New York City politicians have tried for years to legislate rental agent fees as a quick fix to the city’s housing crisis. Unfortunately, this approach distracts from real solutions, like building more housing to address supply shortages that drive up costs. It also jeopardizes fair compensation for hardworking real estate agents across the city. A City Council hearing is scheduled for June 12, where industry experts will have to explain why this type of bill would make it harder for agents to make a living while doing little to alleviate renters’ costs.
Not only is the policy lacking in substance, but the dialogue surrounding this bill is frustrating because it misrepresents our work and who we serve.
Home letting agents do more than just open doors to properties found online. We populate our home search platform with high-quality photos and market data to give renters a wide range of choices and the information they need to make informed decisions. This effort requires significant resources and time spent creating content, conducting research, and performing analysis.
We coordinate viewings so potential renters can tour the apartment before signing a lease. We provide market intelligence on nearby properties and the area. Without an agent, renters would have to rely on a lockbox or coordinate a viewing with a current resident. You never know if you’ll even be able to tour the apartment before signing a lease.
Licensed agents offer valuable expertise. They undergo rigorous training and continuing education, including important topics like fair housing laws and ethical practices. Renters can benefit from having a third party involved to ensure transparency and fairness, protect against bad actors, and facilitate a smoother rental process.
Closing a residential rental agreement requires a thorough background check, notarization, and processing of financial and legal documents. These steps provide peace of mind for both tenants and landlords when entering into a 12-month rental agreement.
The proposed bill suggests that the party hiring the broker should pay the broker. However, agents provide an essential service to renters in any transaction, regardless of who hires them. Shifting the burden of brokerage fees to landlords will inevitably lead to higher rent prices. Landlords need to recover these costs, and the easiest way to do that is to raise rents, ultimately making housing less affordable for tenants. Smaller landlords, who make up a large portion of the rental market, may not be able to absorb these costs and may have fewer intermediary services available to them.
Landlords may become more selective about the properties they list with agents, which may result in less availability of rental units. This decline in market properties could further worsen New York City’s already tight housing market, making it more difficult for tenants to find suitable housing.
These consequences are harmful to everyone. Eliminating tenant-paid fee structures could create financial instability for many agents who rely on fee income and reduce the quality and availability of their services.
Our brokers care deeply about our renters and are passionate about helping you find a home in New York City. On June 12th, we will fight for the interests of renters and the industry.
