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City council passes broker fee bill
Renting an apartment in New York City could soon come with one less fee. The city council just passed a bill that would change the way real estate brokers are compensated. FOX 5 NY’s Morgan McKay has the details.
NEW YORK - New York City renters are pushing back against the steep broker fees they’re required to pay—even when they didn’t hire the broker.
StreetEasy data reveals that in 2024, the average upfront cost for rentals with broker fees in the city is $12,951.
With fees reaching up to 15% of annual rent, many New Yorkers feel squeezed by the additional costs, in addition to move-in expenses.
A StreetEasy survey shows 81% of renters believe landlords, not renters, should pay these fees, and 78% felt they had no choice but to pay a broker fee to secure housing. About 76% say broker fees are a barrier to finding a rental, and 60% indicate these fees prevent them from relocating when needed.
What is the NYC FARE Act?
NEW YORK, NY: Residential buildings Central Park Tower and 220 Central Park South rise above Columbus Circle in New York City. (Photo by Gary Hershorn/Getty Images)
The City Council is set to vote on the Fairness in Apartment Rental Expenses (FARE) Act, introduced by Councilmember Chi Ossé, who represents Bedford-Stuyvesant and North Crown Heights. The legislation would require broker fees to be paid by the person hiring the broker, usually the landlord, rather than the incoming tenant. This year marks Ossé's second attempt to reform the fee system.
As of Tuesday night, the FARE Act has gained 33 sponsors, just one short of a veto-proof majority in the 51-member City Council. A committee hearing on Wednesday will give tenants, agents, and brokers a chance to share their perspectives on how the bill could impact them.
NYC Real estate agents
Jacqueline Kennedy Onassis water reservoir in Central Park, Manhattan in New York City. The Reservoir in NY covers 106 acres and holds over 1,000,000,000 US gallons (3,800,000 m3) of water. The lake is popular for running, jogging, cycling or stroll …
Real estate agents argue that these fees, while burdensome for renters, are critical to their business. According to StreetEasy, 85% of rental agents say that New York’s housing shortage has hurt their business, and 56% spend over 10 hours marketing a single rental listing. Their top pain points include the time (66%) and financial cost (60%) associated with advertising units that don’t guarantee payment.
Opponents of the bill
Looking east from the Hudson River in Riverside Park past the West Side Highway are high rises on the upper west side in Manhattan. A train transfer bridge, on the Register of National Historic Places, remains standing in the water. (Photo by: Deb Co …
Mayor Eric Adams, a former real estate broker, warns that landlords might shift broker fees into the monthly rent if the FARE Act passes, potentially leading to higher base rents. This concern is echoed by real estate agents, who worry landlords will find ways to offset costs.
Councilmember Ossé plans to hold a rally ahead of Wednesday’s vote at 1:30 p.m. If passed, the FARE Act would represent a significant shift in how broker fees are handled, though it wouldn’t eliminate these fees entirely. Instead, it aims to ensure fees are paid by the individual who hires the broker, bringing much-needed transparency to the rental process.