NEW YORK (1010 WINS/WCBS 880) — A New York City Council member has reintroduced a bill that would shift the responsibility of paying a broker fee to whomever hired the broker, cutting costs for renters apartment hunting in the city.
The Fairness in Apartment Rental Expenses (FARE) Act will be heard on June 12 at City Hall, and Brooklyn Councilman Chi Ossė believes its passing is necessary to end an unjust practice.
"[A broker] is an individual who's usually hired by the landlord. But when you're a tenant, and you're at your lease signing, you see that you have to pay this broker fee to this broker that your landlord hired, which is extremely unfair," Ossė, who introduced the bill, told 1010 WINS/WCBS 880.
When moving into a new apartment, New Yorkers need to pay a security deposit, first month's rent and, often, a broker fee. Broker fees are paid to real estate agents as a commission for helping rent a unit.
Broker fees are typically between 10% and 15% of the unit's annual rent, but there is no cap on these fees in the state of New York. According to Zillow, the median rent in NYC is $3,550—producing an average broker fee of $4,260 to $6,390.
While a tenant can hire a broker to help them find an apartment to rent, they are often enlisted by landlords trying to fill a property vacancy. For Ossė, it is a matter of putting the responsibility on whomever wants the broker's help.
"Eliminating this fee for tenants, or at least shifting the responsibility on whomever hires the broker, will definitely make a dent in the housing crisis that we're seeing in New York City," he said.
Ossė said that nationally, only Boston follows NYC's broker fee system. The FARE Act does not cap nor ban broker's fees; instead, he said it aligns it with the rest of the U.S. market and helps working-class New Yorkers who "do not have $10,000 on hand."
"We're just trying to make this bill replicate how this industry exists in every other major city in the United States of America, right? Whatever you hire or order, you pay for," he said.
The bill was reintroduced on Feb. 28, after its initial introduction in June 2023.
According to reporting by the New York Daily News, the bill—which at the time had 25 co-sponsors, a simple majority on the council floor—was not granted a hearing due to a private deal between the Real Estate Board of New York and then-Bronx Councilwoman Marjorie Velazquez, head of the Consumer and Worker Protection Committee.
At the June 12 hearing for the bill, the new committee head, Councilwoman Julie Menin, and six committee members will decide what happens with the FARE Act. There are currently 26 co-sponsors of the bill.
The REBNY, a politically influential trade association, has been in open opposition to the FARE Act since it was first introduced. The group is hosting a rally against the bill outside of the June hearing at City Hall, and has set up a page allowing people to sign up for the rally, email and send social media posts to their NYC Council representatives.
"The legislation, known as Intro 360, would drastically change the residential rental market by eliminating the ability to negotiate who pays a commission—leading to greater confusion, less transparency and additional costs for many renters," the rally page reads.
When reached by 1010 WINS/WCBS 880 for additional comment, a spokesperson for the REBNY said: "This legislation will penalize hardworking rental agents and make it harder to find and more expensive to rent an apartment. Rental agents add significant value to the home search process for renters and we will fight for fair compensation for their hard work."
In an interview with CBS, Ryan Monell, of the REBNY, said that the bill would cause rent increases and that the city isn't equivalent to markets across the rest of the country.
"New York is its own animal, right? And I think it's a misconception to assume, if this bill were to pass, it would just automatically become what the rest of the country has," he said.
Ossė disagrees with this notion, telling CBS "If your landlord could have raised your rent by tomorrow, he would have yesterday."
In a video on social media explaining the FARE Act and asking for support, Ossė states that despite a majority of the council signing on last year, "big money killed the bill."
"This year, we're going to win," he continues. "This could be the city's most significant renters legislation in recent memory."
