A new analysis shows that the average upfront cost of a Big Apple rental apartment, including broker’s fees, has reached an all-time high — nearly $13,000.
According to a study by rental-listing company StreetEasy, this huge amount includes the broker’s cut, first month’s advance rent and security deposit.
The upfront average cost of such a rental is now $12,951 so far in 2024 — the highest it has ever been — and about 47% less than the equivalent, or $8,769, of a “no-fee” rental, the website’s data shows.
In 2023, the average advance amount for units with broker fees was $12,667 and $9,984 in 2019.
The shocking new data was released ahead of the New York City Council’s highly anticipated vote on a bill on Wednesday Remove the burden of expensive broker fees from the shoulders of tenants. The bill appears to have the support of a nearly veto-proof majority.
“The average New Yorker will spend more than 10 percent of his annual income to cover these upfront costs,” Kenny Lee, senior economist at StreetEasy, told The Post.
The website surveyed more than 500 tenants for its study, and more than 80% of respondents said they believed landlords should be responsible for paying brokers’ fees, while 76% said they Said he felt he had no option but to pay the broker’s fees. A Big Apple residence.
“It doesn’t feel like this is something that happens anywhere else,” said Kayla, a 31-year-old Williamsburg, Brooklyn resident, who estimates she paid $4,000 in broker fees for her apartment seven years ago. “Because I did all the work for this (apartment), I feel like I wasted my money.”
Gemma Rowlands, of Melbourne, Australia, told The Post that the broker fee she paid for her first New York apartment in 2018 felt “expensive and unnecessary,” adding that the bill eliminating the upfront cost “makes me Feels good.
“I’m not disappointed in them,” she said of brokers, noting that her experience with her agent was minimal.
Greenpoint, Brooklyn, nanny Isabella Verber told The Post that she has never paid a broker’s fees — and that she would if she moved out of the $2,950-a-month two-bedroom apartment she shares with her boyfriend. Will not be able to afford it.
“It’s very expensive: It’s not $500 or $1,000, it’s at least $3,000 or more,” Werber, 29, said of the fees. “No one will be able to lend me that money. “This will make it impossible to move.”
While broker-fee apartments represent about half of all apartments in the city, according to Lee, most of them are at the lower-priced end of the rental market — which disproportionately serves those struggling with affordability to begin with. Are influencing.
“A healthy rental market is essentially one that has mobility,” the economist said. “Tenants deserve a choice when they think about where to go next. “Often, the cost really hinders their ability to find a place in the city that they can afford.”
Supporters of the council bill termed it Fairness in Apartment Rental (Rent) Act – Says that this measure will help in reducing the financial burden of tenants. But critics argue that it would make rents more expensive because landlords would add the broker-fee cost to the annual lease.
A representative of the Real Estate Board said, “The FARE Act would fundamentally disrupt the New York City real-estate market, driving up rents and making it even more difficult to find an apartment, and everything StreetEasy has proposed addresses those concerns.” ” The bill’s most vocal opponent of New York, The Post.
“New York City’s main problem is the housing shortage, and government policies have exacerbated the problem,” the representative said, referring to the city’s situation. Historically low vacancy rates.
“(Landlords) have to raise the rent to make up the difference, but if the market can’t pay it, they will sell the investment,” a 20-year veteran broker told The Post.
“And if all these landlords sell their investments, that drives rental inventory out of the market, and then supply decreases and rental prices go up.”
The bill’s sponsor, Council Member Chi Ossey, has previously said that even if a portion of the broker’s fee is passed on to tenants as rent, “it would be distributed over the course of 12 or 24 months, reducing prohibitive upfront costs.” “
But Mayor Eric Adams was also skeptical of the bill’s ability to prevent landlords from adding the cost of broker fees back into leases, according to his comments at Tuesday’s press conference.
“We just have to fix it,” Adams said. “I think the bill has the right intentions, but sometimes good intentions don’t materialize.”
Supporters of the measure, including StreetEasy, argue that the bill would help not only tenants, but also brokers – who often work to rent an inventory without the promise of payment.
“Often, landlords work with multiple agents, and the agents who bring in the tenant in the first place are paid by the tenant, not the landlord,” Lee told The Post. “If this bill passes, both landlords and agents will have better clarity on how this essential service provided by brokers will be compensated.
“Once we see this bill, both landlords and agents will have the opportunity to negotiate how compensation will be taken care of, and tenants will finally have a choice as to whether they want to work with a broker. Whether they are or not,” Lee added.
If passed, the law would take effect after 60 days.
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