City Council overwhelmingly approves NYC bill to shift broker fees to landlords’ accounts

The City Council overwhelmingly approved a bill Wednesday that would largely shift the cost of broker fees onto landlords, Shock to real estate industry,

The controversial bill – called the Fairness in Apartment Rental Act (FARE) – passed with a veto-proof majority of 42-8.

New York City is unique in that it is one of the few cities where landlords can hire a broker and pass the broker’s fees on to the tenant.

The law, which takes 180 days to take effect, “will prevent brokers from passing their fees on to tenants where the broker is exclusively representing the landlord’s interests.”

“This bill is common sense. It reflects how every other transaction exists in this country,” said Chi Ossey, the progressive Brooklyn Council member who sponsored the bill.

The council’s overwhelming support for the legislation came as the average upfront cost of a New York City rental apartment with broker’s fees reached All-time high near $13,000According to a recent analysis by rental website giant StreetEasy.

Osse and other supporters of the bill, which had 33 sponsors, argued that it would help ease the city’s housing crisis.

Caroline Burton, general manager of StreetEasy, said in a statement lauding the passage of the legislation, “New York City has a thriving economy and job market, but the ongoing housing affordability crisis puts it at risk, causing thousands of residents to evict each year. Coming out.”

“This bill will remove unnecessary barriers to living here and modernize the rental process to bring New York City on par with nearly every other city in the country.”

But Opponents – including the Real Estate Board of New York (REBNY), which successfully defeated a 2020 effort to ban brokers’ fees altogether – arguing that landlords would add the cost of broker fees to rents, resulting in tenants’ Prices will increase.

Mayor Eric Adams also expressed skepticism about the law, suggesting to reporters Tuesday that there would be nothing stopping a property owner from passing the expense on to a tenant in a lease.

Council President Adrienne Adams, no relation, said she was “surprised” by the mayor’s statements, adding that City Hall had worked with lawmakers on the bill.

“I can’t interpret what the mayor is saying, but the administration was part of the negotiations on this bill. They did not raise any major issues and I have not heard anything from the mayor personally,” he told reporters ahead of the vote on Wednesday.

Queens Councilwoman Vicki Paladino – who was one of eight members to vote against the bill along with fellow Republicans David Carr, Joseph Borrelli, Vicki Paladino, Christy Marmorato, Joan Arriola, Inna Vernikov and Democrats Susan Zhuang and Kalman Yeager – supported the mayor. Repeated the point. Concerns.

“The law is ridiculous. Once again we are manipulating the market, and once again we will see disastrous results,” Paladino said.

“Housing is not unaffordable in this city because of greed, it is largely unaffordable because we have done it to death. And here we are doing everything that clearly has never worked,” she said. “These fees are going to be built directly into fares and fares are going to go up, it’s that simple.”