Will NYC Renters Finally See the End of the Dreaded Broker’s Fee?

In New York City, a new bill could upend a hurdle in the city’s notoriously difficult apartment hunting process: the broker’s fee, paid for by the renter. Introduced to City Council earlier this year by Chi Ossé, the city’s only Gen Z councilmember, the Fairness In Apartment Rental Searches (FARE) bill doesn’t abolish the fee entirely, but instead forces the fee to be paid by the landlord or entity that hires a broker to help fill rental units.

For many residents—especially those with lower incomes—the fee has long been a scourge. Brokers are hired by the landlord to find potential tenants; though sometimes tenants hire brokers to complete their search on their behalf. It was a system designed prior to the internet, according to a New York Times story, "during a time when landlords and brokers were the gatekeepers to rental units and earned fees for hustling to list apartments in different publications, answering calls, arranging tours, and handling the paperwork."

But for those scouring the internet for a new home, they can be forced to pay the broker anywhere between one month’s rent to 20 percent of the annual rent, according to The City: "though the average rate is 15 percent of the annual rent, some broker fees have been as high as $20,000," reads the story. The Times notes, "For an apartment in Manhattan, where the median rental price is $4,200 per month, the fee could be as high as $7,500." Yet some tenants believe that brokers do little except let people into units.

As Councilmember Ossé claimed in a TikTok video to support the bill, the fee is, "thousands of dollars to someone who just opened the door to a place you found online."

"Or they just gave you a code to a lockbox," adds comedian Ilana Glazer, who also appears in the video.

Proponents of the bill speaking to City Limits note that paying the broker alongside the typical first-and-last-month’s rent is a burden. Covered in City Limits, New Yorkers turned out [last week] to speak, both for and against the bill, at a public FARE hearing. FARE bill opponents, notably the Real Estate Board of New York (REBNY) and its affiliated brokers, raised the issue of rent prices, claiming that if landlords are hit with paying broker’s fees they will simply pass those costs off on to tenants.

But for many tenants, rising rents are happening anyways: High demand is fueled by sluggish affordable housing construction (which REBNY and other FARE opponents claim is responsible for the root problem) and landlords warehousing thousands of rent-stabilized units. And, over the past few years, questions about artificial rent inflation have been raised: A 2022 ProPublica investigation found that software company RealPage’s proprietary software, YieldStar, is used by large corporate landlords to potentially gouge renters by aggregating inventory and pricing data and making "recommendations" for how much to charge, an act akin to price-fixing.

Curbed reporter Lane Brown looked into the software’s use in New York City. "The [RealPage] spokesperson also tells me that RealPage software is only used by property managers of approximately 1.8 percent of New York City rental apartments," they write, "but given the city’s estimated total stock of 2,274,000, that might span 40,932 units." Brown found that Greystar, a megalandlord, owns 25 apartment buildings in Brooklyn, Queens, and Manhattan and "reportedly uses" RealPage’s software.

"They will raise your rent anyway"—due to demand, added amenities, artificial inflation—has become a common theme amongst those residents and tenant organizations working to curb the cost of renting. In New York City, where nearly 41 percent of apartments are also rent stabilized, the claim that FARE would raise rents is indeed dubious.

Top photo by Taylor Crothers/Getty Images

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