> If you can't figure out why the market still has brokers, you are destined to make the same mistakes that everyone who sunk time and money into this before has made.

100%, this is a societal (political or otherwise) problem to solve - it’s not for lack of an app to facilitate the tx.

for those of us rural folk, why do big cities need brokers?

I think this is a purely New York problem because NYC has been captured by an alliance of property owners and leftist activists who both oppose new development (albeit for differing reasons)

The result is that there is a shortage of housing in NYC and this system pops up to try and extract economic rents from the situation.

Can you provide any examples of "leftist activists" opposing building non-luxury housing?

Not the original commenter but, from past articles I've read the most effective way to create affordable housing is to let developers build new luxury housing. That has the ripple effect of directing the old luxury housing to become more affordable, since it's no longer the new thing.

Unfortunately, the economics of building new housing on extremely expensive real estate, targeting an "affordable" price point just don't incentivize as much construction as the city needs.

In cities like NYC is common for a landlord to own 8-9 buildings with multiple units, they tend to be older and don’t want to deal with tenants, so they hire property management offices, their work is simply to rent the place and maintain the place. To maintain the place they hire a super and to rent the place they get brokers that “volunteer” to bring them quality leads. They get paid by the tenants an unofficial broker fee that amounts to 10-15% the total annual rent. It has worked so far for the landlords and the demand mostly pay the price

In Boston we have brokers but it's not this reason (EDIT: See end). The realtors are really only there as the front door to get the lease signed. The landlord does the rest of the landlording. The claim is that the value add the brokers provide is vetting potential tenants - credit checks, etc as well as the time investment of showing the unit.

The standard fee is 1 months rent and this is almost always paid by the tenant.

The arguments here tend to cluster into two groups: 1) Laws should be passed that the landlord needs to pay the realtor's fee and not the tenant. 2) It doesn't matter if #1 happens as the landlord would just bake it into the rent anyways.

EDIT: I should say it's not just this reason as what you cite does happen. But it's just de rigueur here regardless of if you're renting the upstairs unit of a homeowner or going through a property management company.

The difference is that if it's baked into the rent you would be free to move around more often. Instead, every move costs one month's rent.

One thought is good apartments get dozens of applications that need sorting through, and facilitation of apartment viewings. That's a lot of work, and brokers allow that cost to be externalized to the renter. Now, whether or not it should be externalized is a different question, but brokers serve the supply side.

Sometimes the renter pays, although sometimes the broker is hired and paid by the owner

Need is a strong word. Consider it a sustainable niche born of misaligned incentives and a stunted marketplace. Renting is so profitable that landlords paying a broker to mitigate risk is an obvious choice. Craigslist and other free website options have been seething cesspools of scams, stale data, and disinforming SEO. So brokers are a useful filter for renters too, as the other sources are poisoned.

Also know that the oft-shared window we get on it from individual newcomers to NYC isn’t one the market particularly cares about. Brokers hustling 3br in Sunset Park to quartets of Oberlin grads are the starving underclass of New York real estate industry. They know it and, in their overworked misery, condescend to their market.

Avoiding a brokers fee is a popular tip given to new renters…but it’s availability is largely a function of privilege. If you have the right background and connect with a landlord who appreciates that, you have a fighting chance. (Finding a building you like and asking existing tenants if they know of anything opening is the recommended path to this.) It’s still a low probability event without connections.

They don't. I live in Houston, it's the nation's 4th largest city (almost tied with Chicago for 3rd). We don't have brokers.

Quebec got rid of brokers for sales. Not sure what makes them different than the rest of Canada.