutors. It is one thing to argue that honest mistakes made by prosecutors acting in good faith should be immune from suit, but the Imbler Court took this too far and provided absolute immunity from suit for intentional bad faith acts committed by prosecutors that violate constitutional rights. The Imbler majority argued that prosecutors would be accountable through other means such as criminal liability and professional discipline. But only one prosecutor has ever been jailed for misconduct for a period of just 10 days, far shorter than the nearly 25 years the person whom he helped wrongfully convict spent in prison. Only 4% of prosecutors whose conduct played a role in securing wrongful convictions have been disciplined. One study of over 200 Justice Department cases of prosecutorial misconduct found zero instances of misconduct by federal prosecutors that resulted in disbarment. The public policy results of Imbler’s rule of absolute immunity for prosecutors over the past five decades confirm the old axiom that “absolute power corrupts absolutely.” Absolute immunity is simply too much power for the most powerful people in the U.S. criminal justice system to possess.

Imbler’s reasoning is non-sensical and utterly antithetical to a government “of laws and not of men” in which no official is “so high that he is above the law.” Imbler should be overturned by the Supreme Court. If the Supreme Court does not overturn Imbler, then, as Judge James C. Ho of the Fifth Circuit recently observed, Congress can abolish absolute immunity “anytime it wants to do so” by clarifying that the 1871 Civil Rights Act was never intended to idiosyncratically allow prosecutors to flout the rule of law with impunity.

William Bock is a visiting student at Boston University School of Law and anticipates graduating from the University of Michigan Law School in May 2024.

Massachusetts Broker’s Fees: Reasonable Service or Market Manipulation?

January 26th, 2024 in Housing Law, Lobbying, Local Legislation, State Legislation

In 2023 Massachusetts established the Executive Office of Housing and Livable Communities with an eye toward creating more housing in the state, which, like many across the country, is suffering a housing shortage. Some estimates suggest that Massachusetts will require between 125,000-200,000 additional housing units by the end of the decade. Various proposals are currently being considered as how to best spur the creation of new homes. The eventual solution will not be a single provision but likely many policy amalgams from various sectors. One proposal currently before the Joint Committee on Housing is Senator James B. Eldridge’s bill, An Act Enabling Local Options for Tenant Protections (Bill S. 872). One of the more quietly influential provisions in the bill, Section 8(g),[i] should be amended to be mandatory across the state, rather than allowing municipalities to opt into the provision and the language regarding should be changed to prohibit the business from charging tenants a fee. Any of the various similar bills that the committee is considering should adopt Section 8’s amended language.

Section 8(g) could alone reduce the cost of relocating to a new apartment by almost 20%, greatly increasing the mobility of Massachusetts tenants, and concomitantly, increasing the competitive demand for more, new housing units. The bill allows municipalities, to prohibit tenant-paid broker fees. Currently, tenants relocating in the Commonwealth may be required to provide first month’s rent, last month’s rent, a security deposit, and a broker’s fee at signing. Security deposits and broker’s fees are traditionally tied to the price of the housing unit and often are equivalent to one month’s rent. The median rental price for a one-bedroom apartment in Boston (certainly the state’s most expensive large housing market) is above $2,900, meaning that a renter must find $11,600 to move—likely before they’ve received their previous security deposit back.

The remainder of the bill provides for municipalities to adopt, should they so choose, rent stabilization regulations, standards for just cause eviction protection, condominium conversion ordinances, prohibitions on immediate rent increases in response to the bill, anti-gentrification displacement protections, and regulations of fees. Each provision has its merits and deserves its own full analysis not available in this article.

While the bill before the Housing Committee allows for different municipalities to adopt different policies, the state’s goal of new housing would be better served by prohibiting the practice of broker's fees. In the modern housing market, tenants are often looking for units through online platforms and only being connected with brokers after inquiring into specific properties. However, nothing prevents multiple brokers from presenting the same listing because landlords can provide their listing to multiple brokers. Under such a model prospective tenants must pay the vendors that their landlord contracted with, making renters captive consumers, which distorts natural market forces and contradicts the needs of the broader housing market and tenants’ interests.

Other cities and states have recently tried to put forward similar provisions to varying results. Often such proposals face significant pushback from broker-related interest groups. The housing market inefficiency is a case study in the challenge of making reforms in circumstances of concentrated interests and diffuse costs. While renters may feel aggrieved about their new apartment costs, they likely only face the additional expense no more frequently than once per year. Meanwhile, brokers reap substantial benefit from a captive market and thus have every incentive to ensure no progress or changes are made to their outdated role in a modern market. The housing shortage allows landlords to deflect the cost onto tenants because tenants have so little choice in the current shortage; thus, no competitive price pressure, by either landlords or tenants, are exerted on brokers to provide competitive fees or better services.

Broker groups have suggested that prohibitions on tenant-paid fees will increase rents by requiring landlords to cover the costs. They are likely correct; though it is likely of little consequence. Assuming that the one-month’s-rent broker fee is a competitively derived price for services rendered and assuming that brokers are actually required in modern apartment leasing (two generous assumptions): if a landlord is instead required to pay the $2,900 broker fee for a broker finding a tenant for a median one-bedroom Boston apartment, we could expect that they would raise the rent of the apartment by as much as $247.44 (spreading the $2,900 expense with 5% annualized interest over 12 monthly payments), an 8.5% increase. While an 8.5% increase in rent sounds substantial, (all assumptions holding constant) the tenant’s housing costs over the same first twelve months has increased only 0.002% while the cost of relocating has decreased by 18.6%. The substantial reduction in cost to relocate to a new apartment (which, albeit, doesn’t include moving expenses, i.e. boxes, truck rental, moving company, favors and pizzas for friends) increases tenants’ ability to more successfully exert their demand force as consumers, which requires the market to respond proportionately, through a reduction in rental costs or an increase in the quality or quantity of housing.

The flaw in such an analysis is the omission of any future years’ rents based off the initial absorption of the broker fee. That is to say, even assuming the rent does not get raised after one year, the tenants will be paying that additional $247.44 each month of every year after the first. So over two years the housing costs would increase by 4.2%. It is worth noting however, that the two listed assumptions are not the legal reality in a number of competing states. Accordingly, any such reactionary rise in rent prices is not a given, and certainly not an increase of 8.5% as discussed above. Additionally, such a calculus does not consider the prohibition on immediate rent increases elsewhere in Senator Eldridge’s bill. Nor does it account for other provisions not yet proposed. For instance, California does not allow landlords to request or accept last month’s rent, and the justification for continuing to require Massachusetts residents to makes increasingly little sense in the present shortage.

The current fee-shifting model onto tenants provides perverse and inefficient market incentives for the actors in the field. With inadequate housing stocks, landlords are able to defer screening and application costs onto brokers and are not incentivized to make applying more efficient for tenants. Nor is there substantial incentive to add to or improve the available housing stock. Brokers, because there are is no expectation of exclusivity, have no increasing marginal interest in providing additional efforts to find tenants as another broker may fill a vacancy before they can, especially as most tenants locate apartments through non-broker-affiliated online platforms in the modern market. Nor are brokers incentivized to provide competitive fees as the industry has agreed upon the equivalent of one month’s rent, the price-fixing characteristic central to the economic definition of a cartel.

Meanwhile, throughout the process, tenants have limited selection and face rental prices inflated by the squeeze of the housing shortage. Even tenants who don’t move are harried by the practice as sizable year over year rent increases are unavoidable because of the exclusionary capital required to move elsewhere. Currently, to avoid a rent increase and move requires having on-hand the equivalent of four month’s rent. Which is a cruel absurdity given that 44.5% of households in the Greater Boston area in 2022 were cost burdened according to the Boston Foundation’s Greater Boston Housing Report Card, that is spending more than 30% of their income on rent. The same report showed that nearly half of those cost burdened, 22.7% of households in the Greater Boston area, are severely cost burdened, spending more than 50% of their income on rent. To bind families in a Catch-22 that they cannot seek less expensive housing unless they save the equivalent of four months rent while they are currently paying more than half of their income towards their current rent leaves countless Massachusetts residents teetering at the edge of housing insecurity.

Any adjustment to the current fee scheme, let alone a blanket prohibition on the practice, will activate lobbying efforts from the Massachusetts Association of Realtors, whose End of Session Legal Update in 2022 noted that they “successfully blocked rent control, eviction moratoria, [and] broker fee shifting….” Accordingly, any successful legislation will need to mobilize tenant organizations and various community grassroots organizations to advocate on behalf of lowering relocation prices and diffusing the benefit.

Massachusetts’ housing shortage will require the efforts of policy makers, stakeholders, and community members. The one thing that we can be confident won’t solve the state’s housing shortcomings is not altering the forces that created the problem. The current fee scheme operates as a state-sanctioned cartel that makes relocating markedly more difficult and thus suppresses proper demand and supply influences, further distorting the housing market in the Commonwealth. While it is not a panacea, tenant-paid broker fees should be consigned to the curb with the rest of waste.

[i] “(g) In addition to the powers granted to a city or town in this section and notwithstanding section 87DDD½ of chapter 112, a city or town may by local charter provision, ordinance or by law regulate, limit or prohibit the business of finding dwelling accommodations for a fee.”

Michael St. Germain anticipates graduating from Boston University School of Law in May 2025.