NYC decides on who should pay broker fees amid affordable housing crisis
Traditional tenement buildings are now expensive rental apartments, November 4, 2022 on Orchard Street in the Lower East Side neighborhood of New York City, New York. (Photo by Andrew Lichtenstein/Corbis via Getty Images)
NEW YORK - New York City renters say they are tired of paying for brokers they never hired, in addition to move-in fees.
In the city, rental broker fees can be as much as 15% of the annual rent, regardless of whether they hired the broker themselves.
On Wednesday, the City Council will decide on the Fairness in Apartment Rental Expenses Act, also known as the FARE Act.
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NYC rent: Who should pay cost of broker fees? City Council hearing scheduled
NYC is one of the only cities in the U.S. where tenants are slammed with broker. Under a new City Council proposal, that may not longer be the case.
Real estate agents, on the other hand, argue that these fees are necessary and that landlords will find other ways to squeeze them into the bottom line.
City Councilmember Chi Ossé, who represents Bedford-Stuyvesant and north Crown Heights, is trying, for a second year, to change the way these fees work.
The bill doesn't eliminate broker fees entirely though.
Instead, it would require any broker fee associated with a residential real estate transaction for a rental property to be paid by the individual who hired the broker to facilitate the transaction.
After more than a year, the proposal will be debated at a committee hearing on Wednesday.
The committee will hear from tenants and real estate agents and brokers about how the bill would affect them, as well as other services they provide.
Currently, most landlords who bring a broker in make the incoming tenant pay, and renters say that's unfair.
So far, Ossé's bill has 33 sponsors in the 51-member City Council, which is one vote away from a veto-proof majority.