URBAN AGENDA: A Step Toward Fairness in Rental Housing
First, to address the elephant in the room: I wrote this column before the national election, and so I have no idea what the result might be. There is a decent chance that even when this column is published, we still will not know for certain who will be president come January. This is a terribly fraught time, with the fate multi-racial democracy in the balance. I encourage everyone reading this to continue standing up for the rights of yourselves and others, including the right to collectively determine this country’s leadership through free and fair elections.
But now to local news, where another issue of fairness is progressing in the right direction.
In a few days, New York City will finally join just about every other city in the nation and affirm a simple principle: tenants shouldn’t be charged exorbitant fees to brokers their prospective landlord hired. That’s the idea behind the FARE Act (Fairness in Apartment Rental Expenses), a bill introduced by the City Council Member from my native Bedford-Stuyvesant and northern Crown Heights neighborhood, Chi Ossé, which is slated to pass on November 13th.
Here’s how the system has worked for years in New York City—and virtually nowhere else. A tenant finds a listing for a vacant apartment. They make an appointment to see the place. Perhaps there is a broker there who shows them the unit; perhaps there is not. If they apply for the apartment and are selected, there is a high probability they will owe a broker as much as 15 percent of the annual rent for the apartment. In Manhattan today, that would add an additional $7,740 to the median priced apartment on the market, on top of first month’s rent and a security deposit, for a ghastly total of $23,200. This is an amount few New Yorkers can afford, given that the median household earns less than $77,000 a year.
While there’s a lot we can, should and must do to bring down housing costs, one of the simplest things we can do right now is to relieve tenants of exorbitant brokers’ fees. Under the FARE Act, tenants will only be responsible for that fee if they hired the broker directly. If the broker is working for a building owner, as is most often the case, the fee will be paid by the landlord. It is a simple, clear principle we at the Community Service Society of New York have been advocating for years.
In 2019, when legislators in Albany were contemplating a comprehensive reform of our state’s rent laws, we encouraged lawmakers to address New York City’s unfair broker fee system in the bill. When the historic Housing Stability and Tenant Protection Act was passed, it eliminated brokers fees, along with other unreasonable tenant application fees, unless a tenant hired a broker directly. An Albany County judge, however, prevented the state from implementing a broker fee ban in 2021, and tenants have continued shouldering these fees since then. Councilmember Ossé’s FARE Act undoes this act of judicial malpractice at the local level.
Last spring, when the FARE Act came up for a public hearing, we presented data from our most recent Unheard Third survey of New Yorkers showing that renters rarely have enough money to cover stiff broker fees. When we asked how much money people have in savings, the most common answer for rent regulated, subsidized and public housing residents was between zero and ninety-nine dollars. A majority of our tenant respondents said that if they faced a $400 expense, they would have to take on debt, borrow from friends or family, or sell something in their possession.
As a result, lower-income renters cannot move out of their homes, even if they are suffering through substandard or hazardous conditions or facing landlord harassment. As I wrote in a June column on this issue, the last New York City Housing and Vacancy Survey shows that tenants who moved from one apartment to another between 2021 and 2023 tended to be white and have higher incomes than renters who remained in their homes. Fifty-six percent of tenants who moved made more than $100,000, even though tenants with such high incomes only make up 36 percent of the city’s renters. Half of the recent movers were white, while whites make up only 32 percent of tenants overall.
The city, state, and—God help us—federal governments must invest in more tools to produce affordable housing, from the construction of new social housing to the expansion of rental assistance to tenants in need. But as we’re doing that, we can also take simple, straightforward and sensible reforms to bring down the cost of living in the city — including the cost of moving into a new, and hopefully better, home. We should be proud of the New York City Council for passing the FARE Act and taking one big burden off of tenants’ backs.
David R. Jones, Esq., is President and CEO of the Community Service Society of New York (CSS), the leading voice on behalf of low-income New Yorkers for more than 175 years. The views expressed in this column are solely those of the writer. The Urban Agenda is available on CSS’s website: www.cssny.org.
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