New York City Renters to Save Thousands as New Law Shifts Broker Fees to Landlords

Starting in June 2025, New York City renters are poised to experience significant financial relief due to the Fairness in Apartment Rental Expenses (FARE) Act, recently passed by the City Council. This legislation mandates that landlords, rather than tenants, will be responsible for paying real estate broker fees. Historically, these fees have added substantial upfront costs for renters, often amounting to one to two months’ rent.

According to a report by StreetEasy, this shift is expected to reduce initial leasing expenses by approximately 41.8% for apartments that previously required broker fees. Consequently, the average upfront cost for such units is projected to decrease from nearly $13,000 to about $7,500.

The burden of broker fees has long been a contentious issue in New York City’s rental market. These fees have created a “lock-in” effect, discouraging tenants from relocating due to the prohibitive costs associated with moving. Additionally, apartments without broker fees have typically commanded higher rents, averaging 4% more annually than units with fees.

Kenny Lee, an economist at StreetEasy, noted that the FARE Act will align New York City’s rental market more closely with national standards, eliminating the broker fee premium and fostering greater mobility among renters.

While the legislation has garnered support for alleviating financial pressures on tenants, it faces criticism from some quarters. Mayor Eric Adams expressed concerns that landlords might offset the additional costs by increasing rents, potentially transforming a one-time fee into a permanent expense. However, proponents argue that rent levels are primarily influenced by supply and demand dynamics rather than landlords’ operating costs.

The FARE Act’s passage marks a significant development in the ongoing effort to make housing more affordable and accessible in New York City. As the implementation date approaches, both renters and landlords are preparing for the changes that this legislation will bring to the rental landscape.