For several years, New York City politicians have tried to legislate rental broker fees as a quick fix to the city’s housing crisis. Unfortunately, this approach distracts from real solutions like building more housing to address the supply shortage driving up costs. It also jeopardizes fair compensation for hard-working real estate agents across the city. A City Council hearing is set for June 12th, and industry experts will once again have to explain why this kind of legislation will make it harder for brokers to earn a living while doing little to ease costs for renters.
Beyond the lack of policy substance, the dialogue around this bill is frustrating because it misrepresents our work and who we serve.
Residential rental brokers do much more than just open doors for listings found online. We populate home search platforms with quality photography and market data, providing renters with a wide range of options and the information they need to make informed decisions. This effort requires significant resources and time dedicated to creating content, conducting research, and performing analysis.
We coordinate showings, allowing potential renters to view apartments before signing leases. We provide market knowledge of nearby properties and neighborhoods. Without brokers, renters might have to rely on lockboxes or coordinate viewings with current residents—if they can even see the apartment at all before applying for the lease.
Licensed agents offer invaluable expertise. They undergo rigorous training and continuing education, including on crucial subjects like fair housing laws and ethical practices. Renters benefit from having a third party involved to ensure transparency and fairness, protect them from bad actors, and facilitate a smoother rental process.
Finalizing residential lease transactions involves extensive background checks, notarizations, and processing of financial and legal documents. These steps provide both renters and landlords with security when entering a 12-month rental commitment.
The proposed bill suggests that the party hiring a broker should pay the broker. However, brokers provide essential services to renters in every transaction, regardless of who hires them. Shifting the responsibility of agent fees to landlords will inevitably lead to higher rent prices. Landlords will need to recoup these costs, and the most straightforward way to do so is by increasing rent, ultimately making housing less affordable for tenants. Smaller landlords, who make up most of the rental market, may not be able to absorb these costs, leading to fewer broker services available.
Landlords may become more selective about the properties they list with agents, reducing the availability of rental units. This reduction in market listings can exacerbate the already tight housing market in NYC, making it even harder for tenants to find suitable homes.
These outcomes are detrimental to everyone. By eliminating the tenant-paid fee structure, many agents who rely on commission-based income may face financial instability, potentially reducing the quality and availability of their services.
Brokers care deeply about renters and are passionate about helping them find homes in New York City. On June 12th, we plan to fight for the interests of renters and our industry.
