NYC considers ending broker fees for tenants, angering real estate industry
A proposal seeking to eliminate a hefty price tag for New York City renters is drawing fierce opposition from the real estate industry
NEW YORK — It’s a familiar and agonizing experience for legions of New York City renters: before moving into a new apartment, a tenant must first shell out thousands of dollars in fees to a real estate broker, even if that person was hired by the landlord.
The hefty one-time payments, known as broker fees, are ubiquitous in New York but nearly unheard of anywhere else. In most other cities, landlords cover the commission of agents working on their behalf.
But legislation backed by a majority of the New York City Council would require landlords who hire brokers to pay their fees, marking a potential sea change in one of the country’s most expensive housing markets.
Renters, who make up more than two-thirds of city households, are hailing the latest attempt at reform. At a hearing Wednesday, many New Yorkers recalled paying exorbitant fees to brokers who appeared to do little more than open a door to an apartment or direct them to a lockbox.
“In most businesses, the person who hires the person pays the person,” said Agustina Velez, a house cleaner from Queens who said she recently paid $6,000 to switch apartments. “Enough with these injustices. Landlords have to pay for the services they use.”
But the proposal has triggered fierce opposition from New York's real estate industry.
Ahead of the hearing, hundreds of brokers gathered to voice their objections at a rally organized by the Real Estate Board of New York, the industry’s powerful lobbying group.
Through hours of testimony, they warned the legislation would sow chaos in the rental market and decimate the livelihoods of the city’s
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