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City Council votes to relieve renters from paying broker fees with veto-proof majority

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City Council Member Chi Ossé rallies with council members and advocates before the passage of his bill to relieve tenants from having to pay broker fees in most cases.
Photo by Ethan Stark-Miller

The City Council on Wednesday overwhelmingly voted to free New York renters from having to pay costly real estate broker fees — passing legislation that will make the party who hires a listing agent responsible for footing the bill.

The legislation passed by a veto-proof majority of 42 to 8 — with the “no” votes coming from Republicans and conservative Democrats. While Mayor Eric Adams has not said whether he intends to sign the bill, he vented concerns about it during a Tuesday news conference.

Mayoral spokesperson Amaris Cockfield, in a statement, said “we are closely watching this bill, and look forward to working with the Council to make this city more affordable for New Yorkers.”

Proponents of the FARE (Fairness in Apartment Rentals) Act, as the bill is called, say it will remove a significant financial hurdle to New Yorkers being able to afford apartments because at present, renters are often on the hook for paying broker fees. The legislation would effectively mandate that if a landlord is hiring a broker, as they do in many cases, they will have to pay the fee.

Supporters say broker fees — which can cost an average of 15% of a tenant’s monthly rent — represent a substantial upfront cost that can be a barrier to apartment renters.

At a City Hall press conference prior to the vote, Council Member Chi Ossé (Brooklyn-D), the bill’s prime sponsor, said the legislation would relieve tenants of having to foot the bill for brokers they often did not hire.

“In too many millions of cases across our city and decades of history, tenants have been forced to hand over thousands of dollars in fees to brokers they never hired nor wanted. The harm of this practice cannot be overstated,” Ossé said. “Today is a win for the people of New York as we make official what has long been common sense: you should get what you pay for and pay for what you get.”

The city Department of Consumer and Worker Protection would enforce the legislation, according to the council. Those who violate its terms would be subject to fines that could reach $2,000.

The council passed the measure as the city is experiencing an acute affordable housing crisis. This crisis has caused rents to soar, with only 1.4% of rental units were available last year.

Upper Manhattan Council Member Shaun Abreu (D), another key sponsor of the bill, called the legislation ” seismic.”

“For many of us, it’s gonna make all the difference for our families,” Abreu said. “It’s gonna be the difference between being able to have an apartment or not being able to have an apartment.”

The council member said that in his district, many renters have to cough up $12,000 to $15,000 just to rent an apartment. That sum includes first month’s rent, a security deposit and a broker fee.

On the other hand, real estate industry leaders charge the bill would raise rather than lower costs for renters. They argue that in order to offset the cost of paying for brokers themselves, landlords will bake the cost into the montly rent. Therefore, they argued, tenants would end up paying more every month for the duration of their lease instead of a one-time fee.

Real estate industry leaders also contend that renters currently have the freedom to choose between apartment listings that come with broker fees and those that do not; the legislation would, they say, remove that choice.

Far-right Council Member Vickie Paladino (R-Queens) railed against the bill before voting against it. In addition to increasing rents, she argued it would hurt small businesspeople — meaning real estate agents — and force thousands of units to go unadvertised.

“I sincerely hope that the real estate industry sues to have this law stopped,” she said.

Adams has echoed some of the same arguments. While he said he agrees with the bill’s intent, he believes it could have unintended consequences that will hurt real estate brokers and renters.

Following the bill’s passage on Wednesday, the mayor said in a Pix11 interview that “we should have thought this through better.”

“The City Council is the other arm of government, and they made the decision, and that’s the decision we have to live with,” he added.

However, City Council Speaker Adrienne Adams said she was surprised to hear the mayor airing concerns about the bill considering his office was involved in crafting it.

“We worked together with the administration on this bill, and I can’t interpret what the mayor is saying, but the administration was a part of the negotiations on this bill,” the speaker said. “They raised no major issues, and I haven’t heard from the mayor personally on it.”