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NYC broker fee bill set for Council committee hearing on Wednesday
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Phil Corso
Published Jun 10, 2024
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ALEX KENT/AFP via Getty Images
By
Phil Corso
Published Jun 10, 2024
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A New York City Council proposal that would change the way landlords and tenants pay real estate broker fees will be up for debate at a committee hearing on Wednesday.
Intro 360, also known as the Fairness in Apartment Rental Expenses (or FARE) Act, would require whoever hires the broker — whether a tenant or landlord — to pay the broker fee. The measure, which was crafted to protect tenants from having to pay for a broker they did not hire, is scheduled for discussion before the Council's committee on consumer and worker protection on Wednesday at 10 a.m. — not long after groups for and against the bill are expected sound off on the steps of City Hall.
"A party that purchases or contracts a good or service should be responsible for the cost," said Councilmember Chi Ossé of Brooklyn, who introduced the bill, in a statement. "This is the case in every other transaction across our vast economy, and should be true for New York City Rentals as well. The FARE Act has the potential to alleviate prohibitive upfront costs for workers and growing families searching for a new home."
The bill would not ban or cap broker fees, Ossé said. Prospective tenants are often hit with the fees when they sign leases for homes in the city, and the fees usually range from one month's rent to about 15% of the annual rent. Sometimes, though, they are even higher.
Ossé's measure has 31 cosponsors in the Council and support from several local labor unions, including the Retail, Wholesale and Department Store Union, which represents thousands of workers in New York City.
"Every day these workers have to make tough financial decisions in order to make ends meet,” said Stuart Appelbaum, the union's president, in a statement. “The FARE Act would help reduce one burdensome and unnecessary cost placed on tenants: broker fees."
Councilmember Shaun Abreu of Manhattan, one of the bill's cosponsors, said whoever hires a real estate broker should have to pay for their services, adding that making such a change is "long overdue."
"Nearly every major U.S. city enforces this basic principle — except for New York City," he said in a statement. "It's time to change that by passing the FARE Act," Abreu said in a statement. "I am proud to stand with tenants, with labor, and Council Member Ossé to usher in a better housing policy for our city — one that protects tenants, ensures fairness in the renting process, and makes housing more affordable."
But not everyone supports the measure.
Sam Spokony, a spokesperson for the Real Estate Board of New York, previously told Gothamist that his organization opposes it. “We believe it’s not going to achieve the goals the councilmember stated and will create a number of new challenges,” he said in an interview last year.
Others, like Douglas Wagner of the real estate firm Bond New York, have said that if the legislation becomes law, local landlords could pass any costs back onto tenants through higher rents and more expensive lease renewals.
Hundreds of real estate professionals are set to stand with REBNY on the steps of City Hall at 9 a.m. on Wednesday to argue that the legislation would harm both agents and renters. Groups in favor of the bill are also expected to rally at the same time and location.
Efforts to cap broker fees have struggled in recent years at the city and state levels.
Neil Mehta contributed reporting.
Tagged
new york city
housing
new york city council
broker fees
Politics
real estate
Phil Corso
Phil Corso is the evening news editor at WNYC/Gothamist. Got a tip? Email [email protected].
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