Here's How The New Broker Fee Ban Is Impacting NYC Renters So Far

NEW YORK CITY — When a bill banning most broker fees became law on June 11, opponents of the law warned that it would cause a spike in renting costs across the market.

Well, it is apartment-hunting season in New York City, but according to a report from New York City's housing listing platform StreetEasy, rents have not skyrocketed in the first month since the law took effect.

The law, called the Fairness in Apartment Rentals Act (FARE Act), shifts the responsibility of paying the broker — the liaison who shows the apartment and strikes a deal between the renter and the owner — to the person who hired the broker, effectively banning the mandatory broker fee many renters have become accustomed to paying.

According to StreetEasy, which supported the law, rents for apartments previously listed with a broker fee have been raised 5.3 percent on average, and rents for apartments without prior broker fees have increased by 4.5 percent on average, consistent with summertime market trends.

So, while the rent may be slowly inching up, the FARE Act hasn't led to a significant spike yet, StreetEasy’s Senior Economist Kenny Lee said.

However, real estate analytics firm UrbanDigs reports different, higher numbers.

Rents in Manhattan spiked 15.7 percent in the first 12 days after the law took effect, according to UrbanDigs, although its researchers said these results may change in the long term.

"At the end of the day, supply and demand remain the main drivers of rent growth," Lee said, adding that the rental inventory is consistent with seasonal trends, following a three-day dip in inventory when the law first took effect June 11.

The current amount of listings in the market is 4.5 percent below last year, but still 40 percent higher than it was in 2022, according to the StreetEasy report.

The FARE Act was first introduced by Brooklyn Councilmember Chi Osse after his own experience trying to find an apartment in his district, which includes Bed-Stuy and part of Crown Heights.

"Tenants have been forced to hand over thousands of dollars in fees to brokers they never hired nor wanted," Osse said in December, when the bill was passed. "You should get what you pay for — and pay for what you get."

Up until now, tenants often had to pay for the broker hired by their landlord, who was representing the landlord's interests, as part of the lease-signing agreement, Osse said.

Since the law took effect June 11, the Real Estate Board of New York has twice attempted to have the rule paused. The judge denied the board's second attempt late Thursday, but the board's appeal will wind its way through court proceedings later this summer, according to Crain's New York Business.

"Our members corroborate reports that market-rate rents have spiked since the implementation of this reckless law — as the industry predicted," REBNY spokeswoman Kay Sarlin Wright told Crain's. "We are continuing our fight against the FARE Act."

"Ultimately, only time will tell how NYC’s rental landscape may change as a result of FARE in the long term, but it appears that the market now is stable and that gives me hope that it will adjust to the new norm," Lee said.

How has the FARE Act impacted your apartment hunt? Email Miranda.Levingston@Patch.com.

See related content:

• A New Law Banning Mandatory Broker Fees Poised To Take Effect This Week
• NYC Council Just Voted To End Mandatory Broker Fees For Tenants
• Two Key Manhattan Reps Quiet On Broker Fee Bill