Powerful NYC brokers group rails against council’s overhaul of rental fees: ‘Law of supply and demand’
The City Council is trying again to regulate brokers’ fees for renters — as part of a contentious overhaul that opponents say will lead to higher rents as the Big Apple grapples with a yearslong housing crisis.
Dozens of people flooded into council chambers on Tuesday — with hundreds more being turned away due to capacity — for a fiery hearing over the Fairness in Apartment Rental Expenses Act (FARE), which would require whoever hires the broker, typically the property owner, to cover the fee.
Rallying the reversal of the decades-old practice is progressive Councilman Chi Ossé (D-Brooklyn), who sponsored the bill and has managed to get a near veto-proof majority of lawmakers to support the legislation.
Ossé has assailed the payment as an unbearable burden to renters, limiting New Yorkers from moving on to better housing due to the hefty upfront costs.
“New York City is one of just two major cities in our nation in which tenants are forced to pay the fee for a broker they did not hire,” Ossé said in the hearing, adding, “That system is bad for the economy, brutal for renters, and plainly unfair.”
But the transfer of fees, which is between 10 and 15 percent of the annual rent, is already facing fierce opposition from the powerful Real Estate Board of New York (REBNY), which successfully killed a 2020 effort to ban brokers fees altogether.
The brokers’ association argued that the change would disrupt an already volatile market by simply leading to renters paying the fee in increased rent, while the council has failed to address the lack of available housing in the Big Apple.
“All these [FARE act supporters] all they preach about is the wealth gap,” Keyan Sanai, a broker at Douglas Elliman griped to the Post following this testimony. “Do you realize that by the rent going up to [cover] the fee the apartments are now worth more? Which will widen this wealth gap?”
Rent in NYC has soared over the last few years — jumping 33% from 2021 to 2022 alone — as the demand for housing continues to outpace supply.
Just four months ago, the city reached a record-breaking 1.4% vacancy rate, according to the Housing Preservation and Development Department (HPD).
One Brooklyn resident, who identified herself only as Stephanie, told The Post at a rally supporting the change outside City Hall that she was unable to move into an affordable rent-stabilized apartment due to the hefty fee.
“The broker proposed that I pay $12,000 to make up for lost profits because I was renting at a stabilized rate,” Stephanie said.
“The brokers’ fees are just completely insane and untenable,” she railed.
Gary Malin, though, who serves as the COO of major real estate brokerage Corcoran, testified that the blame for those housing horror stories should be put back on the council for failing to address the housing crisis.
“It’s the law of supply and demand and if you fix that you will fix pricing,” Malin fumed. “Until then this is just an attack on the brokerage community and it’s unwarranted.”
Council member Sandy Nurse (D-Brooklyn) shot back at the brokers, who filled the council chambers after REBNY drew hundreds to a rally outside City Hall, accusing them of twisting the legislation.
“No one is saying you shouldn’t earn a living, we’re just looking at who’s paying for that, this is pretty simple,” Nurse said.
“I think you’re conflating it intentionally.”
Additional reporting by Haley Brown
