Good morning. It’s Tuesday. Today we’ll look at whether a new local law has transformed the market for apartment rentals. We’ll also get a look inside the newly renovated Waldorf Astoria hotel in Manhattan.
This was supposed to be the summer when a new law on broker fees would change the rental market in New York City. The law, called the FARE Act, all but ended a longstanding practice requiring apartment-hunting renters to pay thousands of dollars to brokers.
My colleague Mihir Zaveri says the premise of the FARE Act was simple but transformative: Whoever enlisted a broker’s help would pay the broker’s fee. If a landlord gave a listing to a broker, the landlord would pay. A broker can show someone an apartment, but it isn’t the would-be renter’s responsibility to pay the broker — unless they had agreed to a fee arrangement in advance. Some brokers are showing apartments and, afterward, claiming there was a de facto payment agreement.
The Fare ACT went into effect on June 11. I asked Mihir to discuss whether the law has made things better or worse for renters so far.
You write that the results have been mixed. How so?
The intention of the FARE Act was to lower the sometimes staggering upfront cost of moving and make it less confusing and more transparent. In many ways, it has done that. Most renters can avoid broker fees when searching for apartments through online platforms like StreetEasy.
It’s less clear how the FARE Act will affect rents in the longer term. Many listings we looked at saw rent increases the week the FARE Act went into effect. Renters told us the same thing. If rents go up, even if the upfront cost comes down, that doesn’t really make things better for renters in terms of affordability.
StreetEasy says the law did not affect the rental market. But you and our colleagues from The Times’s data collection team looked at 1.2 million StreetEasy listings and arrived at a somewhat different conclusion.
I wouldn’t say it’s a totally different conclusion. Both StreetEasy and our analysis have the same caveats: It’s too early to really know how this will shake out.
That being said, the number of rent increases after the FARE Act was passed is relatively higher than we might expect in a typical year, and the median rent that landlords are asking for has also gone up more than a typical year. StreetEasy’s position is that supply and demand will shake out so that there won’t be meaningful rent increases because of the elimination of broker fees.
What does StreetEasy say?
StreetEasy says the effect has been limited.
It said it found that rent had increased 5.3 percent for listings that used to require tenants to pay a broker fee, compared with the last time those units were on the market. Units for which tenants did not have to pay a fee before June 11 experienced increases of roughly the same amount — 4.5 percent.
What about proponents of the FARE Act, including Chi Ossé, the Brooklyn councilman who sponsored the bill? Does he agree that tenants aren’t bearing the cost of making brokers pay the fees?
Ossé says the bill is making moving easier, and he’s encouraging renters to report brokers trying to violate the law. He said he hasn’t seen any major issues so far. The city’s Department of Consumer and Worker Protection, which is enforcing the law, has only issued a handful of summonses.
Ossé does acknowledge rent may be going up in some cases, but that it will ultimately flatten because renters will be unwilling to pay the higher rents and landlords will have to bring them down.
You write that the listings with rent increases were evenly split across big brokerage firms. Does that mean that there were no increases, or smaller ones, from less well-known firms?
Because the firms are smaller, the share of increases associated with each of those was lower, and nothing stood out to us. But we’re going to be taking closer looks at the data going forward.
If someone is apartment-hunting online, aren’t there fewer listings on brokers’ own websites now? Why?
There are, and that’s one complaint the broker industry has. In some cases, landlords allowed brokers to advertise apartments on the brokerage website, but also let them collect fees from tenants.
Now that they can’t collect fees from tenants unless they’re explicitly hired by a tenant, the brokers would have to charge landlords for those listings. Landlords may not be inclined to enter into an exclusive contract with those brokerages.
Weather
Prepare for another day of sunshine and temperatures nearing 82. Tonight will be clear with a low around 69.
ALTERNATE-SIDE PARKING
In effect until Aug. 3 (Tisha B’Av).
The latest New York news
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Trump officials blame sanctuary laws in a shooting: Administration officials blamed Mayor Eric Adams and New York City’s pro-immigrant laws for the shooting of an off-duty customs officer in a Manhattan park. They said they would flood the city with federal agents in search of people who had entered the United States illegally.
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Conviction in the Etan Patz case is overturned: A federal appeals court overturned the conviction of Pedro Hernandez, a former bodega clerk, in the killing of 6-year-old Etan Patz in 1979, a crime that alarmed parents across the country. It will be up to the Manhattan district attorney, Alvin Bragg, to decide whether to try Hernandez again.
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Drug charges in New York for Ecuador’s most powerful gang leader: José Adolfo Macías, who is the leader of the Los Choneros gang and is known as Fito, was arraigned on federal drug trafficking and weapons smuggling charges in Brooklyn. Macías, who had escaped twice before the Ecuadorean authorities apprehended him last month, was extradited over the weekend.
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Charged in his 9-year-old daughter’s death: A Canadian man who initially told the police that his daughter had been abducted near an exit on the New York State Thruway near Lake George, N.Y., was charged with second-degree murder. The girl’s body was found in a pond.
The Waldorf, redone
It was where Frank Sinatra lived in the 1970s, in what had earlier been Cole Porter’s suite.
And eggs Benedict and Waldorf salads? They were invented there.
Now the Waldorf Astoria has reopened, following a renovation that cost billions of dollars and took eight years.
Julie Satow, who covers architecture and fashion, got a first look inside. She writes that many of the Waldorf’s most notable mainstays are gleaming again. Peacock Alley has been restored to its original design. The Waldorf clock, commissioned by Queen Victoria for the 1893 World’s Columbian Exposition and a familiar feature of the hotel from its earliest days, has been immaculately refurbished. Here are two other highlights:
A piano that’s more delightful and de-lovely
Porter is said to have written many of his famous songs on it, including “Anything Goes,” “I Get a Kick Out of You” and “I’ve Got You Under My Skin.” But it had been relocated to a warehouse when the hotel closed in 2017. The following year, it was sent to the Steinway & Sons factory in Astoria, Queens, where it was rebuilt.
The Grand Ballroom
The Grand Ballroom — where the first Tony Awards were handed out, where John F. Kennedy supposedly met Marilyn Monroe and where countless charity fund-raisers have been held — is also newly gleaming. But the enormous crystal chandelier that once hung from the 44-foot ceiling is gone. Now indirect lighting emanates from three light coves hidden in the ceiling, casting an atmospheric glow.
What about crowd noise and vibrations that once made it impossible to rent out hotel rooms on the surrounding floors when big events were going on in the ballroom? The possibility that those rooms will be disturbed by clatter and clamor from the ballroom has been reduced with acoustical isolators — essentially, enormous rubber pads inserted into the columns and around the beams of the ballroom.
METROPOLITAN diary
Fire Escapade
Dear Diary:
A man who appears to be in his 40s throws open a third-story window at the corner of Bowery and Grand Street and climbs onto the fire escape.
He lowers the ladder, the rusty metal clanking is it descends, and climbs down quickly.
There is a hole cut into the awning of the bakery on the first floor. I watch the man pass directly though the letter B and then carefully drop the final few feet to the street.
He looks around, dusts off his hands and jogs away.
A second later, someone else pokes their head outside, looks around and then closes the window.
— Anthony Baker
Illustrated by Agnes Lee. Send submissions here and read more Metropolitan Diary here.
Glad we could get together here. See you tomorrow. — J.B.
P.S. Here’s today’s Mini Crossword and Spelling Bee. You can find all our puzzles here.
Davaughnia Wilson and Ed Shanahan contributed to New York Today. You can reach the team at [email protected].
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James Barron writes the New York Today newsletter, a morning roundup of what’s happening in the city.
The post Is a Law on Brokers’ Fees Giving Renters a Break? appeared first on New York Times.
