The protection renters thought they had was an illusion because no law concerning broker fees was passed. It was put in place by Cuomo operating by fiat and the courts correctly struck it down. This is what we can expect when Cuomo, like Trump, bypasses the legislative process and tries to enact laws through iron-fisted executive action. Trump and Cuomo: two peas in a pod. Thanks for nothing, guys.
https://emcphd.wordpress.com
6
Razor thin profit margins lol not a chance.
14
A statement that appears to come up often in these discussions is "So why should I have to pay the fee? You don't have to do it in most other cities." It is true that New York is one of the few cities in which this particular cost is passed to the tenant. However, there is really no other city whose market is comparable. In a market where the highest vacancy rates have not been more than 4% in many decades, a landlord can pass any number of costs to tenants. The low supply does indeed give them that flexibility. Yet, just because the upfront cost is passed to the tenant does not mean that the overall cost is any higher than if the cost had NOT been passed. The reason that many landlords make the choice to have lower rents and pass the fee onto the tenant is simple. They know that when the tenant pays the fee, they will probably stay longer in in the building. Furthermore, the ability to come up with the additional up front costs is a better sign of the tenant's solvency and cooperation than if they had only come up with rent and security. In other words, established landlords who do not need to charge the highest rents possible, would rather have a tenant who pays less rent but has more "skin in the game." If New York were city in which one would easily remove problematic tenants, such concerns might be unwarranted and so might such pass-through costs. Yet, they are not. The regulatory environment has seen to that for many decades now.
6
You always are gonna get the perverters coming in no matter what law is passed whether it is pro landlord or pro tenant.
These people who do illegal things should be heavily fined and booted out of the industry.
Likewise if tenants start to pervert the law like with rent regulation that almost destroyed NYC in the last 1900's something should have been done about that too.
4
Looks like REBNY (Real Estate Board of New York) put out an email soliciting comments on this piece as the remarks here are miles away from what represents majority opinion.
To the state legislature: the people are with you and we appreciate your help in bringing the avarice of the NYC real estate syndicate to heel.
24
I don't understand why this is a big issue. If someone chooses to live in NYC, they are choosing to play this game of fees with brokers and landlords. Don't want to play the game? Go live somewhere else. NYC is not the only city in the U.S. I don't see why people living there have a right to complain.
11
If a person finds an apt himself, what in the world entitles a broker to any fee whatsoever? Seems that the deal is between the potential renter and the landlord. If the landlord hires a broker to assist, the landlord should pay, clearly.
32
As a broker who represents many landlords, I am struck by some of the fallacies in this article. I have no sympathy with any broker who does not disclose the fee structure on an apartment immediately on first substantive contact with the tenant. However, the question of simple economics doesn’t seem to come into this discussion very much. There are many landlords in New York who already do pay the broker fee if they feel it is in their economic interest to do so. This is usually because they have to keep their rent as high as possible for reasons of financing and further development. Therefore, those landlords WILL pay the broker fee and work the fee into the rent. As such, their rents will be between 10 and 20 percent higher than landlords who don’t pay the fee. Other landlords ask that the tenant pay the fee but keep the rent much lower to account for that extra payment. It is up to every individual tenant to decide which of those two scenarios works best for them. If you’re only going to be in an apartment for one year, you’re probably better off with the landlord paying the fee. If you’re going to live in the apt. several years, you’re better off paying the fee yourself as one lump sum payment. Furthermore, there is There is no state, including NY In which the laws of commerce have ever required that “compensation must dictate agency.” To require that would be to place unreasonable and perhaps unconstitutional limits on free enterprise. People already have a choice.
6
New York is merely a cultural luxury. As such, it is optional, and landlords are within their rights to extract whatever they can from people who fancy living there. Those who can't afford it should get jobs in the rest of the country.
6
@Inveterate if the landlords and brokers in Bedford Texas started ignoring the laws, would you say the same thing?
12
@Inveterate This comment is idiotic. Millions of people live here and they aren't all living in luxury. To tell people who are born/raised here or have made their careers here that they should just move if they don't want to pay a brokers fee that doesn't exist ANYWHERE else is ignorant. I don't want to pay brokers fees but I really doubt I could find jobs in my area of expertise anywhere but an expensive city. Then what?
29
It is dehumanizing to live in NY and be a so-called "New Yorker."
5
No One, no one forces anyone to become a landlord, or to buy real estate they intend to rent. It’s all about greed over the need for shelter.
22
@Richard no one is forcing anyone to rent an apt either. Buy a place if you hate landlords so much.
8
I think the law is another giveaway by the state. The few times I used a broker, I was happy to pay the fee. They provided a service I really wanted and I was happy each time. We are living in strange times. Free stuff for everybody! If I knew that the government was going to create all these new laws I would have never have worked so hard to buy an apartment, payoff my student loans, or started my own business. I would have just done the bare minimum and I would have been in a better place; cheap rental housing, sky high minimum wage, and the best part, I have company feeling sorry for myself. What is happening to the USA?????
6
@JH
In every other city the landlord pays the broker. Everything works out just fine. No one is demanding anything for free.
22
Which real estate firm do you work for?
15
@JH Exactly, that's what I had in USSR 30 years ago - LOL. Millennials hoping to keep their high salaries for jobs a simple robot can do paid by Capitalists and at the same time enjoy the freebies of Socialism, LOL.
How about everyone has the same $5 per hour so it can cover your food, a pair of shoes and a couple of undies?
And no inheritance from mommies and daddies, money to all, and the total control of the Government elite. I would like to see them having fun on those 50 cents they will eventually save.
4
It's NYC, The Big Apple! If you can make it here you can make it anywhere! We live on an island. Housing is expensive because of supply and demand.
Not everyone can afford to live here.
I am a broker and proud of the service we offer. We get affordable apartments for our clients at reasonable fees.
Our clients are the new tenants moving into the apartments you are complaining about paying fees for!
We signed a lease last night with one of or clients for a HUGE 1 Bedroom apartment in Washington Heights for $1,675.
There was no application fee.
We charged a half month broker fee.
While you are arguing about why this is so unfair we will be renting another apartment to someone else
I think the current sytem is working just fine!
5
@Jerry
The current system gouged renters, often up to 20% of a year’s rent! While supply and demand might affect the price of an apartment, why should it dictate your service price?
18
@EmmettC I am a broker for many years, the highest fee I charged for the past 7 years is 12% of the annual rent.
I just rented a great 2 bedrooms under 3K in East Village - I had literally 150 inquiries for this apartment in 4 days. Out of those 150 only 15 saw it, only 3 applied, 2 were arguing the fee and the third one got the apartment meanwhile without arguments. Got approved within hours of applying and signed the lease in 48 hours.
I heard about a couple of firms charging 20%- 18% but I don't know any person who would pay that when they can get a better deal.
It's a competitive market. And no one holding a gun to your head forcing you to pay.
You should want that apartment dearly to pay 20% of the annual rent or simply don't care about the money.
4
I thought the NY real estate market was soft due to excess inventory for sales / rentals? But the article mentions “multiple bids?”
@Gordon The only softness is at the ultra high end. The rest of the world is still clamoring for scraps at the lower end.
6
I find all of this fascinating. I have rented mostly in Chicago and once in Davenport over the last 40 years. In this area, property managers for larger places, landlords for smaller, handle the process. There may be brokers hired by some, but that is not the norm. Sure, small application fee and, in recent years, pay for background check, security deposit (which is often smaller than one month's rent), 1st month's rent, pet fee if one has a cat or dog, but that's it.
What a racket!
10
Calling themselves brokers doesn’t change the fact that they function exactly the way an agent does for an actor: the agent finds the actor work, the broker finds landlords tenants. The agent receives a commission as a percentage of the actor’s compensation, NOT from the producer employing the actor.
Since it is the landlord who receives income from the renter, the broker is working for HIM, and his fee is a percentage of the landlord’s compensation; by sheer definition and mathematics, it is impossible for broker to receive a percentage of what is zero income, since the tenant is the one paying out the landlord’s compensation.
One can only hope that some version of this analogy lands on the desk of every member of the State Legislature, since many of them seem unable to fully grasp the concept.
10
@A.L. Hern
The broker works on behalf of the landlord and represents the landlord in the transaction, whether the renter realizes it or not
12
There must be a simple way for anyone to record conversations, submit illegal requests to the police and for the law to place heavy fines and suspend licences of anyone caught BREKING LAWS. I suggest all lawbreakers be listed publicly on the web as well since they have no shame.
11
How to get people to abide by the new law (which is actually just the common practice across the rest of the country)? Remember folk routinely used to jump turnstiles on the subway - until the city started putting them in jail.
11
The new laws are idiotic. The article is written in a sensational way.
2
@The Truth Sounds like you're a NYC broker. I've lived in NYC over 10 years and the number of brokers at small and large real estate companies (Bond NYC --the worst offender) that flat out lie, post fake listings w/ bait & switch tactics, and act as if they are doing you a favor by unlocking a few doors for a few thousand dollars is ridiculous. It happens to so many people in this city that I'm shocked stricter legislation hasn't been in place already. I guarantee you no one will miss a few hundred brokers who need to find another job in NYC.
45
@RB Yes and now, StreetEasy facilitates for companies like Bond to put their name on other people's listings, so this is basically becoming a legal bait & switch. Have fun!
2
I can't wait for the day when some of these brokers start getting sued for breach of any duty to their tenant-client now that they're making tenants sign agreements that they hired the broker.
28
It is not illegal to have clients sign registration and disclosure forms. That is actually the law. Most agents don't do it because prospective clients don't want to sign them.
But it is mandated by NYS for clients to fill out a registration form and the Dept. of State also requires that clients sign disclosure forms. Disclosure forms let you know that either the agent works for the landlord, or for the tenant. This is an important distinction.
Another important distinction-- the non payment of broker fees to the landlord's agent is the Dept. of State's interpretation of the law. It is not written in the legislation that way. So when this new language came out, it was immediately contested. So technically it is not the law. A judge will rule on this. And until that's decided in court, it is not law.
And as an aside, the law will be very confusing for people. Who will know if the real estate agent is actually the landlord's agent or not? Just because you advertise an apartment, that does not mean you work for the landlord. In the vast majority of cases, most real estate agents work for the tenant.
If the tenant does not want to pay a fee, they may look for the apartment on their own. But they shouldn't complain about paying a fee when the agent has found the apartment, taken photos, paid for advertising, vetted applicants, granted access and put an application together and in many cases drawn up the lease and delivered the payments to the landlord.
4
@Sherry how is that working for the tenant? That's working for the owner and the owner should pay for that service if he wants to use it. That has nothing to do with the prospective tenant.
39
@tile Studies have shown that 9 in 10 people that work with an agent don't rent the apartment they contacted the agent on, so most of the time the advertising and photography isn't providing a benefit to the landlord who's apartment is being advertised.
The handful of websites that require "exclusivity" have distorted the picture of what is actually available on the market. If you don't believe me, do a search for apartments in Manhattan on a few websites and compare the numbers - as of 11 pm on 3/4, the most popular one of those "exclusive" sites has 6,672 apartments from brokers and owners. The New York Times, which does not required exclusivity, has 8,913, almost all of which are from the top 20 or so large brokerages. A third site, which is mostly open listings where the agent does not represent the landlord, has 27,212 listings.
Finding the apartment is clearly for the tenant's benefit as is putting together the tenant's application to portray them in the best possible light. Gaining access and drawing up a lease benefits both parties.
3
@B if the prospective tenant wishes to hire an agent/broker then that's perfectly fine. If the agent or broker is being forced upon the prospective renters in order to be considered for a unit, sorry man. That's dumb
11
If you don't want to pay a broker's fee don't use a broker. Do the legwork yourself.
While you're at it, how about objecting to paying for coffee, clothing, cable, electricity, transportation and all the other services which you use.
5
@MIKEinNYC Unfortunately that is not as simple as you state. Twice before I had to pay a broker fee on an apartment that we found without any assistance from a broker or through a broker listing simply because the landlord had an exclusive deal with the broker. As this article also demonstrates. forcing individuals to sign agreements or applications which contain language hiring a broker is disingelnious at best.
52
@MIKEinNYC I would object the next time I get coffee if there was a guy standing at the register next to the coffee shop worker and I was forced to order thru him. He would then tell the worker my order. The worker would hand him my coffee and then he would hand it to me and charge me a fee for this "service". How about you?
49
Why should broker not be allowed to charge for the services they perform? Should they work for free?
5
@MIKEinNYC A fair point except the fee used to apply even in instances where brokers did little or nothing to assist with the search or charge exorbitant sums while allocating them entirely to the party often least able to afford them, the renters.
18
A broker should not work for free but should work (and be paid) by the person “hiring” them and who they are doing the work for - the landlord. If a prospective tenant reaches out to a broker and requests assistance in landing a home then yes, that prospective tenant should pay their fee. If that’s not the case, the broker is working for the landlord and should be paid by the landlord.
26
@MIKEinNYC no...they should be paid by the party that hired them...the owner...not his tenants that did not need them.
15
Everyday, I am thankful that I own my home and am not prey to these endless vultures that inhabit the US in every industry and service.
24
This whole problem is very easily overcome. If someone is trying to strongarm you into illegally signing something or breaking the law, take a picture of the document and of the broker and say that if you don't get the apartment, you'll report them. Best to have a ice pick ready.
15
Did you get the apartment you wanted then pay the fee and enjoy
1
Welcome to Trump’s America! NY Real estate was, is and seemingly always will be corrupt and lawless. They should rename themselves “Money Laundering Inc.” Why do you think that it was the only business Trump could thrive in? 9 million dollar all cash offerings, 30 million dollar apartments that sit empty all bought by LLCs and the infamous “foreign investors” ie Russian and Asian oligarchs.
Now they are going to defy the law just like their poster boy!
17
Name and shame. Use social media, use online review tools, name the landlords working with these scam artists.
30
brokers in ny in real estate are amongst the greediest most unethical professions in the world. absolute money hogs acting in 100% full time self-interest.
26
Time for nyc residents to stop paying these ridiculous broker fees!
16
What a tragedy--the couple looks like they are cornered, have no options, and nobody to fall back upon...
...aw...so the newest wave(s) of privileged, white gentrifiers are facing economic "hurdles" to attaining the urban comfort, consumption, and leisure to which they KNOW they are entitled?
What's this world coming to?
7
Yikes, this whole industry is full of shady leeches. Wake up, New York! This does not have to be this hard!
10
There oughta be a law... oh, wait! There is!
9
Get a lawyer and sue..
In Berkeley it’s typical that you need a Lawyer sometime during your rental ..
Suing your landlord is a sport here in California..
4
Oh god what a mess. Thankful that I am not looking for an apartment in NYC.
2
I have a landlord who is the king of deceit. I was laid up after knee surgery and finally decided to read the rider that comes with the lease( I was in for a big shock ! how many of the rent laws and regulations my landlord was not following .
Best advice , read your rider that comes with the lease and go on line and read the new rent laws.
The better versed you are in laws pertaining to rentals(rent control and rent stabilized apts. have their own laws) You will know if your landlord is being above board. If not , don't be afraid to bring it to the landlords attention.
Fight for your rights... the landlords are betting on your ignorance, It will be a shock to them how much you know about rent laws .
My landlords knows not to pull any dirty tricks with me, now that I am an expert on N.Y. Rent laws!!!!
6
How could capitalism work without a middleman?
4
This is interesting. A mention that Progressive Democrats in New York got this passed and into law... local progressives are cheered by the NY Times and others, but Sanders a progressive is jeered, probably even by some of the New Yorkers benefiting from "progressive, Democratic socialist laws!! I was going to say i can't believe the hypocrisy going on here but i really do believe it is happening. Those Warren supporters now turning to Biden and saying Sanders can't get his policies passed, well they did it in New York State!!! A vote for Biden would mean the status corporate quo.
2
This is a good first step toward getting rid of this purposeless convention that has made the NYC area even more onerous to afford for the non-super rich.
Now the state needs to just threaten major fees and possible criminal charges for flouting the laws.
I shed not a single tear for these bloodsucking monopolistic brokers - good riddance.
10
there is a thing in ny when renting an apartment known as key money, under the table, greasing the wheels, quid pro quo
if ya know what i mean.. hey what apartment does the super live in maybe he knows of an empty apartment oh by the way
here's a little something for helping me out.. just the truth from a 68 year old life long new yorker
5
Is there some reason why The New York Times continues to inaccurately report on this subject? First, "rents cannot increase more than $50 without at least one month’s notice," is factually wrong and requires a correction. Notice of between 30 and 90 days is required if the landlord seeks to raise the rent 5% or more, not $50.
Second, "...The laws also barred tenants from having to pay a broker fee on rentals," is also factually incorrect. This was clearly labeled as GUIDANCE, on a law, not a law (and where is your cite as to who says this is a law?). Additionally, the guidance stated it only applied in cases where the landlord hired the broker. In many of the quoted situations, the agent clearly did not represent the landlord; therefore they represented the tenant, since an agent must, by law, represent someone and the default is the tenant. Please see your prior reporting on this, "A New Broker Disclosure Law in New York" of December 30, 2010 by Vivian S. Toy.
8
If what you are stating is true, that a broker “has to represent someone and in most cases by default that’s the tenant” then that needs to be changed. It’s outrageous to charge someone many thousands of dollars whom you didn’t nothing for other than opening a door. No question that work is being done but it is being done on behalf of the landlord - not the tenant. The default should clearly shift to the landlord.
6
@Andrew Wagner "represent" means fiduciary responsibility - obedience, loyalty, disclosure, confidentiality, accounting and reasonable care. Agents do not earn a fee for "opening a door" and in most cases they are not doing those six things that make up fiduciary responsibility for the landlord, they are doing it for the tenant. I'm not saying that all agents do that well; I think the agent in the story that tried getting his clients to pay two months security should lose his license.
3
If you are 55+ or low income (less than 60K annual), consider Los Angeles. I applied to 90 properties in Central and Southern California.
Within four months I had at least seven properties wanting to rent me a studio or one bedroom apt. No broker fees and most units only increase the rent per HUD approval.
I settled on a subsidized tax building, in Hollywood: one year lease at $839 a month for a 750 Sq ft apt.
If you can work remotely, the U S Dept of Agriculture controls 250K low-cost units in all 50 states, even Nantucket Island and Catalina Island!
Get on multiple wait lists:a family of 3 or 4 in some cases, can make over 80k.
2
This is something that can be easily solved. The state should require all brokers to post the same sort of posters that employers are required to post on sensitive topics like non-discrimination and minimum wage and to include specific language in their rental agreements.
Resistance, up to the point of ignoring the laws have always been the tactics of people who are adversely affected by new legislation.
4
As a broker, it’s always amusing to read layperson insights into what brokers do, what landlords should do and who deserves what to make the things ‘fair.’ When demand far exceeds supply (surely everyone can agree on this point), prices rise. When NYC creates 700k jobs but only 197k housing units, it’s a landlord market, with more and more people willing to pay more and more for the same housing.
Consider the legions and legions of prospective tenants who are chasing the few desirable apartments (a direct result of the housing supply crisis). With the protections NYC provides renters - the most stringent in the country - it’s a costly mistake to rent to the wrong person. One bad tenant can ruin an entire building for years. Of course laypeople don’t understand that. For the same reason they don’t understand why landlords don’t do the work of a broker.
The greatest amusement of all is the belittling of brokers and decrying their fees. Take a weekend of study, get your license and step into the arena, then let everyone know how little work is involved and how great the compensation is. Or better yet buy a building, cut out the middleman brokers and make a killing! It’s all so obvious according to the commenters!
Their ignorance is the exact reason brokers will never, ever go away.
15
@Andy Deckman
99% of rental brokers add zero value, and they willingly lie and deceive landlords and prospective tenants. Since brokers are not the actual landlords they have no incentive to find the "right" person. In many cities, like Washington DC, the landlord pays the rental listing broker so the incentives are fully aligned. There is still a ton of cheating and deception, but it is far less than in NYC. A huge number of rental listings on StreetEasy are either fake or put up by rental brokers who are not engaged by the unit owner (illegally).
Landlords should also be able to contract with service providers that provide listing services and application processing. These providers should get a fixed annual fee, where all incentives to lie and cheat are removed. Then, and only then, will the system improve.
43
A fixed rate for brokerage services? Surely you understand that fixed rates (rent stabilization) are exactly what created this mess of a housing market in the first place.
These ‘solutions’ always have unintended consequences. But voters love ‘em so here we are!
7
@Andy Deckman I've lived in NYC for over 20 years, and have never paid a brokers fee. The place I live in currently, I dealt directly with the landlord.
11
Any real estate broker found skirting the law should permanently lose their license.
29
@TrumpsGOPsucks 100% agree. There are apparently 14K licensed agents & brokers in NYC (apparently). Because so many of them are Zero and the public does not take the time to report them, they reflect so negatively on so many who are amazing and do a fantastic job. This is why there are issues. Many uneducated people are able to get and hold their licenses.
3
Sounds like the legislation didn't address compliance in any meaningful way. Put your thinking caps on and get that done or trade it in for a dunce cap. Both sides of the problem are voters that are unhappy now instead of just one.
3
I'm from the sticks so I have not dealt with this problem of being illegally gouged when trying to rent a home. It seems so wide spread in NY. Have the tenants of NYC formed a tenants union? There are a lot of tenants out there.
1
The bottom line in CA and NYC is housing shortage causing the rapid rent increases and resulting tenant protection regulations and or rent control laws. The real solution is to provide sufficient supply of housing which requires zoning law and new housing approval regulations changes. Until then high cost real estate is here to stay.
5
@CAboomer
Yup.
Everything has gone up in cost that goes into managing real estate. Capping prices leads to supply shortages.
Change zoning laws and providing incentives for developers to build massive apartment complexes is the only way help.
2
@CAboomer I agree that's part of the solution, but we also need to create incentives to build middle income housing (or discourage luxury housing). It's ironic that in NYC now there is an enormous glut of new luxury housing that will likely take many years to sell off, and an incredible shortage of other housing. There's something really wrong with this picture.
19
Currently 65% of NYC rentals are listed No Fee on Streeteasy.
This is a made up issue. Folks choose to pay a fee or they rent a no fee apartment.
Without an upfront fee, the rent is higher.
It's not rocket science and it's not evil.
8
I just finished my search where I found two apartments that worked well all in the midst of the whole no more broker fee drama. In the end I submitted an application for one apartment only to be told the fee had jumped by three hundred dollars but there would be no brokers fee. I flat out told them I would pay two hundred under asking as well as the broker's fee. They accepted. I did not want to deal with the hassle of not getting a new place because of the fee issues.
2
@Sasha
All you need to do is search amongst the 65% of listings in NYC that are no fee. It was your choice to include fee listings in your search.
2
@Tall Tree Agreed! AND whether there is a fee or no fee, it is all taken into account in the rent. Simple math. These people need to wake up.
2
Are brokers unique to NYC? I’ve never heard of them. I haven’t rented since the early 90’s, but it seems like circling apartments in the classified ads was a lot easier. And cheaper.
3
@Kb you don’t hire the broker, the landlord does. The broker is responsible for showing the apartment, submitting the application, and negotiating between the applicant and the landlord. The ad in the paper is listed by the broker, and only provides the broker’s contact info. The broker is the one to show you the apartment. They are specific to each site, they don’t show you around to many different properties.
3
@LB
I'm a landlord and I've never hired a broker.
They say "I'll find you a tenant."
I reply, "Ok, but I'm not paying a fee."
They reply, "The tenant will pay."
If I list the apartment myself, I increase the rent because there's no fee.
Either way, the tenant pays.
5
@LB
I'm a landlord and I've never "hired" a broker,
but I've let them find me tenants.
They say "I'll find you a tenant."
I reply, "Ok, but I'm not paying a fee."
They reply, "The tenant will pay."
If I list the apartment myself, I increase the rent because there's no fee.
Either way, the tenant pays.
The supply vs demand mix for NYC apartments - especially those that are (relatively) affordable - is like nowhere else. Hence a broker system like nowhere else. Deal with it.
5
@GC People did deal with it, by passing laws intended to prevent brokers from charging outrageous fees. The broker system isn't tied to the demand, available apartments will still get rented without someone in the middle trying to take a cut.
25
@GC Deal with it? So is that how a democracy works? People these will fight back against old systems in place. I'm sure NYC Taxis thought they were always going to be the only game in town...your time is running out. Same with the rental car industry.
3
While there are good people involved in the realm of property issues, it does seem to attract a significant proportion of the greedy,
6
This story is very upsetting. There aren’t enough affordable housing units to help those New Yorkers with small budgets.
If you ever lived in the projects you had to leave when your income went up and you no longer qualified for government aid. They now raise your rent and allow you to live there, making those units less accessible to those in need. We have a huge homelessness problem in NYC and no solution in the horizon.
Then, when you try to move to a private house you are slammed with these usurious fees. How can anyone afford anything in NYC anymore?
I did some online research and the Real Estate Board of New York mentioned above donates millions to NY State lawmakers’ campaigns. I wonder...
18
@MC Woodside, no one is thrown out of the Projects if their income goes up. Their rent will simply increase. There are many middle-class families living in the Projects.
2
I have heard of people making over $100,000 living in the projects, just because they pay close to market price. These units should be available to the really poor families, only. If a family is able to increase their income they should be asked to leave, to make room for other poor New Yorkers.
I see the elderly living in the streets of NYC. How does allowing middle class people to live in the projects while allowing the elderly to go homeless make sense?
3
New York isn’t a small budget town. I wanted to move to Monaco but all the landlords there conspired to price me out
5
What is the landlords motivation to involve a broker?
May be the landlords get a cut of the broker fees?
4
@Rajesh landlords don’t want to walk around showing days, nights and weekends. Nor do they want to field hundreds of calls and emails. Nor do they want to take pictures, create ads and pay for ads.
This all would take several full time employees, more office space and cause huge headaches.
Brokers are necessary and save tenants money.
4
@JR Since the broker is for the landlord's convenience, then the landlord should be paying the broker.
41
@JR As a landlord in Seattle, I don't think having an open house and collecting applications at that time is really that much trouble. Nor is taking pictures and making an ad. I doubt all those activities take more than a few hours and a couple of hundred dollars. It certainly wouldn't take "several full time employees". If these fees were reasonable compared to the value given people wouldn't be so upset.
26
NY has far too many people getting in the middle of real estate deals, skimming money off the top without providing any real service. The antiquated laws make it easy for these people to thrive. After leaving NY, I successfully sold my own condominium in OR to another buyer without the required "middle people". It's not rocket science and saved me tens of thousands.
34
I work in the multifamily space and have never understood the NYC real estate market.
A much better system than the dated broker system would be the one everywhere else in the country. Landlords pay websites like apartments.com to list their sites in their database. The advertising costs (which include just having the property listed on the website), like the remainder of the costs (as in every industry), are built into the rent. This allows for an efficient system that is easier, more transparent, and less costly for the tenants AND the landlords. Win-win!
11
In NYC a large percentage of apartments are rent stabilized - the fee can’t be built into the rent.
4
@JC and who will walk around buildings spread out over several NYC neighborhoods showing apartments 7 days a week morning though night? And field hundreds of emails and phone calls?
5
@JR uhhhh...the owner?
6
Ah, yes, greed is alive and well in our American culture. Where is a sense of integrity in this market madness? Most brokers and owners just rationalize the lack of it; blaming "supply/demand."
Just because one has the power to take advantage of situation (exploit it) doesn't mean one should.
The unspoken agreements that determine a culture are human constructs. They are not determined by gods or an invisible hand of a "free market." They are part of the sotry we tell ourselves, and each other; change the story and we change the way we behave with each other.
The big question is how do we change our story of ourselves?
7
As a one time agent I have experience taking friends to see over 30 properties over many days in my own car and then having them find something with another agent. I spent many many hours setting up appointments, picking them up driving them around, etc., etc., etc. This is not to mention wear and tear on my car plus fuel expense, etc. In the end I made nothing for many days work, in fact I had a large loss. Please also note that if they had purchased or rented the commission would have been split up to four ways! I was told the average agent at the firm was making about $32K/year. I don't think that included expenses. Can you live on that? Who can live on that in New York???
5
@Marco then don't be an agent. they make so little because they provide so little value. if it weren't for the MLS cartel in most areas, agent/brokers would go away
10
If the tenant hires the broker, there should be fiduciary and conflict of interest principles applied so the broker is actually working for the tenant. And be there should an open market value to brokers.
11
Socialism and guaranteed employment, at last -- but only for real estate brokers.
This is America at its best.
15
Broker isn't a real job. This story might as well read "the law cause tremendous stress for tens of thousands of grifters now worried about how they can make a living."
I don't know, how about getting a real and/or useful job?
85
@Nathaniel NY State wants to legalize prostitution and drugs - are those real jobs? Is the taxi driver - a real job? I can buy a car and drive people on my own, right?
Is the cleaning person or babysitter - are real jobs?
I actually can pull your tooth too, if you let me, I don't need to go to college to learn how to pull the tooth.
All I need to do is watch youtube video a couple of times, LOL
2
New York is like a foreign land, with customs and laws that don't seem to make any sense and don't apply anywhere else. What I'm wondering is why does a renter need a broker? What does the broker do that a renter can't do for herself? Why would anyone pay such ridiculous fees to a broker? I've rented many houses and/or apartments in my 45 years of adulthood and never used or paid a broker, or even knew what one was. I've always just dealt with the property manager or the owner. I thought that's what every renter did. Who knew the renters in NYC had to pay bribes to get an apartment?
26
@Ms. Pea You should see what they need to go through to buy and sell apartments in NY. A two week process in OR becomes a 2 month process in NY and costs 4 times as much. It's out of control.
3
Combine this with the other NYT article today about private equity firms hoovering up middle class housing and becoming the new slum lords, and you see why we have Trump and Bernie Sanders. Bernie can't get elected, but that doesn't make him wrong.
15
My brother had a job with the city where he and a black woman would act as potential tenants to see if landlords were discriminating. If they were turned down, a city employed white couple would apply and if they were accepted that was proof enough of discrimination.
The city should do the same with these fees. If they are required to pay them, that’s proof the law is being broken and a very stiff penalty and perhaps jail time should be brought. It would pay for itself with the collection of fines. Maybe even seizing the building would be appropriate.
69
Matthew, to quote you back to yourself, in your Feb. 10th on this issue you wrote "The judge’s order means that brokers can continue to collect a commission from tenants for rentals...The decision was expected to stay in place until at least March 13."
This article is like throwing fuel on the fire & deeply confusing everyone. Brokers are being vilified as sharks (lawyers & landlords must appreciate someone else holding that position) & tenants as prey. There are so many costs brokers contend with from StreetEasy's stranglehold (buying up competitor's sites, exclusivity demands & pricing) to REBNY's membership fees (~$2000/yr), the sheer amount of foot work to cultivate landlord relationships (to have apartments to show) no-show clients, working out solutions from those with bad credit, no credit or need co-signers & the paperwork that needs to be processed. And it's often an on-going relationship- after a tenant has moved in they turn to the broker when there are problems. There will always be those who take advantage, from both sides in transactions, but it's wrong to tar everyone with the same brush.
12
@Lenie brokers are useless leaches in nearly all real estate transactions
3
These do gooder laws always have unintended consequences.
If I’m a landlord that can only take a one month security deposit I sure as heck am not going to accept an even remotely marginal tenant.
Only the affluent need apply.
8
@Will.
Exactly. All these new rent laws are making it so hard to qualify for an apartment that folks are moving out of the city.
2
@Will. lets be honest here, Will. you weren't accepting marginal applicants anyway. so the law didn't make you do anything you weren't already doing.
4
More evidence (and there is more evidence appearing every day) that New York Real Estate is EARTH'S LARGEST CRIMINAL ENTERPRISE.
18
I think I'd send a notice after the fact stating that I believed I had been denied the apartment because I insisted on following the law, and that I would pursue a civil claim.
It might not happen, but I bet it would scare the bejesus out of the owner.
8
@Alexandra No, they have people with cash in hand lining up to get ripped off.
Arrest the brokers if they refuse to follow the laws.
14
@Pete I know my comment sounds flippant and a bit over dramatic, but I'm serious. Brokers and landlords are breaking the law and scamming innocent people out of thousands of dollars. They use the threat of not being able to find suitable housing as leverage for unreasonable and illegal fees. This is intimidation and fraud. In any other context, these people would be arrested.
6
@Pete
No, it's still legal to charge a broker fee.
Of course, it's easy to find a no fee apartment in NYC. 65% are currently listed No Fee on Streeteasy.
@Tall Tree
I always wonder out of that 65%, what no fee listings are actually real.
There are a selection of agencies in the city that are notoriously known for bait/switch listings (check reviews).
I laugh when I see the same agency have multiple apartments listed in the same building, with the same ‘stock’ photos (or no photos at all). Beware. Send a message to the Agent from that site, see how many times you’ll get Sorry that Listing is Rented, just Didn’t have Time to Take the Listing Down. oooookayy
That’s why a lot of renters will eat the broker cost and just pay up. It takes a lot of time to go out on your own to find legit apartments.
1
The new laws will hurt tenants, because the industry will do its best to take punitive action against them and to manipulate, ignore, and violate the law at every turn, and will say this is all the laws own fault. This is basically racketeering, and it’s exactly what I would expect from this industry and the amoral people who populate it.
5
If there ever was an area that needs robust government prosecution, this is it. Brokers who violate the law should be fined heavily and stripped of their ability to serve in this capacity. In the case of repeat offenders, there should be jail time. Vultures.
17
Much better for a tenant to pay a one time broker fee than for the landlord to raise the rent whereby the new tenant would pay a higher rent each month of ALL YEARS they live in that apartment. Over time it adds up to be much more expensive for the tenant. Better to pay a one time broker fee. This is just math and reality. There’s no way to change the 2+2 = 4
And capping the security deposit at one month was incredibly stupid. If an applicant isn’t well qualified and the landlord can’t get extra security deposit then that applicant would just be rejected instead of being able to put extra money down, which they get back in the end anyway. OR they will have to go to a third-party like Insurent where they will be charged perhaps as high as a one month fee, which is money they do NOT get back. So obviously, you would rather pay extra security deposit as opposed to being flat out rejected or forced to pay a high fee to a third-party
4
@JR so its much better to keep a system where a useless middle man gets a cut rather than let the market dictate what the natural rent should be? There is no evidence that the rent would go up but if it does it does...the market will dictate whether it goes up or down without propping up useless middlemen who provide no useful service
4
@JR Or pay another one-month non-refundable fee to corporate guarantors (those probably lined the pockets of the City officials with bribes in order to pass this law).
Bunch of tenants with low cash income, slightly bad credits, international students, those with no credit history are out now. Just international students were bringing tons of money into NY, now they will think twice before they come to our city. Dorms cost double just for one semester, and not every School providing the dorms.
As a broker and property manager, I'm all for removing broker fees from rentals.
But the caps on application fees are ridiculous. It takes time for me to process the application, run your credit report, call your previous landlords and employers to make sure the information is correct.
Also, I can't tell you how many times I've processed said applications only to have the prospective tenant tell me they are moving to another address. If I don't charge at least 100 dollars for the application, I am literally working for free and that isn't right.
The new rent laws have also gone way to far in not allowing me to recoup any costs on Individual Apartment Increases, which have since been totally reformed to offer me zero incentive to improve the apartment once it is gone.
I just recently evicted a pimp and his prostitute from one of my units, the same unit which occupied 5 other adults (totaling 7 in a 3 bedroom apartment) and they left the place a disaster. Floors warped, bathroom totally destroyed, bedrooms with 3 bunk beds.
So far, I have spent more than 12,000 in litigation to remove them, I'm now into the apartment for 15,000 in improvements and labor and I'm able to increase the value a whooping 60 dollars over the new law. The rent has gone from 1510 for a 3 bedroom apartment to 1580.
So I basically lose the profits on this unit for a total of 2 years, all because I had the misfortune of having criminals occupy my place.
How is this fair to me?
9
@Stergios how is it fair to pass your bad luck onto the new tenant?
1
Just bought a condo directly from the owner with NO BROKER. Saved a bundle, owner made more, and the entire deal took an hour max. Closed in a week with great lawyers. Middle men and women clog the pipeline.
9
@Fred Talbott I did it in OR without lawyers. I took two weeks to make sure I was doing every thing correctly.
1
@Fred Talbott Good for you, now try any coop in Manhattan, I'd like to see how you will navigate your boat, Captain.
1
Only in New York does this happen? Why? It's just bizarre. These brokers do nothing for anyone except somehow find their way into the transaction to steal people's money. It's literal theft.
14
@Lannock '
There is a severe housing shortage in NYC because half the apartments are rent regulated and never turn over.
Ordinary folks, like this couple, are forced to fight over the remaining scraps.
The solution is simple. End rent control! It's so simple, but the fools in power use it to stay in power, so don't expect it to end any time soon.
2
That amount is just exorbitant.
1
Hm... My parents had had various multi-family rental properties all my life - then slowly started getting rid of them. When I asked why they said, "We're being told who we can rent to; how much we can charge; it's getting harder to get rid of the deadbeats; and so on... It's not our business anymore - and they can have it. It's going to be a case of "Be careful what you wish for" because that isn't going to turn out the way they wish it would." A few decades later the headline is "Affordable housing shortages across the nation!" Who could have seen this coming? Property owners stripped of their rights to manage their own property - in favor of the rights of those who generally had nothing to start with - not even a clue, much less a deposit - and now wind up with even less. Suddenly you can't buy housing, unless you're willing to pay under the table for it? Big surprise. Not.
7
@Johnny Woodfin , the laws apply to renters, not purchasers.
@mark... You're still buying. In this case buying the right to occupy the property per the lease agreement - for 1 year, 2, etc. If you were buying-to-own, you'd need a bigger down-payment instead of generally smaller security deposit and/or pet deposit, and so forth. Either way, unless you buy all the rights to the property - as in a cash buy - you're still subject to the restrictions of the bank, the saving and loan, etc. Even then, you have HOAs to deal with, local zoning for use, etc., etc., etc... I bought so I could do what I wanted with the walls, patio, etc. My sister always rented because if things with the neighbors, tax collector, etc. went south, she could move easily. Pros and cons to everything - but know the reality (as in how the real world works) - so you don't end up, after the fact, singing the blues and demanding, "Laws should be passed!" There are laws... The law of the jungle still among them.
1
It is hard to take hands out of other people's pockets when you have been stealing from them for decades. Buckle up consumers and fight!
13
Things change. Just look at the taxi medallion situation. With rental brokers, it’s going to be a messy transition, but it has always been clear that rental brokers are providing a service for landlords and the fee should come from their pockets. Rental brokers have a terrible reputation...basically as one of those professions that is known for preying on people...from withholding information to outright lies...all with a general patina of laziness. The majority of them are most interested in 1) what’s your budget? 2) how’s your credit? 3) when do you need to move by? If those three answers don’t align for them—as in “high,” “excellent,” and “within three weeks,” they quickly lose interest. Meanwhile, in addition to your health and your job, what is more important than your home?
8
@Michael Cummings This broker's fee sounds crazy to people in the Midwest. In Dallas-Fort Worth, you never pay a fee to find an apartment. The apartment complex pays.
1
Having experienced this racket first hand after living all over the world, I'm thankful that there are people trying to change this practice. No where else in the US will you find legalized extortion other than the greater NYC area. When I searched for an apartment in NYC, as I did more than one time, I ended up staying in my current and inconvenient place. I contacted apartments myself, found them myself, only then to find out a broker, who did absolutely nothing to help me find the place would demand a whole month's rent for me to get the apartment. I came so close to getting a place where the first payment would have been over $11K when a month's rent was about $2K. I have no sympathy for these brokers who frequently do little to nothing yet still get paid.
19
ugh I so remember this when living in NY, what a racket. Renting an apartment in NYC is all about smoke and mirrors. They advertise one thing and then add on fee for this and then that. I always wondered how in the world they can get away with this and it's simple, people put up with it. NYers as fiesty as they are, are way too complacent. I was lucky, my employer reimbursed me for all the fees as I was just moving to the city.
I commend the state for finally doing something about it. Now they just need to work on those EXCESSIVE toll fees. Another gripe of mine, that I can't wrap my head around.
13
@Gisselle
All these rules and laws are making it harder to find an apartment, not the other way around.
The only way to help is to rezone and incentize the contruction of thousands and thousands of new apartments.
But NYC is so anti-business at this point, all they can do is keep passing draconian legislation that encourages landlords to not be landlords anymore.
2
Realtors are going to go away eventually, given the nature of the work they do, they add no value to the transaction. All the postings are on line and much like buying a used car from Craigslist, the buyer and seller can complete the deal without a third party. A standard contract can be produced online, printed and signed, regardless of what the realtors say. I can't understand the huge commissions, 5-6% of the selling price. currently being paid in the expensive Boston area, where it's a sellers market. Perhaps the industry can survive if lower rates, 1-2% for example, become the norm.
8
@sob you aren’t thinking very well here. Someone has to show the apartment during the day, in the evening and on weekends. Landlords are not going to walk from one building Leon in Bushwick to another building the Owen on the upper West side to another building to own in Queens. The only way these apartments can be shown often enough is through brokers. And often apartments have to be shown 20 to 50 times before they rent. Learn to think better
2
@JR then let the landlords pay the broker fees, since they're the ones who benefit.
10
@mark
I'm a landlord. Either I increase the rent to pay the broker or the tenant pays.
As a renter who plans to stay for awhile, it's better to pay the fee and start out at a lower rent.
1
Finally, government actually looking out for the renter! Brokers are out of control. it's time for the playing field to be leveled. Of course, the landlords are going to act scummily when that behavior is encouraged by brokers and has been for years/decades. Let's see if enforcing this law will actually happen.
10
Reminds me of the curriculum laws passed in my state for public schools. All words, no funding or bite to make it happen. You have to fund enforcement to get laws to happen. The buy up of property by corporations in my hometown has made it virtually impossible to "win" the bid. Guess we are not moving again...
9
Almost moved into the building Morgan Hirsh and Madeline Anthony looked (467 Keap St), and also worked with the broker Tal Mucktar-Barnes - who was either ignorant of or willingly ignored tenant laws. What the article doesn't say is that the building is rent-stabilized, which the landlord and the broker illegally DID NOT DISCLOSE and actually DENIED. Also asked for first, last and security PLUS broker's fee - $14K total.
99
Outrageous brokerage fees, multiple months of security rent, huge application fees, and other add on costs make it a horror for a tenant to rent an apartment in New York. This is the reason why more and more people are leaving New York for other areas of the country where it isn't impossibly expensive to live. When you look around the city in the early evening you see thousands of apartments where no one is living. This is a recipe for a disaster; NYC will lose its vitality if only the rich can live there. The current generation will not travel for more than an hour to work and an hour back because they can't afford to live in the city. They are left with no life except work. In the cities that the emigrants are moving to you can get a house with land around it, 15 minutes from work for 20% of the cost in NYC. Why live in NYC.
42
@Joel Friedlander How about the ability to cast your vote and have it count?
1
My son and his girlfriend was looking for an apartment through street East last year. They were offered a nice apartment in SoHo as sublet of a current tenant were going to live to California for at least a year. But the broker at Street easy asked them to wire a significant amount of money “first”, then can proceed of paper work. Also he said the Apt is available now so you have to be in hurry, otherwise you’ll lose this great deal. After telling me all this I said it sounded fishy. He agreed and pulled out all their document from the site . They were scammed or almost got scammed...they didn’t get the money.
11
@More And More I doubt that was actually a broker licensed with NYC. If it's too good to be true - it's not true. People running scams on-line not are licensed brokers.
3
@More And More May be your friend did not do such a good job afterall? on StreetEasy, you can search for 'fee' and 'no fee' apartments. So she should have known first what to see and what questions to ask. But then, when one clicks 'on the bottom' of the listing, this is StreetEasy's Bait&Switch where they connect people with 'experts' who 'work for them' and then pay StreetEasy some sort of a referral fee. No miracles out there.
1
@More And More You want to be careful when it is a sub-let. One must check whether the lease allows for a sublet and then whether the lease is actually in the name of the person who is subletting the apartment. Prior clearance from the landlord is probably also required. In any case NYC is a market where you want to see the apartment in person before you give any checks out.
2
A recent friend researched apartments and found one on Street Easy. She contacted the person at the bottom and scheduled a time to meet. The broker showed up, unlocked the door and showed my friend the apartment. After my friend decided to take it, she was hit with a broker fee of nearly $3,000+. How is this fair? My friend did all the heavy lifting; all the broker did was show up to unlock the door for a viewing. In a city where affordable housing is nonexistent, asking somebody to pay first month rent, a security deposit AND a broker fee should be outlawed.
63
@Andreas You have to pay people for their work. One way is to pay a few for service, paying an agent for each showing, regardless of outcome. That could cost a prospective tenant a lot of money too. An agent may have to show an apartment 40 times before getting a taker and therefore being paid. In my opinion, the better way is to have the landlord pay the fee.
12
@Andreas Did you think about the dozens of people who looked at the apartment and decided they didn't want it? Showing apartments costs the broker time and resources.
In your world, would you rather the broker charge a fee to every person who wants to even see an apartment? How would you compensate brokers for their work?
4
@David You can't possibly think that $3000 to one person is fair for having to open a door to an apartment. They did not have to do anything else, just open the door. They could have used the superintendent to do that as there is no special skill involved.
22
As laudable as the new legislation passed last June was, it will be completely ineffective without the necessary oversite and enforcement by the city and state agencies that administer those laws. The real estate industry will as always , get away with whatever it can. There must be accountability -
63
@Anne
Actually it's the other way around.
Tenants will do whatever they can not to pay the rent.
If the City keeps cracking down on landlords, they won't rent their apartments. It's a very unpleasant, difficult business, and without sufficient profit, there's no reason to do it.
2
So, landlords are no longer allowed to collect more than one month security deposit.
So, if you have bad credit, lack financial documentation, have a pet, etc., instead of paying an extra month security to get the apartment, you will have no chance to get it.
Over-regulation!
10
@John Doe Why should you have to pay more than one month just because you have bad credit? The security deposit is there exactly for this -- to cover the landlord against risk. One month is plenty.
42
@gus because people with bad credit are more likely to default on their commitment. Let me turn the question around, why should people with good credit have to pay any security deposit?
17
@Chris -
The security deposit is to provide funds for repairs if you damage the apartment. It is not meant to cover rent defaults.
18
So, brokers find apartments for the prospective tenants - which otherwise, they would have never known existed - and now the prospective tenants think they shouldn't pay the broker.
A brokers job is not only to walk around and show apartments. A large part of their work is the knowledge of apartments that are available, and guiding people through the renting process.
I wonder if people like this look to get out of paying others, after they've performed work for them.
5
@John Doe A brokers job is to list and find potential tenants for the Landlord. Landlord's don't want to do the listing and the leg work, so they hire a broker to do it for them. Why is it that the tenant should have to pay for that service? Tenant's could easily find their own apartment's if Landlords listed their own apartments. It sounds to me like the "people" not paying for a service are the Landlords....
130
@John Doe Tenants are supposed to find listings online that landlords put up. My building for example does not use brokers, ever. If the landlord wants the broker to put up the listing for them, the landlord has to pay them.
40
@John Doe Brokers work for the landlords, not tenants. They do not "find apartments for tenants." They are intermediary layer inserted between tenant and landlord to manage the renting processes landlords. To assert the opposite in anything but the smallest fraction of cases is absurd.
67
Just as bad in Atlanta! $2,400 in application fees before we got a 3 bedroom. Over half the time, despite carefully bring in my little girl and sons, they would charge $50 -$100 app fee, cash only, then and only then immediately say “We have no 3 bedroom apartments available and the law requires separate bedrooms for children of different sexes.” And keep the cash.
So we finally took all the receipts (We had insisted.) and took them to the IRS who sent out agents to apply and found that just over half of the apartment offices never reported the cash! That had an effect. But did not get us an apartment.
And it has occurred for us in several other cities.
79
If New York did not do so much to restrict housing and apartment construction, it would not have these problems.
20
@Warren Lauzon
Yup, but the far left which controls the city think laws and regulations will provide more housing.
In reality, they're encouraging landlords to stop renting apartments because they can't make a decent profit.
2
@Warren Lauzon You're wrong. The laws of supply and demand have been legislated out of existence in NYC.
2
This was an incredibly frustrating racket 20 years ago when as a college student a broker gouged my roommate and me $2K. A friend from school told us he was moving out, showed us his apartment and walked us to the landlord to rent the place. The landlord then informed us that we had to pay a broker two months rent for services not rendered.
Im so glad the city is taking steps against this practice.
200
@Julie In retrospect, would it have been better just to pay the rent and move in. The landlord may not have caught on til you graduated.
1
@Julie If it was such a horrible deal, why did you pay the fee?
Why did the landlord allow it to happen? Obviously, you were willing to pay more for the apartment than the rent. Why didn't the landlord just jack up the rent by 2K/12 months?
The answer is obvious. Brokers are not going to commit to the landlord until the landlord commits to the broker. Before the broker takes on the listing, it wants to know that it won't do a lot of work and then have the landlord find a tenant and pay no fee.
1
@Mike Connors
My roommate and I protested to the landlord and were told that everyone in the neighborhood was doing this and we had no choice if we wanted to live in the neighborhood.
I understand why he did it, but having rented in Austin, Los Angeles, and Denver, I had never been asked to pay 2 months rent for a place I found on my own. How does everyone else around the country manage to rent their units?!
7
Brokers are worried they won't make a living? Brokers don't do anything. Really, what do they do that a potential can't and doesnt do himself? Let the property owner pay the fee as the law prescribes and stop complaining. It's more than the broker deserves.
191
Exactly, these rent brokers are a fairly recent thing. I rented a one bedroom in a pre war building on 28th between third and Lex in 1976 for $300 a month! Had a elevator and my view was the Empire State Building. Four apts per floor, 10 story building. They waived 1/2 of the deposit because I painted it myself saving the supervisor’s time.
When my wife and I decided to leave NYC, a few weeks before she encountered a women that asked I there was anything for rent in our building, she said yes, ours. She showed it to her and later that day signed a standard two year NYC lease with Larry, our great super.
These brokers somehow managed to parasitically get themselves between the owners and tenants. How and when did this happen, and why did NYC allow it? They are nothing but pimps and can go back to whatever con they were running before brokers existed.
52
@PeterW If they don't do anything, then why do tenants and landlords pay them? Why don't both parties agree to split the money that the worthless broker would have gotten? The tenant would save money b/c they would pay a smaller fee. The landlord would be happy b/c it would be getting a fee it wasn't otherwise getting.
4
@Mike Connors Why do landlords put up with brokers? It must be the kickbacks that go to the landlord to hire the broker in the first place. The only real reason that a landlord would use a broker is to limit their own paperwork and the time to show a place. And, if the landlord wants that, they should pay for the service. But to make everyone go through a broker is just adding to the cost for no good reason.
5
Take a breath! Will no one in NY consider that a main factor in the apartment shortage in NYC is the excessive layers of regulation? Endless reviews of building plans. Requirements for trivia. Paperwork and inspections without any regard to need. WWII ended in 1945 so why are rules put in place then still a factor? SF has the same problem. And guess what, more rules means less and less housing! NIMBY rules when the solution is to allow more building!
23
Have you been to NYC in the past ten years? There’s lots of new housing—for the rich.
You may find that your ideology is not always a good guide to actual conditions. In that case, the conditions are not the problem.
80
@Donna Gray In San Francisco, Leasing fees are paid by the Owner to their broker. There are rental agents representing applicants, but they are generally relo companies using unlicensed agents.
7
@Donna Gray "WWII ended in 1945 so why are rules put in place then still a factor?"
Are you saying that lead paint no longer stunt brain development? asbestos no longer cause lung diseases?
Some regulations are indeed antiquated: copper plumbing, for example. But many are still important for safety reasons. Let's consider regulations based on their merits, not their age.
33
If the laws are not going to be enforced, then the brokers are not going to follow them.
154
@S
This will go on until there are some very public prosecutions and heavy fines and/or prison terms for violating the laws.
87
@Glenn Ribotsky
Wrong, The courts put a stay on the no broker fee law. If the courts uphold the DOS ruling, broker fees paid by tenants will go away, but rents overall will rise if landlords pick up the cost.
2
What the law totally misses is that you are taking away someone's livelihood: the brokers. If there is no commission, then what are they doing? In other markets, the landlord pays that commission from 1st month's rent to the broker. Why does the law not realize that landlords are going to be very resistant to assume that cost when the law has slashed so many other fees?
8
@k kelly -- What are they doing, is exactly the question. Why does anyone need a broker to rent an apartment? I've lived in half a dozen states in my lifetime and rented apartments in all of them and never used a broker. I don't get the whole concept. What do they do, and why on earth is what they do worth so much money? Every time I read one of these stories I wonder anew why anyone lives in NYC.
133
Change happens. Farriers were mostly put out of business by horseless carriages.
It's much better to deal responsibly with displacement (social safety net, etc.) then to try to prevent it.
27
@k kelly drug dealers have to make a living too. Are we really going to take away someone's livelihood?
Obviously I don't mean that, I'm just trying to make a point as to how empty this argument is. Brokers are people who add no value to the economy and perform a service that almost anybody can do, requiring no training or skills (other than sales-pitching).
57
I’ve noticed that brokers now post listings saying « broker’s fee paid by owner » and they just increase the rent by 1000$/month. The owner pays the broker directly and ends up making the additional 1000/month indefinitely.
52
@Anna C If every owner did that we would at least see the true cost up front instead of the gotcha. Then rental rates would either meet the needs or not and then the real work of regulation should prevent gouging. This free market excuse is just that....an excuse.
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@Anna C Agreeing with Alan, the rental market will take some time to find its equilibrium, but eventually prices will incorporate some of the cost, and settle at a level the market can bear. I am all for it, if the RE brokers provide a valuable service, LLs should pay them accordingly. If LLs can pass that fee to the renters, so be it. But now renters will have more freedom to shop for cheaper/better apartments and LLs will definitely lower the commission they pay.
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