Council passes measure banning broker fees for most New York City renters

Broker fees would be banned for most renters in New York City under legislation passed Wednesday by the City Council with a veto-proof majority to end a practice unheard of nearly everywhere else.

By a vote of 42-8, the council approved the FARE — or Fairness in Apartment Rental Expenses — Act, eliminating a fee a residential renter must pay, sometimes equal to a month’s rent or more, simply to be shown an apartment, have an application be processed and sign a lease.

Technically, the legislation allows broker fees — but the cost would need to be shouldered by whoever hires the broker, which is typically the landlord. It would go into effect 180 days after it becomes law.

The legislation now goes to Mayor Eric Adams to sign, veto or allow the bill to go into effect. If Adams vetoes the bill, it would go back to the Council for an override vote.

A lead sponsor of the bill, Councilman Chi Ossé (D-Brooklyn), helped gin up support for the bill on social media, and returned Wednesday afternoon to post a post-vote celebratory video. 

"Whoever hires a broker pays the fee. So tenants are done paying fees to brokers they never wanted nor hired for apartments they found themselves," Ossé said as he left City Hall.

Bill opponents predicted that landlords would hike rents to market-rate tenants to offset the new costs, and there would be less availability to schedule viewings. Brokers are also worried about their jobs.

Ossé disputed that rent would necessarily rise, saying real estate websites readily provide listings for tenants to find on their own, and noting that brokers can still be employed, but tenants who don't hire the broker wouldn't be forced to pay for the service. 

Councilwoman Vickie Paladino (R-Queens) voted against the bill, thinks the legislation would end up creating a perpetual cost in higher rents. 

"Here we are with yet another law that will only make life more expensive in the end. These fees aren't going anywhere. They are now just going to be built into rents, and rents will go up as a result," she said at the council meeting at which the bill was passed.

Adams, who has not said what he would do with the bill, suggested Wednesday evening on PIX11 News that he doesn't support the legislation: "It was a good intention, but your intention must understand what are the unintended consequences."

Still, he said, "the City Council is the other arm of government, and they made the decision, and that's the decision we have to live with."

The Council had tried in the past but failed to pass a bill restricting broker fees. In 2020, New York State issued a regulation barring tenants from being charged broker fees when the broker is hired by the landlord. The real estate industry successfully challenged it.

By Matthew Chayes

matthew.chayes@newsday.comchayesmatthew

Matthew Chayes, a Newsday reporter since 2007, covers New York City.