There are many costs associated with living in an increasingly expensive New York City, but the broker fee might be the most detested one.
Moving into an apartment in the city can easily cost more than $10,000 in upfront costs, including a security deposit, first month’s rent and a fee paid to the broker. The fee is typically more than one month’s rent, and right now the median rent is roughly $3,400.
The City Council is expected to approve a bill on Wednesday to shift the cost of broker fees to landlords in most cases.
The bill’s sponsor Chi Ossé, a progressive City Council member from Brooklyn, said that President-elect Donald J. Trump’s victory showed the urgent need for Democrats to address concerns over the cost of living.
“A cruel and unfair system that has persisted for decades will end,” Mr. Ossé said. “Democrats will prove we can tackle affordability. And the voters will see that government can work for them.”
The New York broker fee system is atypical. In most other cities, landlords pay broker fees for rentals.
The real estate industry has strenuously opposed the bill. The powerful Real Estate Board of New York, the industry’s main lobbying arm, has argued that if landlords are forced to absorb broker fees, they would simply pass the cost on to renters by raising rents.
The bill has 32 sponsors in the 51-member City Council, two votes away from a veto-proof majority that might be necessary if Mayor Eric Adams tries to stop the bill.
Mr. Adams, a Democrat who has close ties to real estate leaders, said at his weekly news conference on Tuesday that he had concerns about the bill and he did not want it to hurt small property owners.
“The bill has the right intention, but sometimes good intentions do not get the results you’re looking for,” he said, warning that the bill could lead to “permanent” rent increases.
The bill requires whoever hires a broker to pay the fee. Landlords and their agents would be required to disclose fees in listings and rental agreements. Violations could result in a civil penalty, including fines of up to $2,000. The bill would take effect 180 days after it becomes law.
It has prominent supporters, including StreetEasy, the real estate listing website; Brad Lander, the city comptroller who is running for mayor; and Bradley Tusk, a venture capitalist and former adviser to Michael R. Bloomberg when he was mayor.
The City Council speaker, Adrienne Adams, is also expected to support the bill. The relationship between Mr. Adams and Ms. Adams, who are not related, has grown increasingly contentious and they have disagreed over how to bring down housing costs.
The city’s rental vacancy rate hovers at close to 1 percent, the lowest it has been in more than 50 years.
James Whelan, president of the Real Estate Board of New York, said in a statement that the bill was “yet another instance of prioritizing ideology over economic and practical reality when it comes to the city’s rental housing stock.” He argued that the bill would raise rents and make it harder for tenants to find housing.
Broker fees were briefly banned in early 2020 under sweeping rent protection laws passed by the State Legislature. But the Real Estate Board of New York sued, and the fees were reinstated.
New York’s broker-fee framework was established decades ago, when brokers were the gatekeepers to rental units and earned fees for listing apartments in different publications and answering calls. But today, most renters find an apartment online, and some never meet a broker.
Mr. Ossé, 26, the Council’s only Gen Z member, shared his own struggle to find an affordable apartment in his district. He has used social media to rally support for the bill.
The Real Estate Board of New York started its own ad campaign this week, showing an image of an empty apartment listing without pictures and listing the size as “bigger than a toaster, smaller than a subway car.”
In response to Mr. Ossé’s bill, the ad says, “I am no longer able to share information on listings. I promise this apartment exists.”
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