The FARE Act, passed by the New York City Council, shifts the responsibility of broker fees from tenants to landlords, aiming to reduce financial burdens on renters.
MOHAMED FARGHALY
mfarghaly@queensledger.com
New York City renters will no longer shoulder the cost of broker fees for agents hired by landlords, following the passage of the Fairness in Apartment Rental Expenses (FARE) Act. The City Council approved the legislation on Wednesday in a 42-8 vote, shifting a financial burden that has long frustrated tenants in one of the nation’s most expensive rental markets.
The FARE Act mandates that the party who hires a broker — typically the landlord — must cover the broker’s fee. These fees, which average 12–15% of a year’s rent, often amount to thousands of dollars. For example, a broker fee for a $3,000-a-month apartment can total $5,400. The law also requires landlords and their agents to disclose these fees upfront in rental listings and agreements, a move aimed at increasing transparency.
The legislation will take effect in 180 days, fundamentally altering a rental process that has set New York apart from most other cities, where landlords typically pay broker fees.
Advocates of the FARE Act argue the law will eliminate the longstanding practice of tenants being forced to pay for brokers who solely represent landlords’ interests.
However, critics warn the measure could backfire, leading to higher rents as landlords seek to offset the added cost. While rent-stabilized apartments are protected from such increases, market-rate units could see adjustments, opponents say.
The legislation comes at a time when rents in New York City continue to climb, adding financial strain to renters already grappling with record-high housing costs. In October, the median asking rent in Manhattan reached $4,200, a sharp increase compared to pre-pandemic levels.
The city’s real estate industry, which lobbied heavily against the bill, argues that broker fees reflect the work brokers perform, such as coordinating showings, conducting background checks, and managing communication with landlords.
Still, tenant advocates have long pushed for reforms, especially as virtual tours and online listings reduce the need for traditional broker services. The COVID-19 pandemic further accelerated this shift, leaving many renters questioning the necessity of steep broker fees.
Courtesy Freepik
While advocates praise the move as a step toward affordability, critics warn it may lead to higher rents as landlords adjust to the new costs.
With the FARE Act now signed into law, New York City joins other metropolitan areas in redefining the rental process — though its impact on rents and the broader housing market remains to be seen.
Thomas Chimber, who moved to New York City from Syracuse late last year, is entering the real estate industry at a pivotal moment. After obtaining his real estate license over the summer, Chimber was thrilled to land a position with the Corcoran Group in Manhattan. However, just days into his first week on the job, the announcement of the Fairness in Apartment Rental Expenses (FARE) Act sent shockwaves through the real estate world, reshaping a longstanding dynamic in New York City’s rental market.
While some newcomers to the field might feel daunted by such a major shift, Chimber views the change as an opportunity rather than a setback. He believes the FARE Act could have an indirect but significant impact on how prospective buyers and renters approach the housing market. The increased transparency and reduced upfront costs for tenants, he suggests, could encourage more people to explore their options and make decisions more confidently, which would ultimately benefit the industry as a whole.
“I’m just excited to be starting my career in such a dynamic market,” Chimber said, emphasizing that adapting to change is part of what makes New York City real estate both challenging and rewarding. Despite the uncertainties brought about by the new legislation, he remains enthusiastic about the opportunities ahead and is eager to help clients navigate the evolving landscape.
Nick E. Smith, Executive Director of Communities Resist, expressed strong support for the FARE Act following its passage by the New York City Council. Communities Resist, a housing legal services organization led by people of color, focuses on preventing gentrification and displacement in low-income communities.
“For far too long, renters across this city have faced exorbitant broker fees. With rents soaring, these fees are another obstacle to New Yorkers trying to find an affordable place to live. The Fairness in Apartment Rental Expenses (FARE) Act is a critical step towards combating our housing crisis and helping New Yorkers find a place they can afford to call home. I applaud Council Member Ossé for introducing this critical piece of legislation. I look forward to seeing the FARE Act become law as soon as possible,” Smith said.
