Broker fees will soon no longer make New York City renters broke(er), unless they hire the agent themselves. The Fairness in Apartment Rental Expenses Act (FARE Act) passed the City Council with a supermajority vote last Wednesday, Nov. 13.
Once rolled out, the legislation will prevent landlords from tacking broker fees onto upfront rental costs by designating the hiring party as the paying party. Renters can still pay for their own broker to aid their apartment hunting, but will no longer foot the bill for agents who conduct showings on behalf of a property owner.
The bill was particularly championed by Brooklyn Councilmember Chi Ossé, who built a groundswell of public support through traditional rallies and social media engagement on platforms like TikTok.
“The system of forced broker fees is an affront to all New Yorkers,” Ossé said in a statement. “Today, we end that system. The victims of the old paradigm are too many to count: families unable to have another child, because they cannot afford to move into a larger home; children aging out of their parents homes unable to find a place in their own communities; victims unable to flee domestic violence; workers unable to live near their jobs, or in their city at all — anyone who is hoping to bring their talents and passion to our great city but can’t afford to get through the front door.
“Today the New York City Council proved it can put the interests of the people first and be an example of good governance.”
Currently, the bill awaits Mayor Eric Adams’s signature — a largely symbolic gesture. The FARE Act will become law regardless, thanks to the City Council supermajority. Still, Adams recently voiced concerns about the legislation and is not shy about vetoing “veto-proof” bills just for City Council to subsequently override the order.
Appearing on Pix11, Adams argued that landlords could just spread out the cost of hiring a broker thoroughly monthly rent costs.
“I think that all you’re going to see is this fee passed on to the cost of the rent, and now tenants are going to be paying a [higher] amount of money for that broker fee,” Adams said. “We should have thought this through better, but the City Council is the other arm of government, and they made the decision, and that’s a decision we have to live with.”
To be clear, rent-stabilized units can only be raised up to the annual percentage set by the Rent Guidelines Board, and they account for nearly half of the city’s apartments. Rent-stabilized housing providers who overcharge tenants — including by passing broker fees through illegal rent hikes — can be reported to the Office of Rent Administration.
Broker fees are overwhelmingly levied in more affordable listings while luxury buildings boast their own in-house leasing offices or eat such costs due to less demand, according to a Streeteasy spokesperson. The median asking rent for a “no-fee” apartment is around $4,225 a month, equal to roughly 85% of the median monthly household income for Black New Yorkers (anyone paying more than 30% of their income on housing each month is considered “rent-burdened”).
Further data provided by the popular rental marketplace platform, which houses listings around the New York City area, shows the total overhead for moving into an apartment charging a rental fee averages out to $12,951.
Once the FARE Act becomes law, with or without Adams’s signature, New Yorkers will need to wait another 180 days before the legislation goes into effect, so expect broker fees to remain for what’s left of 2024.
Elijah Fox, a spokesperson for Ossé, said renters will go through traditional oversight agencies when a landlord fails to comply. Any offending housing provider will be hit with a $2,000 fine and forced to repay the broker fee to the prospective tenant.
The “Department of Consumer Protection is going to enforce it,” said Fox. “We hope they do a good job, as we hope that water inspectors make sure our water is clean. The government has responsibilities, and they’ve given them a new one.”
Tandy Lau is a Report for America corps member who writes about public safety for the Amsterdam News. Your donation to match our RFA grant helps keep him writing stories like this one; please consider making a tax-deductible gift of any amount today by visiting https://bit.ly/amnews1.