NYC broker fee bill could lead to higher rents, mayor says
NEW YORK (PIX11) – A New York City Council bill that will shift the burden of paying broker fees to landlords could have “unintended consequences” that lead to higher rents, Mayor Eric Adams said.
The New York City Council passed a bill on Wednesday that requires landlords to pay the fee when they hire a real estate broker to market their properties. Right now, renters generally pay the broker fee upfront, instead of the landlord who typically hires the broker.
The new legislation is meant to help increase affordability for renters.
“The Council is proud to pass this historic bill to protect our city’s renters, ensuring that tenants aren’t on the hook for fees for services they did not request," New York City Council Speaker Adrienne Adams said.
However, Mayor Adams said the legislation could have “unintended consequences” and result in some landlords baking in the cost of the broker fee in the monthly rent, resulting in renters paying more over time.
“I think it was in good faith what they wanted to accomplish,” Mayor Adams said. “But [there’s] nothing in the bill that states if your broker fee was $800, [there’s] nothing stopping a landlord from making that broke out into the rent payment. So instead of having a one-time $800 fee, if the landlord adds $80 on the bill per month, within the year, you’re going to pay more than the $800. And within five years or 10 years, you’re going to be continually paying for that same fee.”
When asked about this possibility, New York City Council member Chi Ossé, who sponsored the legislation, noted that most tenants would rather not pay the broker fee upfront.
“The average cost of first-time fees for moving into an apartment is over $10,000. Eliminating that cost and splitting it up over 12 or 24 months allows people to move into new apartments,” Ossé said.
The New York City Council passed the legislation with a veto-proof majority.
Under the legislation, if a tenant hires a real estate broker to help them find a living space, they are still responsible for those fees.
If there are any fees that a tenant must pay, the amount must be disclosed in the listing and rental agreements.
Landlords who violate the new rules will face penalties. The New York City Department of Consumer and Worker Protection will enforce the legislation.
Finn Hoogensen is a digital journalist who has covered local news for more than five years. He has been with PIX11 News since 2022. See more of his work here.