←back to thread

New York City Council Votes to End Broker Fees Squeezing Renters

(www.bloomberg.com)
258 points JumpCrisscross | 1 comments | 13 Nov 24 21:38 UTC | HN request time: 0.201s | source
Show context
CraigRo ◴[14 Nov 24 00:39 UTC] No.42131882[source]▶
Most people here don't realize that there are two different markets:

1) Free market apartments: with tenants not having to pay broker fees up front, LLs can and will come up with workarounds. E.g. 'move-in-fee' of 5k or a 'move-out' fee. They will be able to charge more, especially on renewal leases.

2) Rent regulated apartments: LLs can't play those games, but they can say 'only available if you hire such and such a broker', or they might only list the apartments on a website that operates on a subscription basis where they get a cut somehow. Or, at the margins, this is a significant cost for money-losing units, so they might just add those units to the list of units permanently off the market.

I do expect brokerage fees to decline somewhat, and this may affect pricing for streeteasy and zillow and the other advertising portals, but this is not going to be a huge change, and is going to hurt a bunch of low-income tenants.

replies(3): >>42131976 #>>42132145 #>>42132170 #
1. crazygringo ◴[14 Nov 24 01:23 UTC] No.42132170[source]▶
No, because the broker fees never went to landlords in the first place. They don't need to make up for lost revenue or something like that, with the kinds of schemes you're proposing.

What happens now is that instead of a tenant paying $5K to the broker when they rent the place, the landlord pays $500 to a service which lists the apartment in a few places (like StreetEasy) and handles showing the apartment (which can often be offloaded to the super or similar). It's not even a "broker" at this point, it's just a service. Like how with existing no-fee buildings, it's just one more thing the management office does.

> I do expect brokerage fees to decline somewhat... but this is not going to be a huge change

Decline? Broker's fees, along with brokerages, are practically going to disappear (for the rental market). I don't know a single person who's actually gotten value out of using a broker, because everyone just finds the apartment they want on StreetEasy or whatever first.

This is going to be a gigantic change. And I have no idea why you think it would hurt low-income tenants? You're removing a huge fee they had to pay.