The New York Times ran an interesting piece this morning, exploring the growing trend of landlords using broker representation in filling vacant apartments. As the article notes, even a casual glance at the craigslist rental ads lately shows an overabundance of broker-ads. As should be expected, it is typically the neighborhoods with higher rents and moderate renter-turnover that see the most broker involvement:
An analysis of the 591 listings in “apts/housing for rent” in the San Francisco section of Craigslist on June 19 found that 315 rentals (53 percent) were clearly identified as represented by brokers or agents. The remaining 276 postings did not disclose whether a professional broker was involved. In some neighborhoods, brokers had a virtual lock on listings: 72 percent in North Beach, and 82 percent in South of Market.
Dealing through a residential broker can be a positive experience for someone wholly unfamiliar with the dynamics of renting out an apartment. However, the remarkable rise in the prevalence of broker representation fundamentally changes the game for potential renters. The article makes explicit note of the situation in Manhattan, where brokers control the market. In a world where brokers push asking rents to the absolute pinnacle of what could be considered "market rent" and aggressively pursue tenant evictions, the agent-renter relationship can become extremely adversarial...and expensive.
In San Francisco, many tenants enjoy amicable and even friendly relationships with their landlords. A larger role for middlemen means an added layer of obstruction between owners and renters, creating a much less personal relationship. This may not be a bad thing for some, as many residents of hi-rise buildings enjoy the layer of professionalism that comes with a full-time property manager. But with aggressive managers looking for high turnover and pushing rental rates as high as they can justify, we shudder to think what the future of this city's rental market could look like, particularly if the Board of Supervisors gets involved.
Brokers’ Entrance Into Market Bodes Ill for Renters - [NYT Bay Citizen]