Long overdue
8
deBlasio is doing a great job. Makes me wish I was a Democrat living in the Big Apple!
7
@Kurt Pickard Am I correct to assume that your sarcasm font is on?
9
sounds like renting an apt in nyc is still one of the most horrible life experiences one will go through whilst living here ...
28
@AC Yeah, I've had panic attacks.
7
There are websites out there now that are focused solely on getting renters into buildings that do not require a brokers fee. What many first time New Yorkers don't realize is that if you rent directly from the source/landlord, you save the few thousands dollars on broker fees because they are not involved in the process. Sites like www.transparentcity.co, joinery.nyc help eliminate that. The best way to cap shady fees are to cut out of the shady middlemen.
22
So the "sophisticated landlords" are having difficulty implementing the new rules?
How difficult is it to NOT charge a $400 processing fee or NOT charge $100 for a credit check?
29
@Hugo no, the broker is charging these fees, not the landlord. Perhaps read the article first?
5
@Andrew Historically, the broker generally received no money from the application process itself -- only the broker fee. (I was a RE broker in NYC until recently.) I'm guessing from the article, that the landlords are routing these funds through the brokerages to skirt legal issues with this new law?
12
The pendulum swings. Right now in America the pendulum had swung decidedly and greatly in favor of business and capital. The worst abuses are perpetrated by medical, legal and real estate, often in tandem with each other.
It will take many years for a meaningful correction to occur. A fair society for the average citizen is the product of much effort, by many honest, unselfish people, carried out with good intentions. We’re not even at the peak of the abuses yet, so it’s going to take a while, I’m afraid.
6
NY Times needs to check out Kraham Realty in Rego Park. They are the broker for rent stabilized buildings. They tell you that the broker fee is equal to one month's rent, and purposely inflate the amount of the rental by about $50 to jack up their fee. Then when you get the actual lease in the mail, lo and behold the actual monthly rent is about $50 lower than what you were told by Kraham. Great! Lower rent, right. The Kraham scam broker keeps the overcharge on the broker fee.
23
I have no way of determining the political affiliation of the individuals who are overcharging for these fees, but my gut-level prejudice is to feel that they are likely R’s.
That aside, this law appears to provide just the sort of legislation that the R’s hate and which they propagandize against: regulations that protect regular people from being plundered for financial gain by individuals who are able to straddle a choke point in the commercial environment.
It isn’t enough that real estate in a city like NY has been priced into stratospheric territory. Supply and demand, say the R’s, the perquisites of a free-market system. Because they can, this type of parasite seeks to further leverage a high demand environment and extract exorbitant fees to further enrich themselves.
This is just more evidence of why regulations are needed to constrain the greed of the rich and powerful, who will use their position to increase their privilege and their wealth. Free market principles are not some open ended invitation to use the concept of “what the market will bear” to enrich oneself beyond reason. There is plenty of historical evidence of the dangers of allowing this type of exploitation, not only because some consumers will be bilked, as in this case, but in many other situations for the health and safety of a community.
Despite the R’s holier than thou defense of free markets, there is a need for reasonable regulation.
8
@Marshall Doris Hi, Democrat here. New York’s real estate market is not even close to a free market. In fact, it is as regulated, if not more regulated, than most parts of our economy, with Byzantine code dictating how each plot can be used, how y’all it can be, (often) what rent can be charged, and so on and so forth. You may not believe it, but the overregulation is what opens it to exploitation and creates all these perverse incentives you are observing. We have our hearts in the right place usually, but stupid populist policy, even from the left, is still stupid populist policy no matter how good hearted it is.
7
It appears this is not an issue of policy, but one of enforcement. To whom should renters contact when they are faced with these illegal fees?
26
This problem will only fix itself when the REI and related industries run out of easy marks falling all over themselves to live in NYC. A severe depopulation trend owing to a proportionate increase in educated consumers about the many, many cons of trying to rent in the City can and should bury shady tactics like this into permanent disuse -- unfortunately everyone whose cushy lifestyle is lined with exploitative practices like described often find new and unhappy ways to separate the ignorant and desperate from their hard earned dollars...
5
It’s time that landlords are reviewed and ranked . Surveys go out each year and the landlords that score highly among their tenants and city regulatory agencies are rewarded monetarily. It’s all about money.
3
*and profiting with often little regard for the tenant and city and state laws
1
I was listening to two people talk about applying for an apartment when I happened to overhear Shelly Silver at the next table talk about his future. He said he was going to teach a course on Ethics in Politics at the New School this Fall.
5
Laws may change, but illegal fees will go on forever. About ten years ago, we found a rent stabilized apartment we liked at a price we could afford, listed directly by the landlord. But lo and behold, when it came time to sign the lease, we discovered that in addition to our various deposits, the landlord wanted to charge us a $1k "finder's fee" -- paid directly to her personally, I suppose to keep the money off the company books. Well, of course we paid it. We'd looked for three months at apartments that were either too expensive, too small, too decrepit, too inconvenient, or all of the above. Reality isn't fair, but we wanted the apartment, and we've lived there ever since.
22
Twenty five years ago, I was an (ahem) twenty something young person, in need of an apartment. I was starting to make a decent salary. I had modest expectations. It should not have been that hard, but I could not find anything bigger than a small closet. Literally a small closet. IN fact, when I inevitably found a roommate to live with, I did, in fact, move into the master bedroom closet. It's amazing what a loft, and some creativity, can accomplish.
....but here is the thing. I did not come from money and I had very little saved. I could not afford the brokers back then. I remember feeling a bit of envy at the kids who had parents who could write checks.
Recently, our niece needed an apartment. When she began to tell me her tale of woe, I thought she was full of it. Her parents did, too. Then they begin to look and they gave me an education.
I am not sure of the NY of today would have sustained the me of twenty years ago. I don't know how I would have ever been able to afford all the arbitrary fees and high rents. At a certain point you have to wonder what a city loses when it pushes out everyone but the bloated.
25
@Gwe
It’s actually a myth that NYC is unaffordable.
Believe it or not there are still plenty of cheap places in safe neighborhoods in the outer boroughs that are an easy commute to midtown Manhattan. The problem is everyone feels entitled to live in Manhattan or the trendy parts of Brooklyn.
Besides, the recent strengthening of the rent regulation laws has actually made the city far more unaffordable for anyone not in a rent regulated apartment.
This is especially true for a young person trying to move into Manhattan.
12
@Sherman
It is a myth with a few shreds of truth - holdout areas that haven't had the attentions of mega-developers and Density-or-Die yimby's turned on them fully *just* yet; immigrant enclaves, places that are majority non-white, etc...sfm, I don't really want a huge influx of newcomers willing to part with far more dollars than established residents already at the limit of what they consider "affordable" just to Columbus the next LIC/Wmsburg/Astoria/etc.
2
@Sherman
You can't be serious. Must be a landlord.
8
Why would anyone want to live in New York? No wonder the NYT editorial priorities seem so weird and out of touch. Those fees are an outright greedy money grab. I'm a bit surprised they are allowed to get away with it, by the people of the city. Here in backward Louisiana a broker who tried such nonsense would have their license revoked rather quick. It's easy to report such abuse to the real estate commission, and the infractions of the evil doers are published for all to see. They couldn't stay in business.
If I ever got a job offer in New York the employer would have to pay for my housing.
11
My daughter and her husband moved to Brooklyn last year for his medical residency program and had to pay the first months rent of $2,500 upfront, another $2,500 for a deposit and another $2,500 to the broker. I can't wait until they com back to Kansas! I can't afford this!
7
Isn’t first month rent and 1 month security deposit pretty standard anywhere in the country you rent???
I’ve also paid modest broker fees outside of nyc as well when the housing market was tight.
Is there anywhere in the country you wouldn’t pay a security deposit or first months rent for a legitimate apartment?
6
I recently secured a rental through Citi Habitats, the same brokerage firm as Ms. Miscolta-Cameron. My roommates and I had to pay more than $15,000 up front just to "take the apartment off the market," about $7,600 of which went towards a nonrefundable broker fee. Imagine that, paying someone nearly 8 grand to open a door and show you an apartment. These laws were enacted to protect renters from predatory practices, yet they seem to have been written in a very slipshod manner that basically allows the same practices to continue. I find it hard to believe that no one involved in the drafting process realized that brokers would be exempt from the changes, considering they are usually the worst offenders when it comes to gouging renters. If lawmakers are serious about protecting consumers, they need to write comprehensive legislation that actually strikes at the heart of the issue - aggressive broker fees and loopholes in the law. Otherwise, inexperienced renters will continue getting extorted, and eventually NYC will only be populated by people who can afford to lose tens of thousands of dollars during an apartment hunt.
42
You could've rented a house in Nanuet, bought a used car, and paid tolls for a year with that money.
4
Brokers add nothing to the process of finding an apartment but their own obstructions. Ironic that they make money on both ends of the deal. The ones who should be paying are the owners of the building, not the people looking to rent. And if the unit isn't rented to us in the end we should get a refund on the application fee.
My experience with trying to rent and renting is that some landlords are excellent and really care about the places they rent. Some let the places fall apart, do not keep their end of the bargain, and shouldn't be landlords of anything.
The truth is that we need, in all areas of the country, more affordable housing and much less luxury housing.
27
Live somewhere else, Natalie! I lived in NYC for 5 years when I was a child, courtesy of my father's employment. I enjoyed those years. But I wouldn't choose to live there now. I choose to live in a lovely house near the ocean in North Carolina, where I can afford a much higher quality of life for much less money than NYC. Get out of there. Now. We'll be glad to have you here in Wilmington where we have a university, community college, movie business, fresh air, international airport, and just a 4-hour drive to ski resorts in the mountains.
9
@hen3ry Her "job" sounds iffy and not providing sufficient income for NYC. She could do much better here, with much lower cost of living, and we've a community college where she could upgrade her skills. If you're 60 you can upgrade your skills; be flexible. Sounds like you have an attitude problem which needs adjustment.
1
@Anne Russell North Carolina sounds lovely, it's great to love where you live. I'm happy here. There is nothing iffy about my job and career. My salary to cost of living ratio is very healthy and I am very lucky. I was approved based on income, bank accounts and credit history. I also have a BA, graduated with straight A's and honors. I'm not looking to 'upgrade my skills' as it's not necessary for my career and wouldn't provide a good return on investment at this point. I spoke up on principle. There are plenty of people who pay far more than I did, and many people who have to keep on searching because these fees aren't doable.
21
@Anne Russell Actually, it doesn't sound to me at all that @henr3y is the one with the attitude problem.
5
New York apartment Brokers are the shadiest people out there.
I believe I had to pay ~$2,000 in broker's fees in NY. $500 of that in cash. The remaining $1500 payment, I had to leave work and go all the way uptown to give a cashier's check at the broker's office. He refused to meet me at my office and threatened to give the apartment away to another applicant if I didn't. I literally thought they were just messing with me at one point.
In the end, I'm still not sure what the broker did. He added no value to the transaction and basically just held this apartment hostage to extract a fee from it.
When I moved out early, a broker offered to show my apartment. I said sure. All of sudden, every Craigslist ad I would place for my apartment would be flagged instantly and removed. For what I couldn't get an answer. So this allowed the broker to be the only avenue for people to discover the apartment, insuring he'd get a fee.
Don't forget, New York Real Estate is where Donald Trump came from.
52
Want this nonsense to stop? Round up the brokers who charge these fees, and let them spend a week in Rikers.
31
I hope that despite Natalie Miscolta-Cameron paying the $500 fee, she reported them. The laws need to be clarified if ambiguous and enforced when appropriate. That these new laws begin to help the poor and middle income get access to and maintaining the limited number of affordable apartments is encouraging but the truth is there is not nearly enough affordable housing available based on average NYC salaries.
21
this kind of thing is a predictable result of controls. If you say that something worth $2 must be sold for $1 , expect shortages. Also expect buyers to be willing to pay up to $1 in a variety of efforts (sometimes corrupt) to find available product, often via side channel payments to the seller, or by gaming various rationing schemes, or by waiting in longer lines.
13
The rent "reform" changes are absurd and should be rescinded. Bad for tenants, landlords and the city. Just a populist sop to a narrow special interest (Manhattan high income, below market renters).
6
Good for you, Natalie!
The metrics of the rental market between Chicago and New York are definitely skewed, but one thing is for certain: There is not a major city in America where a background check cost just $20. Who thought up these silly rules? Should gouging be reined in? Yes. Is the rental process flawed? No. Rentals have always come with exorbitant costs, no matter where you live. New York and San Francisco are the highest. Chicago is getting there. But only New York seems to have this broker-owner relationship creating a dual layer of bureaucracy and costs. Commonsense tells me Albany lawmakers knew what they were doing by writing legislation the way they did and leaving specific brokerage language nebulous.
7
@Robert Salm: What is your basis for saying that 'rentals have always come with exorbitant costs'? I found my Manhattan apartment without a broker, and my rental cost me exactly ZERO dollars in fees - the landlord didn't charge me for whatever background check was run, and I moved in having paid 1 month's rent as a security deposit, and the first month's rent, period.
29
@Robert Salm The point of last month's rent and/or the deposit is you should not need to run a background check. Prepay phones don't run checks either.
9
@L
Good for you. If your landlord didn't pass on the charges for credit and/or background checks, great. But someone had to pay, either an association for some kind of a credit check subscription or the landlord as a one-off charge.
i'm not even sure what a "skin care entrepreneur" involves...seems like wordplay.
9
@ray that would be an entrepreneur in the industry of skincare. I own a skincare brand. And I am also currently a professional nanny. However, I'm a private person whose career has no bearing on this situation so I wanted to keep more specific details out. Hope that clears things up. Thanks!
36
@Natalie
I am somewhat confused. If you are a private person why did you have your photo featured and why did you put any info about your professional life since it doesn't matter?
And I understood what 'skin care entrepreneur' entailed... sounds like a like of wordplay to inflate one's self.
Thanks!
6
@ray because they wanted to include what I do. And that is what I do. I could have given my company name, but it has nothing to do with the story, and someone like you who is hyper-focused on my career but not interested in the actual issue might call it out as simply being for publicity. Being a private person and speaking out on an important issue are not mutually exclusive. And if you understood what skincare entrepreneur was, why ask?
13
I suggest that an attorney write an article on the new laws. I have read the law. It is confusing to real estate agents and to long time landlords. This article does not clarify the scope of the article unless I am missing something here. The law is statewide and not relegated to rent control units in NYC. New York State License Law prohibits real estate agents from giving "legal advice" aka "practicing law without a license. With all due respect to the New York Times, some of this article sounds a lot like "legal advice' to the readers who will rely on this as fact as is an attorney had advised them. Furthermore, real estate agents should not be put in this position either.
12
Reading this, I almost thought it sounded better than back in the 1960s -- when young women looking for an apartment were often expected to have sex with the landlord's broker in order to get an apartment. I went through multiple "appointments" to see an apartment that resulted in this kind of coercion before I told my boss, who went to the next broker appointment with me -- and threatened to expose the broker to the owner if he didn't stop it. I got that apartment, which was at least somewhat better than the previous one, where the landlord himself had "given" me some furniture already in the apartment -- that turned out not to be his, but the previous tenant's, a drug dealer, who robbed the apartment three weeks after I moved in. The real estate industry still calls most of the shots in New York -- and none of its members seem to be hurting much -- it's still tenants getting shafted, one way or another.
22
What could very accurately be given as a generic term the I Want More Money Fee will be the ultimate death of the American middle class. However, in this case, $500 isn't all that outrageous a sum to secure a reasonably priced apartment in a decent neighborhood--assuming the fee assures your actually getting the apartment. Then it's no more of a scam than the landlord charging a hefty "cleaning fee" after having white paint slapped over everything (including the doorknobs and often the windows).
If the broker fee doesn't get you the apartment, it's just one other example of contemporary taxation without representation (oh, yes, let's quibble about a fee not being a tax), the opposition to which had a lot to do with the foundation of this country.
7
It seems to me that the law is pretty clear, but the real estate industry is intentionally agitating confusion about the laws to decrease public support for them. Why does the RSA and REBNY keep saying there is confusion? What are they confused about other than the $20 fee cap that lawmakers have clearly stated is supposed to cover brokers?
26
This new package of laws is so ill conceived and badly written in a number of ways and I am glad the NYT is illustrating some of them. Here are a very few :
There are no limits on how much you can make, or how much wealth you can have, to get a rent stabilized apartment. Why is the government capping rents for the wealthy?
If you make a totally bogus complaint that your apartment or your building needs repairs, and then default on your obligations under your lease, the courts may see your landlord’s motion to have you evicted as retaliatory. So complain today.
Landlords might not allowed to deny leases for applicants with bad payment histories. Why should this be?
Landlords and coop board can only seek summary judgement against your base rent and base maintenance. So if you fail to pay for your utilities or a parking space, it may be impractical for your landlord to try to collect in court. Why should this be?
Due to the new law, you can now rest assured that your building cannot become a condominium. For those of us who think the goal is to help city residents to afford to buy their home, why should this be?
11
@Bill: How facile - and wrong! - of you to say that 'the government is capping rents for the wealthy'! Do you believe that only wealthy people live in rent-stabilized apartments? If so, you are wrong.
You also say: "For those of us who think the goal is to help city residents to afford to buy their home, why should this be?" Absolutely nothing supports your contention, nor is helping people buy a home the aim or intent of the law. Just because YOU think something is a goal doesn't mean the law supports it.
I'd say you don't understand the new laws very well.
14
The reason prospective tenants have to pay all these crazy fees is because of rent regulation.
When politicians start messing around with market forces and capping rent this is the inevitable result.
Now that rent regulation has recently been strengthened even more there will likely be more fees.
Rent regulation distorts the housing market. If we got rid of it NYC will no longer have perennial housing affordability issues - and it will no longer have hidden fees.
These tenants should complain to Assemblymember Linda Rosenthal who was mentioned in this article. She has been a leader in strengthening the disastrous rent regulation laws.
21
@Sherman: Are you kidding me? You are among the mis-informed who say "if we got rid of rent regulation NYC would no longer have perennial housing affordability issues." That is pure hogwash - take a look at Boston, which got rid of rent regulations and where apartment rents went UP across the board - removing rent regulations didn't help affordability, in fact it made ALL apartments there LESS affordable.
This crazy belief that rent regulation is the cause of all housing problems is completely unjustified. It's makes one group of renters a target for no real reason.
27
@L
Your claims about Boston are misleading.
For starters, Boston has had a huge economic boom over the past 15 years or so largely due to the growth of the hi tech industry. This has led to an influx of people which inevitably pushed up rent.
Second, I remember when Boston first deregulated rent. I read numerous articles by liberals and “tenants’ rights activists” predicting massive homelessness and dislocation.
This did not happen. Renters simply moved into smaller apartments or to neighborhoods that were more affordable.
Sorry to burst your bubble but there’s likely not a mainstream economist in the world who would say rent regulation is a solution to housing woes.
Sure, under a market system some tenants will see their rent increase but most will likely see decreases.
A market system is the fairest and most efficient way to allocate housing.
7
@Sherman: No, I'm not wrong about Boston, particularly since I know many people living there and what's happened to their rents over the years.
The "tech boom" is a red herring; Boston has always been top-heavy in tech with MIT as a huge presence there.
The TRUTH is that rents have gone up, not down. The deregulation in Boston has proved that a 'market system' is absolutely weighted in favor of landlords. Period.
8
If they are allowing the brokers to be their proxy, then the brokers are also law bound. When you are acting on behalf of someone, it is just that. The rules don't disappear. Brokers and the landlords should be fined for violations, as they are most likely taking money from the cookie jar.
13
It seems most of the high fees benefit the brokers and middlemen.
Most of us who don't live in the Big Apple have trouble understanding how the rental market evolved as it did in New York City. Finding and renting an apartment in NYC must usually be facilitated by a third party middleman, the broker, who usually charges an extortionate fee. In most places, landlords market and rent directly; if brokers are used, their fees are much lower than in New York.
Broker's fees benefit neither the landlord nor the tenant; they support the brokers. In an age of Internet marketing, are brokers really necessary, at least at the enormous costs their services typically cost? Do they thrive simply because of the longstanding business culture of NYC, or perhaps because of the complexity of NYC regulations and taxation?
I would think their time has past, and that more efficient market mechanisms will evolve in New York, similar to those elsewhere.
Whether the new hastily and poorly written law will help the situation, though, is another question entirely.
22
NYC is littered with the (figuratively) dead bodies of tenants and landlords who thought a broker was not necessary. They’re typically too smart for their own good, and know the cost of everything but the value of nothing. Tenants want the best apartment and landlords want the best tenants. Brokers provide that service. Just like any other service, it commands a fee. That fee is negotiated by two parties, not one. The market is the market and brokers just operate within it just like landlords and tenants do.
8
@Alex: Plenty of people in NYC live in apartments they rented without using a broker. It can be done!
16
@Andy Deckman: Oh, please! I moved into a very nice apartment without any broker being involved. The landlord is a fine person, and didn't need the 'services' of a broker to rent his well-kept apartments.
22
The problem with nearly every law passed with good intentions is that there are frequently unforeseen negative consequences. This is very evident in the case of tenant protection laws.
For example, there is no question that tenants needed protections from unfair evictions. But laws which provided such protections have resulted in all evictions being time consuming processes in which landlords see extended periods of occupancy without rent payment and often damage to apartments inflicted during the eviction process period. And the unintended consequence harmful to renters is that landlords set higher income and other requirements for willingness to rent to a prospective tenant, thus making many apartments unavailable to some who desired them and would pay the rent due.
Legislative regulation of landlord-tenant relationships are very often problematic. It is often the case that there are no good solutions, that the best that can be achieved is a less bad situation where unscrupulous landlords and tenants will still find ways to abuse the other.
15
Yet again, more rent regulations are passed, yet it is tenants themselves who get shafted. Wise up NYC. What is needed is to eliminate rent control / rent stabilization / rent regulations of all types. Nearly every other city in America lacks rent regulations, and most have much cheaper housing than NYC. Don't take my word at this -- it is been studied extensively how rent control = fewer apartments and higher rents.
For example, from the Cato institute: https://www.cato.org/publications/policy-analysis/how-rent-control-drives-out-affordable-housing
Or the liberal Brookings Institute:
https://www.brookings.edu/research/what-does-economic-evidence-tell-us-about-the-effects-of-rent-control/
18
@20002; You are ignoring what happened in Boston when they ended rent regulations there: rents soared across the board and have never come down. Maybe you should look into that.
14
I know for sure Compass the real estate broker, charges more than $20
11
The solution is simple - make all broker fess payable by the landlord. They are providing a service to the landlord, not the renters - so the landlords should pay for it. Just as head-hunters, or "employment agencies", are paid by the company that hires the worker, not the other way around.
Then again, this is the United States of America, and the ever expanding usury and abuse of those with less power has been the norm since 1980 and the advent of Ronald Reagan.
The sole use of real power today is the exploitation of those without it.
148
@Chicago Guy, but why shouldn't landlords or agents be allowed to charge fees for screening tenants and running background checks? Is it better that landlords raise your rent to make up the lost income? Is it better that you live next door to someone who hasn't been screened?
11
@Bill
A good point, but what, exactly IS the cost for "screening tenants and running background check"? We aren't talking about private investigators looking into your past, walking the street, interviewing people, preparing reports, etc. We are talking about an employee - already getting paid for their job whether they do one or twenty checks per day - taking a few minutes to do a computerized search of a few data bases, things like credit checks (which can take seconds), perhaps reviewing some paperwork or records submitted by the prospective tenant, etc. How any of that can actually cost $400 or some such figure, is indefensible - it's a purely arbitrary number set up to make money.
57
@Bill
Landlords are allowed to charge a screening fee! After doing a quick search on the internet of how much that service costs, I found several companies that will do that for less than the $20 fee that is currently allowed.
So your argument, and the scare tactic associated with it, has no real basis in fact. But, it does have a basis in defending the usury of people by charging them $500 or $700 for something that costs $20, simply because they can get away with it - for now.
45
“It has become a trap for the unwary,” said Mitchell Posilkin, general counsel at the Rent Stabilization Association, a group that represents 25,000 landlords. “Even the most sophisticated owners who we deal with are really perplexed about how they’re supposed to implement many of these provisions.”
"Sophisticated"? That means they're more adept at thievery.
Leave it to a lawyer and his sophistry.
22
@george eliot: Agree with you!!
The sentence “Even the most sophisticated owners who we deal with are really perplexed about how they’re supposed to implement many of these provisions.” is so self-serving as to be laughable!
Landlords are somehow never 'perplexed' about how to implement rent hikes or MCI charges, are they?
The translation of the original sentence is: "Whaaa! We're landlords and we're used to getting everything we want from Albany, and you have to give us our lollipops back!"
14
Here's a tip from someone who lived in your bananas-town for 26 years.
The best way to find a place is through word-of-mouth, not on line. Put the word out, keep your ears and eyes open.
People hear things and see things. People die and their apartments become available. I once found a 2-bedroom duplex in Park Slope for $1200 a month because I was painting someone else's apartment in the neighborhood and mentioned I was looking for a place. The guy who owned the duplex was dreading having to put the place on line and be deluged with prospective tenants, out of which he'd have to pick and hope they'd pay their rent on time, wouldn't damage the apartment and everything else a landlord has to deal with. Bada-bing, me and my girlfriend were in, just like that, no fees, just one month's deposit.
Also, don't be in a hurry. Just like buying a car, your rush is what crooked brokers look for, so they can charge you these ripoff fees.
Be smart, my little cucumbers!
49
Rent and fees (which is just rent by another name) are high because housing is scarce and demand is extremely high. Rules that prevent landlord and tenant from negotiating arm length agreements will have unintended consequences, creating winners (tenants of regulated units and landlords of unregulated units) and losers (tenants of unregulated units and landlords of regulated units). There are tens (hundreds?) of thousands of tenants and landlords seeking each other every month, free to negotiate whatever is in their best interest. Disruption occurs once the government picks winners (regulated t’s, unregulated ll’s) and losers (vice versa).
No such thing as a free lunch for anyone. Ask any economist.
10
These fees aren’t confined to New York. As a naive newcomer to Chicago I paid a $500 application fee to rent in a desirable building. The $ would be applied to my rent if I got in. I searched further, found a no fee apt and got my $500 back by writing a demand letter to the management company.
12
There's nothing ambiguous about unfettered greed.
32
Is it greed on the part of the landlord who wants to collect market rate rents or the tenant that’s looking for a sub-market deal - which is essentially what a stabilized apartment is.
Remember too that in many many cases those deals are subsidizing an otherwise unavailable lifestyle, like expensive opera tickets or a place at the beach plus a car to get there. They’re not proving affordable housing to noble hard working middle class people.
3
@GC; Remember that high rents are in many many cases subsidizing an otherwise unavailable lifestyle for the LANDLORD, like a house in the Hamptons and other expensive vacations, plus a car and garage fees!
BTW, I personally know several dozen 'noble' hard working middle class people who can only stay in NYC b/c of rent regulation - and not one of them has a second home or a car.
12
False equivalence - the landlord takes on substantial risk, the tenant none. No way their payoffs should be equivalent. The only reason they are is that there are more tenants than landlords - providing a rich life of votes to be mined for short term gain.
I invite all of you who feel that you are entitled to having your landlord subsidize your housing costs to buy a coop. It will open your eyes as to what it costs to maintain a property in nyc.
7
The Real Estate business is out of control, too many crooks taking advantage of tenants and buyers...just because they can. Lucrative but corrupt. So, what's new?
23
These fees are garbage and they need to be trimmed back. The regs are clear. Brokers are agents and not principals. They act on behalf of landlords, not themselves and the fee restrictions apply to them because they are acting for their principal, the landlord. Brokers licenses should be suspended on confirmation of a violation.
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REBNY caught by surprise? Give me a break. The best-organized, best-funded political lobbying group that has exerted constant control over politicians for decades caught by surprise? Unable to get politicians to do their bidding at the "last minute"? For once in a very long time, tenants were able to win some decent, worthwhile legislation in their favor.
Now, if the next governor could just avoid accepting REBNY PAC dollars and influencing so much of what they do, then, THAT would be real change.
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I'll chime in, once you sign the agreement, and hand over the $200 comment-reading fee.
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Government policy to help New Yorkers becomes mired in confusion and corruption, why am I not surprised?
I read this article right after learning that the City of New York is beginning to waive social security number and credit check requirements when applying for affordable housing, in order that illegal aliens might have a shot at those coveted apartments.
The message is clear to native born and legal citizen New Yorkers, there's no room for you because corrupt politicians have a better cause de jure.
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@Barbara You're so right, Barbara. We'd all be better off if undocumented immigrants were all homeless.
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Rising rents and brokers fees need to be addressed. I’m happy for a cap on the application fee of $20, if it’s properly enforced. But astoundingly, renters have to pay more than a months rent to brokers to secure an apartment— non-refundable. That is a lot of money to come up with, especially when renters often need to move again in a year or two because the rent is raised too high for them to afford (then put back on the market for less). The broker-free apartments are hard to come by, and often more expensive or poorly maintained (or both). Renters, especially low and middle income renters, are poorly protected in this city.
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@Lleone, "renters have to pay more than a months rent to brokers to secure an apartment" $400 to #700 is more than a month's rent? When in NYC do you live?
"renters often need to move again in a year or two because the rent is raised too high for them to afford (then put back on the market for less)"??? You think landlords would rather lose a tenant and let their apartment sit vacant for a few months (getting no rent) just to find a new tenant who might give them all sorts of problems?
$700 application fee might be a bit high but $20 is definitely too low. Doesn't even cover the cost of a credit check.
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@Bill have you rented an apartment in NYC? A broker's fee is typically 15% of the entire years' rent; so a studio apartment renting at $2,100 per month generates a broker's fee of $3,780, this far surpasses a months' rent. Application fees and processing fees, whether $20 or $700 are on top of the broker's fee. And yes unfortunately tenants often leave apartments because they cannot afford rent increases and the landlord will not negotiate. Rents are not decreasing and it is not a renters' market. If you think landlords would rather keep a tenant than increase it a lot and let their property sit empty, take a walk around Manhattan and look at all the empty storefronts.
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The law isn’t poorly written, nor are real estate agents “perplexed.” The rental housing industry in New York is set up to gouge tenants as much as possible and to permit legislators to enact these kinds of vague laws, which are little more than window dressing. It has always been this way, and always will.
The real estate industry is all-powerful in New York. Just as tenants in the city are exploited in order to get the apartment they desire, so are HOA residents in the suburbs totally unprotected against bad or corrupt boards of directors.
Other states and locales offer much stronger protections to renters and homeowners. This is no accident. In our state, money funneled to the right politicians produces real results.
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@LIChef
Notice how every time rent regulations are strengthened, it is tenants themselves who get a raw deal? What is needed is not more regulations. Rather, the rent regulations/rent control/rent stabilization themselves are what needs to be eliminated. Look at any city where housing is affordable - you'll find it doesn't have rent control.
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@20002: Wow, you are so wrong! Look at Boston, which got rid of rent regulations and now has an apartment rental market that is unaffordable across the board.
14
Another factor to consider is the application fees foster can foster criminality. My real world example:
Around 2012 someone in my Brooklyn apartment was showing a unit and charging a $200 application fee and required cash or a cashiers check to be handed over on site. In the competitive market in NY, renters arrive ready to make an offer on the spot so it wasn’t that unusual. The apartment was only being shown for one weekend, and there was a steady stream of people checking it out. I came to find out later from the landlord that someone had found out a unit was vacant and posted an ad on Craigslist to show it. This person had no affiliation with the apartment, but collected numerous $200 application fees throughout the day. As prospective tenants were told the fee was non refundable and no guarantee of getting the apartment, I’m sure no one followed up when their check was cashed and they weren’t called back. Capping the processing fee at a low amount and strictly enforcing it could eliminate this, but renters have to know their rights as well lest they be taken advantage of.
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@Mash, yes a crooked scheme, and definitely illegal, and I hope the got caught, but not really relevant to the new rent laws.
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@Mash
Capitalism and human nature at their best.
2
New York needs to ban broker fees paid by the renter, which is nothing but a predatory racket in the day of online listings.
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As a real estate agent, I can tell you that the changes are not all that confusing. Sure, some clarification on certain points is needed, but the big picture is this: What we do as agents is provide a service to the landlord, and as such, it’s proposterous that tenants have to pay anything other than credit check fees and a security deposit when accepted. The state requires us to give every applicant a form, explicitly saying that we work in the service and in the interests of the landlord. Why then do tenants have to pay anything at all for a service we are not providing to them? We do not provide tenants with apartments- we provide marketing, screening, and processing services to landlords. All these fees are like asking a fare-paying taxi customer also to pay the gas station for the cab’s gas.
As for all the REBNY belly-aching over how poor all we agents are going to become over these laws - more nonsense. Maybe stop flooding the industry with poorly trained newly licensed agents, most of whom don’t make it a year, but dilute the pool of clients for existing agents (oh but that might also dilute the pool of dues REBNY gets to collect )
Renters- don’t hate us. A lot of us are on your side!
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Sure, I may be complicit in gouging you but I'm your friend!
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@Don
In regards to even providing marketing services to landlords, this is not always the case.
As I mentioned in another comment, when I moved out early, a broker offered to show my apartment. I said sure. After this, every Craigslist ad I would place for my apartment would be flagged instantly and removed. So this allowed the broker to be the only avenue for people to discover the apartment, insuring he'd get a fee.
Their "marketing" was predatory. These brokers weren't new or naive or poorly trained. They knew what they were doing: exploiting my listing, myself, and the renter.
What value in the end did they add?
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@Don Most landlords wouldnt use an outside broker if they had to pay the fee as you will see when the law is amended to squeeze out what you can directly charge tenants.
3
When lawmakers are owned by the real estate industry why would anyone expect anything different?
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Poorly written laws have the outcomes they merit.
As a landlord, I used additional months of security deposits as a tool to rent to to tenants I would have otherwise rejected outright due to poor or non-existent credit ratings and/or poor financials. No more. I will now only rent to stellar applicants even if it means my pool of potential renters is somewhat smaller (but all lower risk to me). How exactly has this helped anyone (except possibly well-off tenants who, being highly desirable, can command better rents)?
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This is hard to believe. A landlord who goes out of his/her way to help prospective tenants with bad financials. Does anyone else find this preposterous?
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so you'll accept vacancies for months on end to avoid tenants you see as a credit risk at rent of $x, when even a single month's vacancy costs you more than reducing rent by $200 and widening the pool of credit safe tenants?
sounds like you're not a very good businessman. are you my landlord by any chance?
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@Mike, I don't find anything preposterous about a landlord protecting themselves against a risky tenant.
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Somehow it doesn’t surprise me that brokers are finding a way around the new regulations. The 15% broker fee is how a lot of real estate agents make money between sales. It galls, though: 10 minutes to show and apartment and bingo. Windfall.
Regarding subletting coops, I believe the writer is largely incorrect. While there typically IS a processing fee for subletters, that—typically—is a fee charged by the management company, which does NOT come to the building. And while most buildings do charge a sublet fee, this is typically levied against the shareholder who wishes to sublease his or her apartment.
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@Minmin, Under the new law coop boards find themselves in the same position as landlords with regards to prospective purchasers (because, unlike condo owners, coop owners are tenants living in their apartments under a proprietary lease), while condo boards are exempt from the new laws. Treating coop boards the same as landlords makes no sense. But this is how badly the law was written.
6