Do You Rent in New York? You May Soon Catch a Break

When I moved to Greenpoint in 1991, it was still a very Polish and a very locally-oriented community. In the ten years I lived there, I got both of my apartments through advertisements at the back of the Greenpoint Gazette -- you went on a Sunday when the apartment was being shown, you talked to the landlord, and she either approved of you or not. Done. By the mid-1990s, the neighborhood was swarmed over by real estate agents looking to gentrify, and one could no longer get an apartment *without* going through an agent, and this is where the brokers enter the picture. The neighborhood apartment market is routinized overnight: the agents forcibly insert themselves between the apartment seekers and the landlord, while standardizing the market rates for, say, every one bedroom in Greenpoint -- there are no more "deals" to be negotiated between landlord and renter. And that is all on the brokers: they are simply there to create, then lock in, an income for themselves. Most of them aren't from and don't care about the community; they offer little value added to the transaction and none at all for the renter, yet they utterly and *irrevocably* transform a local community into a Manhattan-like business matrix. The neighborhood will never be the same once the brokers infest it. It’s a scam on NYC renters, and I have lived in no other cities here and in Europe that (legally) tolerate the scam.

This is very sensible. The broker for rentals is beholden to the owner not to the renter. They should pay the fee. The broker has no reason to be honest or especially fair with the renter as sites like street easy makes brokers interchangeable from the perspective of the renter so there is little incentive for them to be fair. The owner on the hand often uses the same broker repeatedly. They should be the ones paying. Yes this will push up the nominal rental fee but not by as much as the brokerage fee does

“Someone has to take the photos, write the listing description and arrange the open house" Sure, brokers provide some services. The question is, do these low-level services warrant thousands of dollars in fees that are extorted from tenants? It's called greed.

Interesting that the author's argument is premised on data from Germany when NYC's own data shows an immediate rent increase. But let's put the details of faulty analytics to the side and come up for the big picture. Does anyone seriously believe that further increasing the NYC government's vise-like, non-market hold over the apartment market will actually help tenants? Of course it won't. Want more affordable housing? Gut the city's thousands of pages of zoning limits and restrictions. Fire the thousands of zoning inspectors and other land use overseers. Let the private economy have a chance to re-enter NYC's housing market without a straight jacket. If there's demand for more affordable housing, the market will provide it. Maybe not perfectly; maybe not without flaws; but many quantum leaps better than the city has done.

Do real estate brokers add value? If so, they should be paid for doing that, should they not? Do they add value for tenants? I sat as a housing court judge in NYC for 20 years. I saw many more than one case in which a litigant sued to gain possession of an apartment for which he/she had paid a month's rent and a month's security, but at trial it turned out that the person that the litigant paid was not the landlord or an agent of the landlord; instead the person paid had no connection to the apartment but had posted an ad online offering the apartment for rent. Brokers protect prospective tenants from such scams.

NYC has rent control so landlords can't raise rents to pay broker fees. NYC wants to make life bad for property owners and the result will be that landlords will stop investing in their properties. 20 years from now people will wonder what happened to the housing stock.

I have used brokers as a renter and as a landlord. Each time, my brokers were incredibly helpful. As a renter, I had an incredibly tight budget and two dogs, which made renting an apartment very tough. My broker schlepped me around from apartment to apartment (over 20 apartments) until he showed me one that worked, rent-wise, location-wise, and dog-wise. And now, as a landlord of a three-family building and as someone with a full time job, I have found my broker incredibly helpful in marketing my apartments and screening tenants to make sure the tenants and my family are the best match, something that is important in a small building where we all have to get along. Why don't tenants and landlords split the fee?

This article is filled with wrong information. 1. Of course, thousands of brokers will lose their jobs. Use your common sense. Brokers are not going to get paid by landlords anymore, like they have been for decades and decades in NYC. That's like your boss not paying you anymore and telling you to collect your salary from their customers. Good luck. 2. Yes - rents will go up. Look carefully, and you'll see on the graph that rents rose more for apartments that stopped charging fees. The author tells you something different. And this is NYC. 3. Security Deposits. If landlords are limited to collecting only one month security deposit, then many people with bad credit, insufficient financial documentation, or pets that can secure an apartment by paying extra security, will not be considered. That hurts renters. I can go on and on. The point is that when the government steps in - even with good intentions - their regulations hurt the very people they're designed to protect, and small businesses, too. But let's not be naive. This is about politics. Give people stuff for free and they'll vote for you. The Pols never get blamed for the infrastructure they cause to crumble.

This is a simple supply and demand issue. No matter what regulations the government forces, nothing is going to change the simple economics of the situation: if you want to live in New York, you'll have to pay. What's the real solution? If the city's rents are too high for you, move somewhere else where they're not. New York has ample options for commuting: the Metro North, LIRR, NJ Transit, etc. Nobody says you need to live in the boroughs.

Of course rents won't go up if broker's fees are eliminated, we know this. Naturally landlords will hire brokers to rent their apartments and pay them once the apartment is rented, just like companies pay headhunters for jobs. Salaries don't go down because a headhunter is paid by the company who hires them, it's entirely the same thing. WE KNOW THIS and it's not complicated either. Any arguments to the contrary are simply blowing smoke to confuse and distort the truth. Time to move on....

Comparing Manhattan to any other city worldwide is "False equivalence" reading this is a waste of time.

Sadly, facts in the NYC market show this is not true. Rents spiked after the DoS memo to prevent tenants from paying the landlords' agent fee. https://patch.com/new-york/new-york-city/rents-jumped-after-ny-announced-surprise-broker-fee-ban-study

We found an apartment online, asked to view it, and were told if we want it, we must go through and pay the landlords exclusive broker 15% of one years rent.

We don't have broker's fees in San Francisco. It is illegal for them to ask. I have never once believed that it has any bearing on rent cost, one way or the other.

I applaud the new rule. There is something fundamently wrong with being charged a fee when you are not the client who hired the service provider.

Brokers take a few pictures, make a listing and show the property. Big deal. And the ones who sell houses are even worse, earning 10's of thousands of dollars for a day or two of actual work. The sooner this nationwide industry of parasites is exterminated the better off the rest of us will be. Are you listening Bernie?

Until the state stops allowing deadbeat tenants to remain in homes for 11 or 12 months--or more-- as eviction crawls its way through the system, I, as a property owner, will not pay a broker's fee. I am looking for other ways to charge tenants the true cost of living here. Because right now, I take in less than $100 a month than my mortgage. One big repair eats that. If someone doesn't pay rent for a couple of months, I could lose my house. I just raised the rent. In less than 48 hours, I had 54 requests for info; 18 people booked appointments visits. I rented it on the 3rd visit. The market is on my side but the lunatic city progressives are not. And doesn't the NYT have a single person who rents out property or are they all willing to pay excessive rents to scummy landlords so they can live in itty-bitty spaces in Brooklyn? And then complain about it. Just once, can you write about this law through the lens of landlord-tenant issues outside of the city? The sameness of your op-eds sounds more like NYT policy. I was horrified at having to pay essentially three months rent when I first came to Long Island as a renter. Then, after buying, I discovered how difficult it would be to have a problematic tenant removed and I began hearing absolute nightmare stories about deadbeats who had stiffed owners for months at a time. By the way, I have never evicted someone. But NYC isn't going to dictate to me how I survive LI's high costs. Stop applying NYC 'solutions' to NYS.

There is no way 44 percent of apartments are rent regulated in NY. And if it is anywhere near that number they are lived in and no one is leaving them.

The Left is quick to "protect" the little guy against fees. Brokers provide a valuable service finding housing that the client wants quickly and efficiently. Take away the broker and you will have tenants wandering from building to building and web site to web site. How much is the tenants' time and effort worth? Of course, that is not going to get headlines.

A broker let me move into a rent-stabilized shoe-box for an additional $2500 under the table about 15 years ago -- I wonder how common that practice is now, and whether there's a way to curtail it...

Even if rents increased to pay for the fees, the payments would be spread over time, rather than renters needing to have thousands in ready cash available just to have a place to live.

I think this opinion buried the lede on this matter, "Lower move-in costs also make it easier for unhappy tenants — rich and poor — to leave an apartment" This is the real raison d'etre of the new law. In this case, who pays the service provider and when they get paid, makes a difference, even if rents need to go up to cover the cost. Having the landlord pay upfront reduces the transactional friction that kept unhappy renters in untenable situations. The law puts economic incentives for landlords to decrease turnover rates and maintain their buildings to keep tenants happy. Brokers are incentivized to provide standout service for the party who actually hired them. It does not stop a renter, who's looking for a place from hiring a renter's broker to do a search, and paying them for their skill, time and service. The law eliminates the awful rent-seeking key holders that were pretty close to being mobbed up. "You wanna look at the apartment, you gotta agree to wet my beak." Good riddance. If you're a broker that provides a legitimate service that adds value, then keeping the landlords as customers should be straightforward, if competitive. You would get paid by the landlord who hired you, and you should get paid at least partially by the hour. Wouldn't it be nice to have some certainty about at least a portion your paycheck?

Brokers' fees are a scam. They should be banned. I wish states would regulate (ie cap) the outrageous fees agents charge for selling houses - they too are scam that cannot be justified.

In many neighborhoods, the increase in the average rent is due to the machinations of brokers even more than the landlord's greed, dramatically accelerating a process which might have taken years longer. Convincing owners that it's an arms race and they're losing out is meant to pad the brokers pockets more than anyone elses. These people went into the broker business as a default, because they were not fit for any other other employment. Nobody is shedding any tears for these parasites.

Rents will rise more than the actual landlord expenses because the imposition of broker's fees is a synchronized public event. Whatever impact that the broker's fees might have will be overwhelmed by opportunistic rent hikes. New York landlords are well versed in the process. If the rent goes up for everyone, what are you going to do?

Quit touting the nonsense lie that 44% of apartments are rent regulated. Landlords keep finding ways to do what they want with those apartments. I've lived in 2 rent stabilized apartments, and would have happily stayed in either one for years. But my landlords pushed me out. First, using the preferential rent scam, they were able to raise my rent $400/mo in 4 years and I could no longer afford it. The tenant before me, btw, paid only $800/month -- but the landlord was able to claim Individual Apartment Improvements without having to prove to anyone that they actually spent money, and that allowed them to jack up the legal stabilized rent to $1700 when I moved in. Most recently, I signed for a stabilized apartment and then, upon lease renewal, the landlord told me they made a mistake and the apartment wasn't, in fact, stabilized. They never officially deregulated, but they haven't reported rents to DHCR in 10 years, and the long and short of it is, DHCR tells me that the only way to resolve the situation is if I sue. Yet both apartments, I'm sure, count towards the city's figures of "regulated apartments." Dig deeper, and I'm sure the portion of tenants protected by regulations is much, much lower.

Why all this worry for the income of brokers? Did we make this fuss when manufacturing jobs left the country? Or when wages stagnated for 40 years? Some of us apparently want socialism for some jobs, but not for others, rather like the arguments you hear for private health insurance. American healthcare simply must remain in the hands of corporate America, and continue banking working people, otherwise some other people lose their jobs. Including CEOs with 8 figure compensation.