NYC bill shifting broker fees to landlords overwhelmingly approved by city council

The City Council overwhelmingly approved a bill Wednesday that would largely shift the cost of broker fees to landlords, in a hit to the real estate industry.The controversial bill — dubbed the Fairness in Apartment Rentals Act (FARE) — passed with a veto-proof majority of 42-8.New York City is unique in that it is one of the few cities where landlords can hire a broker and pass the broker’s fee on to the tenant.The law, which takes 180 days to go into effect, will “prohibit brokers from passing their fee onto tenants where the broker is exclusively representing the landlord’s interests.”“This bill is common sense.It replicates how every other transaction exists in this country,” progressive Brooklyn Councilmember Chi Ossé, who sponsored the bill, said.The council’s overwhelming support for the legislation came as the average upfront cost of a New York City rental apartment with a broker’s fee reached an all-time high of nearly $13,000, according to a recent analysis from rental website giant StreetEasy.Ossé and other supporters of the bill, which had 33 sponsors, argued it will help ease the city’s housing crisis.

“New York City has a thriving economy and job market, but the ongoing housing affordability crisis puts that at risk, driving out thousands of residents each year,” StreetEasy General Manager Caroline Burton said in a statement applauding the legislation’s passing.“This bill would remove an unnecessary barrier to living here and modernize the rental process to bring New York City in line with nearly every other city in the country.”But opponents — including the Real Estate Board of New York (REBNY), which successfully killed a 2020 effort to ban brokers fees altogether — argued landlords would build the cost of broker fees into rent, resulting in steeper prices for tenants.Mayor Eric Adams also expressed skepticism about the legislation, suggesting to reporters Tuesday that there was nothing preventing a property own...