What's happened
On November 13, 2024, New York City Council passed the Fairness in Apartment Rental Expenses (FARE) Act, shifting broker fees from tenants to landlords. This legislation aims to alleviate financial burdens on renters, who often face steep upfront costs. The bill has sparked significant debate among stakeholders in the real estate industry.
Why it matters
What the papers say
According to the South China Morning Post, the FARE Act aims to prevent landlords from passing broker fees onto tenants, a practice that has been criticized for its financial burden on renters. Councilmember Chi Ossé, who sponsored the bill, stated, "We beat them," referring to the lobbying efforts against the legislation. The Independent highlights that the bill has garnered significant support among renters, with many expressing frustration over high broker fees. However, brokers argue that the legislation could destabilize the industry, with Jordan Silver from Brown Harris Stevens stating, "This is the start of a top-down, government-controlled housing system." The New York Times notes that the bill's passage comes amid rising concerns over living costs in the city, with Mayor Adams warning of potential long-term ramifications, stating, "Sometimes good intentions do not get the results you’re looking for."
How we got here
The broker fee system in New York has long required tenants to pay commissions, often amounting to 15% of annual rent. This practice has faced increasing scrutiny, especially as online listings and self-guided tours have become more common, leading to frustrations among renters.
Common question
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What is the Fairness in Apartment Rental Expenses (FARE) Act in NYC?
On November 13, 2024, New York City Council passed the Fairness in Apartment Rental Expenses (FARE) Act, a significant piece of legislation aimed at changing how broker fees are handled in the rental market. This new law shifts the financial responsibility of broker fees from tenants to landlords, which raises important questions about its implications for renters and the housing market as a whole.
More on these topics
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New York is a state in the Northeastern United States. New York was one of the original thirteen colonies that formed the United States. With more than 19 million residents in 2019, it is the fourth-most-populous state.
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Chi A. Ossé is an American politician and activist from New York City who serves as a member of the New York City Council for the 36th district, which covers parts of central Brooklyn.
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The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 caused by severe acute respiratory syndrome coronavirus 2.