On one side of City Hall on Wednesday morning was a horde of tanned, besuited, well-coiffed real estate agents, their anger simmering, all preparing to boil over at a City Council hearing to discuss the Fairness in Apartment Rental Expenses Act. If passed, the bill would require the party who hires a real estate broker to pay the broker fee. On the other side was a sundry crew of union members, tenants, and progressive lawmakers, who have lined up behind Brooklyn Councilmember (and renter) Chi Ossé's bill, which is just one co-sponsor short of a veto-proof supermajority in the City Council.
Leading the charge for the brokers was James Whelan, the president of REBNY, who was flanked on all sides by dozens of real estate agents in their summer hats and Gucci sunglasses clutching signs that read "DON'T RAISE THE RENT" and "AGENTS ARE TENANTS TOO" and flashing well-appointed smiles, tuned-up bodies, and the effusive energy that comes with selling selling selling.
"It's a beautiful day to be hanging out with thousands of your colleagues and friends," said Whelan, beaming at the crowd. "And we're here to say no to the FARE Act!"
The FARE Act (yes, the acronym doesn't quite work) would effectively put the onus on landlords to pay broker fees, which can soar into the thousands of dollars for tenants, an additional and often financially impossible burden for renters who are already being squeezed by a historically expensive and incredibly tight housing market. For many tenants, that extra broker fee can push move-in fees (first month's rent, the security deposit, and the broker fee) to an average of upwards of $10,000, according to Streeteasy. (Broker fees were briefly banned by state regulators following the passage of rental reforms in 2019, but that ban was overturned in 2021 thanks to a lawsuit filed by REBNY and various brokerages.)
While groups like REBNY have strenuously opposed any efforts to rein in rents (spending big on campaigns against policies like Good Cause Eviction), at the rally on Wednesday, real estate agents expressed a newfound concern for rising rents and the lives of tenants.
Barbara Ann Rogers, an associate broker at Compass, thinks that the bill would hurt agents, whose lives aren't easy—because they do the hard work of protecting tenants' rights by organizing all of the nondiscrimination paperwork and lease riders mandated by the City and state.
"People think all agents do is open doors, why would you pay someone for that?" Rogers said. "But New York City rental laws are incredibly complex. It's the most tenant-friendly place in the country, and it's the job of the rental agent to know that and stay on top of it, and ensure that the tenant's rights are protected."
Rogers, like many of those out on Wednesday, added that she believed that if landlords had to pay the broker fees themselves, they would simply pass the cost to tenants in the form of higher rents. Tenants, Rogers added, were already increasing the cost of rent citywide themselves. "Part of the reason those rents are going up is tenants' insistence on no-fee apartments," she said, adding, "There's always a fee, and always the tenant pays either in a fee or higher rent, and that will go on forever."
Brown Harris Stevens CEO Bess Freedman similarly shared that real estate agents and their broker fees, in fact, help keep rents lower than they would be otherwise. "Your work is often disregarded, discounted, and deeply misunderstood," Freedman said. "New Yorkers cannot afford for rents to jump at a time when rents are already so high."
Dario Nolfi, an agent with Corcoran, explained that tenants simply need to budget appropriately when looking for apartments.
"If they don't pay the broker, the landlord is just going to fold it into the rent," Nolfi said. "You move to a place that's affordable—if you're priced out of Brooklyn, you move deeper into Brooklyn or to Queens. It's supply and demand. You can blame agents because we're the arbiters, the key holders, but it's not our job to build better housing for the public. We're just doing our jobs."
On the other side of City Hall, Councilmember Ossé rallied his crowd for the hours-long public testimony that was about to take place on his bill.
"I know you saw the brokers outside. They're trying to pack City Hall and send a message that a majority of New Yorkers don't want this bill to pass—that's wrong," he said. "The people stand with the FARE Act."
The council hearing began with a familiar sight: councilmembers excoriating City Hall for once again playing the obstructionists in the face of necessary action by the City Council on behalf of New Yorkers. Instead of sending representatives from the Department of Consumer and Worker Protection, who would be in charge of enforcing the broker fee ban if it made it into the law, City Hall sent a representative from Housing Preservation and Development, who could provide no answers to the City Council regarding complaints about broker fees or statistics about how many tenants face difficulties in paying them.
"This administration has wasted our time today. You all showed up with no input, no analysis to offer on this bill," said Councilmember Sandy Nurse. "It's embarrassing, truly embarrassing. In the middle of a housing crisis, you came here, and you had no input. This is disgusting, I am livid. A lot of people here are tenants, and you've come here with nothing to offer."
Councilmember Julie Menin, the chair of the Consumer and Worker Protection Committee, then asked HPD to come back with the answers to the, as she put it, "unbelievably rudimentary data questions" by 5 p.m. on Wednesday—as she expected the public comment portion of the hearing to continue well into the evening.
As of 11 a.m., brokers had grabbed much of the available chairs inside council chambers, but outside, a line of renters eager to speak still curved around the block.
Inside, not all of the real estate agents signed up to speak were aligned with their compatriots. One of those class traitors was Anna Klenkar, a licensed real estate broker at Sotheby's. "It feels less like we're protecting ourselves, and more like we're protecting landlords, whom REBNY also represents," Klenkar said of opposition to the FARE Act. She added, "The FARE Act does not cap agent commissions. If our incomes drop because landlords pay us less than they expected tenants to pay, it just shows the current system is built on exploitation."
Klenkar reminded the council, "You don't need real estate's permission to pass this bill." The bill, she added, "is incredibly popular."
Additional reporting by Esther Wang.
