News Summary
The FARE Act has officially taken effect in New York City, requiring landlords to cover broker fees, which were previously the responsibility of renters. This significant change affects around 70% of the city’s population that rents their homes, potentially reducing upfront leasing costs by approximately 41.8%. While supporters herald it as progress toward affordability, critics warn that landlords may compensate for lost income by raising rents. The law aims to address fairness in the rental market, empowering renters while mandating compliance from brokers.
New York – Starting today, the FARE (Fairness in Apartment Rental Expenses) Act takes effect in New York City, fundamentally transforming the rental landscape for the city’s residents. Under this new legislation, landlords and property management companies will bear the cost of broker fees, which have traditionally been the responsibility of renters.
Approximately 70% of New York City’s population rent their homes, making this change particularly significant for countless households. Previously, broker fees accounted for about 12-15% of annual rent. By relaying the financial burden to landlords, the FARE Act aims to alleviate the upfront costs renters face when signing a lease, thereby promoting greater affordability within the market.
The New York City Council passed the FARE Act on November 13, 2024, by a vote of 42-8, marking a strong support base for the initiative. Mayor Eric Adams chose not to sign the bill, allowing it to become law without his endorsement. The legislation specifically prohibits brokers representing landlords from charging any fees to potential renters, including those related to listings authorized by the landlords.
A recent report from StreetEasy, a real estate search engine, indicates that the elimination of broker fees could reduce the average upfront cost of signing a new lease by approximately 41.8%, dropping it from $12,942 to around $7,537. This substantial reduction is expected to ease the financial burden for many renters who often face multiple relocation-related costs.
In cases where renters encounter demands for broker fees in violation of the FARE Act, they have the right to report these incidents to the NYC Department of Consumer and Worker Protection (DCWP). Brokers who violate the law could face fines of up to $2,000 for repeated offenses, a provision that supporters hope will deter such practices.
Supporters of the FARE Act hail it as a crucial step in addressing perceived injustices within the rental market. City Council Member Chi Ossé, the legislation’s sponsor, has advocated for the Act as a means to tackle unfair practices that disproportionately affect lower-income renters who struggle with hefty upfront costs.
However, the reaction to the FARE Act has not been universally positive. The Real Estate Board of New York (REBNY) has expressed disappointment, warning that landlords may respond by increasing rents to compensate for the lost income from broker fees. Industry experts are divided on the implications; while some celebrate the upfront savings for tenants, others speculate that these benefits may be offset by higher rents in the long run.
Adding to the controversy, Judge Ronnie Abrams recently dismissed a lawsuit from REBNY and other groups challenging the law. The judge ruled that the FARE Act does not infringe upon constitutional rights, reinforcing its standing and implementation.
As New York City renters navigate the changes brought by this new law, many will find themselves with reduced upfront costs, enabling them to manage their housing expenses more effectively in a notoriously expensive marketplace. The FARE Act represents a significant shift in the rental framework of the city, addressing long-standing concerns about broker fees and their impact on affordability.
While the full effects of the legislation on the rental market remain to be seen, the change is poised to ripple through the city, potentially reshaping the dynamics between renters, landlords, and brokers in the years to come.
Deeper Dive: News & Info About This Topic
- New York Post: Broker Battle Over Apartment Fees
- Wikipedia: New York City
- ABC7: FARE Act Impact on Broker Fees
- Google Search: FARE Act New York City
- Bloomberg: NYC Renters and Price Hike
- Encyclopedia Britannica: Rental Market
- CBS News: NYC Broker Fee Law
- Google News: Broker Fee Law New York
Author: STAFF HERE NEW YORK WRITER
NEW YORK STAFF WRITER The NEW YORK STAFF WRITER represents the experienced team at HERENewYork.com, your go-to source for actionable local news and information in New York, the five boroughs, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as New York Fashion Week, Macy's Thanksgiving Day Parade, and Tribeca Film Festival. Our coverage extends to key organizations like the Greater New York Chamber of Commerce and United Way of New York, plus leading businesses in finance and media that power the local economy such as JPMorgan Chase, Goldman Sachs, and Bloomberg. As part of the broader HERE network, including HEREBuffalo.com, we provide comprehensive, credible insights into New York's dynamic landscape.
