A new analysis exposes the steep fees New York City brokers charge renters, with costs reaching as high as $13,000.
A recent study by rental-listing company StreetEasy shows that the average upfront cost for renting an apartment in New York City with a broker’s fee has skyrocketed to nearly $13,000. This hefty sum covers the broker’s fee, the first month’s rent, and the security deposit, the NY Post reports.
In 2023, the average upfront cost for apartments with a broker’s fee was $12,667, compared to $9,984 in 2019. The increased figures come at a pivotal moment as New York City prepares for a critical vote by the City Council on Wednesday. The City Council will consider a bill designed to alleviate the financial burden of costly broker fees on tenants. The bill, known as the Fairness in Apartment Rentals (FARE) Act, seems to have strong, near veto-proof backing.
StreetEasy surveyed over 500 tenants for its study and found that more than 80% of respondents believe landlords should cover broker fees. Additionally, 76% said they felt compelled to pay the broker’s fee to secure a home in New York City’s highly competitive rental market.
“The average New Yorker will be spending more than 10 percent of their annual income just to come up with these upfront costs,” StreetEasy Senior Economist Kenny Lee said.
Renters are speaking out against the high fees they were forced to pay brokers to snag an NYC abode.
“It doesn’t seem like that’s something that happens elsewhere,” Kayla, a 31-year-old Williamsburg, Brooklyn, resident, said. She estimates she paid $4,000 in broker fees for her apartment seven years ago. “Because I did all the work for this [apartment], I feel like I wasted my money.”
Jemma Rowlands, from Melbourne, Australia, believes the broker’s fee she paid for her first New York apartment in 2018 felt “expensive and unnecessary.” Doing away with the upfront cost “sounds good to me,” she says of the proposed bill.
Supporters of the council bill argue that it will alleviate the financial burden on renters. However, critics contend that landlords will offset the broker fee by increasing rent prices on annual leases.
“The FARE Act will fundamentally disrupt New York City’s real estate market, raise rents, and make it even more difficult to find an apartment, and nothing StreetEasy has proposed will address any of those concerns,” a rep from the Real Estate Board of New York said.
Supporters of the measure argue that the bill would benefit both tenants and brokers, the latter of whom often work to rent a property without any guaranteed payment.
“Once we see this bill in place, both landlords and agents will have the opportunity to negotiate how the compensation will be taken care of, and tenants will finally have a choice when it comes to if they want to work with a broker,” Lee said.
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