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NYC Council set to vote Wednesday on bill shifting broker fees from renters to landlords
By
David Brand
and
Elizabeth Shwe
Published Nov 12, 2024
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Spencer Platt / Getty Images
By
David Brand
and
Elizabeth Shwe
Published Nov 12, 2024
Share
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The New York City Council is set to vote on Wednesday on a bill that would eliminate a steep upfront cost for most renters trying to move in the five boroughs: broker fees.
Unlike in nearly every other part of the country, New York City tenants often pay a one-time fee before signing a lease to a licensed agent who is usually hired by the landlord to list or show the apartment. That fee typically equals about 15% of the yearly rent total — $5,400 for a $3,000-per-month apartment, for example.
The bill before the Council would instead require whoever hires the broker to pay their fee. Tenants would still pay the fee if they hire the broker in their search for a rental unit.
The legislation had 33 sponsors as of Tuesday night, one short of a veto-proof majority and seven more than the simple majority needed to pass. It was authored by Councilmember Chi Ossé of Brooklyn, who has frequently taken to social media to promote the bill since last year.
An analysis by listings website StreetEasy, which supports the measure, found renters pay an average of $12,951 in upfront costs for apartments subject to broker fees. StreetEasy’s general manager Caroline Burton said the legislation “provides immediate relief to renters today.”
Opponents, including the Real Estate Board of New York, a major trade group, have said the measure could lead to higher rents overall. They’ve argued that landlords could bake the broker fee into monthly rents, except in rent-stabilized apartments where annual increases are set by a panel of mayoral appointees.
Dev Awasthi, REBNY’s vice president for legislative affairs, said renewal leases would also be higher under the bill.
“All those costs are going to end up going to the tenant as they end up paying more per year based on the no-fee than they would if they paid the one-time broker fee,” said Awasthi. “If that tenant would like to re-sign their lease, they’re now starting at a higher rent.”
“We don’t want to be forced into a situation to raise rents,” he continued.
But supporters have said they don’t think landlords would raise rents if the bill passes. They’ve argued that it would lift a hefty cost that can prohibit many renters from moving at all.
“You don’t buy a rental property and then just set the rents based on whatever your expenses are," said Anna Klenkar, a real estate broker for the firm Sotheby’s. “You look at the market and you see what tenants are willing to pay.”
Even if a landlord did factor the broker fee into the rent, she added, “it still would be less to tenants overall, and it would not be done as an upfront fee that really keeps a lot of people stuck in situations and also allows landlords to negotiate higher than fair-market renewal rents.”
Mayor Eric Adams has not taken a firm position on the measure, but said on Tuesday he was concerned about its potential impact on “small property owners” and tenants who could face higher rents.
“The bill has the right intentions,” Adams said. “But sometimes good intentions do not get the results you’re looking for.”
Tagged
Politics
renting
new york city
housing
City Council
brokers fees
real estate
David Brand
David is a reporter covering housing for Gothamist and WNYC. Got a tip? Email [email protected] or Signal 908-310-3960.
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Elizabeth Shwe
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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