The New York City Council secured a major win for renters by passing legislation to end upfront broker fees, a common burden for those seeking housing across the five boroughs.

Changing the broker-fee landscape in NYC housing

New York City and Boston stand out as the only U.S. cities that require tenants to pay broker fees, even if they have never hired or met the broker. The hefty fee, typically around 15% of the annual rent, is added to the total cost when tenants sign their new lease. This fee goes directly to the broker who listed or showed the property, The City and Gothamist reported.

Councilmember Chi Ossé (D-Brooklyn) speaks during a rally at the steps of City Hall ahead of a City Council meeting on November 13, 2024 in New York City
Councilmember Chi Ossé (D-Brooklyn) speaks during a rally at the steps of City Hall ahead of a City Council meeting on November 13, 2024 in New York City. | Photo by Michael M. Santiago/Getty Images

The bill, which was introduced and sponsored by Chi Ossé, a council member who represents Bedford-Stuyvesant and North Crown Heights in Brooklyn, will now require the party who hired the broker, usually the landlord or building manager, to cover the broker fees. If tenants choose to employ their own real estate agent to ease the housing search, they are still responsible for paying that fee.

Council member Chi Ossé celebrates the passing of his bill during a City Council meeting at City Hall on November 13, 2024 in New York City. The NYC City Council held a series of votes that included the Fairness in Apartment Rentals Act, which requires whomever hired the real estate broker to pay the fee, essentially freeing renters from paying broker fees. The bill which was sponsored by Council member Ossé, passed by a 42-8 vote
Council member Chi Ossé celebrates the passing of his bill during a City Council meeting at City Hall on November 13, 2024 in New York City. The NYC City Council held a series of votes that included the Fairness in Apartment Rentals Act, which requires whomever hired the real estate broker to pay the fee, essentially freeing renters from paying broker fees. The bill which was sponsored by Council member Ossé, passed by a 42-8 vote | Photo by Michael M. Santiago/Getty Images

Why has the broker fee ban in NYC been so controversial?

This is not the first time tenant groups and city officials have called to ban broker fees in the housing market. Officials nearly resolved the issue in 2020, but the Real Estate Board of New York, a trade association representing licensed professionals in New York City, sued to block the state-level policy, per Gothamist.

REBNY also pushed back against this most recent legislation, arguing that it would lead to landlords increasing the cost of rent to cover the fees. However, one city council member disagreed with those claims following the 42-8 vote in favor of eliminating rental broker fees for tenants.

“This bill is common sense,” Ossé, said, per Gothamist. “It replicates how every other transaction exists in this country: Whatever you hire or order, you pay for.”

Other city officials share their views on the broker fee ban

Shaun Abreu, a council member representing Manhattan, highlighted the stark difference between affordable housing and those who cannot afford a place to live.

“This bill is seismic,” he said, according to Gothamist. “It’s going to be the difference between being able to have an apartment or not being able to have an apartment.”

While most council members voted unanimously in favor of the bill, eight Republicans and conservative Democrats opposed the broker fee ban.

“These fees aren’t going anywhere,” Vickie Paladino, a council member representing District 19 of Queens, said, Gothamist reported. “They’re just going to be built into rents, and rents will go up as a result.”

The legislation now awaits Mayor Eric Adams’ signature before becoming law.

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