NYC Bans Landlord-Mandated Broker Fees: A Landmark Move for Renters Amid Real Estate Pushback
In a historic shift for New York City’s rental market, the City Council has passed groundbreaking legislation banning landlords from requiring tenants to pay broker fees for agents hired by property owners. Known as the Fair Access to Rental Expenses (FARE) Act, this legislation aims to end the long-criticized practice of making renters shoulder hefty upfront costs that can reach up to 15% of their annual rent. With the average NYC rental price hovering around $4,000 per month, these fees amount to an average of $7,000—an amount that has priced many potential renters out of moving to new apartments.
As Councilmember Chi Ossé, the bill’s sponsor, stated at a rally after the bill’s passage, “They spent hundreds of thousands of dollars to lobby our politicians to try to kill this bill and try to force you to pay broker fees. But you know what we did: We beat them.” The legislation passed by a vote of 42 to 8, a clear veto-proof majority, ensuring that it will take effect in six months despite opposition from powerful real estate groups.
A Decades-Old System Under Fire
The New York City broker fee arrangement is unique to the region, largely absent elsewhere in the country. Historically, the structure originated when real estate agents played an essential role in publishing apartment listings in newspapers and facilitating rentals by working directly with potential tenants. But with the rise of online rental platforms, digital listings, and self-guided tours, many New Yorkers argue that these fees are outdated and unfair.
New York’s model has long baffled renters from other parts of the country, where it’s typically understood that whoever hires a broker should pay their commission. Yet in NYC, prospective tenants are often asked to cover the broker’s commission even when the agent works solely on behalf of the landlord, leaving renters questioning why they are on the hook for services they never requested.
The legislation is especially significant given that two-thirds of NYC households are renters. With housing costs already among the highest in the nation, the broker fee system has become increasingly controversial. During a City Council hearing on the matter, Agustina Velez, a Queens resident, expressed her frustration: “In most businesses, the person who hires the person pays the person.” She recounted how she was forced to pay a $6,000 broker fee to switch apartments, calling the practice “unjust.”
For renters and supporters of the FARE Act, the elimination of these fees represents a long-overdue step toward housing affordability and fairness in NYC.
Industry Pushback: Brokers Voice Concerns Over Job Security and Rent Increases
The legislation’s passage has not come without resistance. Brokers and industry groups, including the influential Real Estate Board of New York, have warned that the new law could have unintended consequences on the housing market, job security for real estate agents, and rental prices. Jordan Silver, a broker at the prestigious firm Brown Harris Stevens, contends that brokers do much more than “open doors,” describing their responsibilities as including conducting background checks, handling property viewings, and managing complex tenant-landlord interactions.
“This is the start of a top-down, government-controlled housing system,” Silver argued. “The language is so incredibly vague, we actually have no idea what this would look like in the world.” Other real estate advocates have suggested that landlords will increase monthly rent to recoup the lost broker fees, effectively passing the costs onto tenants indirectly. In their view, the elimination of upfront broker fees may ultimately make renting in New York more expensive, even as it becomes more accessible.
The Real Estate Board of New York echoed these concerns in a recent statement, noting that the new policy could “destabilize” the city’s rental market. According to their estimates, NYC is home to over 25,000 real estate agents, many of whom rely on rental fees as a primary source of income. The board warned that if landlords pass costs along to tenants through higher monthly rents, the legislation could have the opposite effect of its intention, increasing rather than alleviating the burden on renters.
Boost for Renters and NYC’s Economic Vitality
Despite the industry’s concerns, supporters believe the legislation will strengthen NYC’s appeal by making it more accessible for young professionals, families, and newcomers. Bradley Tusk, a tech entrepreneur and supporter of the bill, believes eliminating broker fees will help attract talent to the city. “From the perspective of a tech investor and business owner in New York City, the more we can do to make it cheaper and easier for talented young people to come here and stay here, the better off we’ll be,” Tusk stated, describing the broker fees as “nothing more than legalized theft.”
New York renters have also taken to social media to rally for the FARE Act, with influencers and housing advocates on TikTok sharing their own stories of paying thousands of dollars for minimal services. The bill’s popularity among renters speaks to the growing frustration with a system that many feel is unnecessarily burdensome.
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Navigating the Road to Implementation
The FARE Act is scheduled to take effect in six months, a period that will give both landlords and tenants time to adjust to the new regulations. However, Mayor Eric Adams, a former real estate broker, has expressed some hesitation, noting potential unintended consequences. Adams has suggested a desire to work with lawmakers to reach a “middle ground,” but with a veto-proof majority, the Council’s decision leaves limited room for changes.
In the coming months, housing advocates will closely watch to see how the legislation affects NYC’s rental market, as landlords and brokers reconfigure their practices in response to the shifting landscape. While some worry about the possible fallout on rent prices, the prevailing sentiment among New York City’s renters is one of relief and optimism. They see the FARE Act as a way to level the playing field and eliminate one of the rental market’s most controversial expenses.
Whether landlords will find ways to pass these costs on to tenants indirectly—or if this legislation will indeed deliver long-term savings for NYC renters—remains to be seen. For now, however, the City Council’s decision represents a major win in the battle for tenant rights and an encouraging step toward making New York City a more accessible place to live.
