New York City Council Votes to End Broker Fees Squeezing Renters

This is a win for price competition - the "broker fee" paid by the renter is a classic example of principal agent problems / information asymmetry.

First, the service is being provided to the landlord (listing, tours, etc.), not the client, for all listings these days (I don't know any young person who has ever used a renter's agent, except maybe if it's provided in a relocation package). The renter has no choice in which broker to use to find/transact w/ the property, so there's very little price pressure for these broker fees.

Second the information asymmetry - the terms of the fee are completely opaque in the listings, and are not disclosed basically until signing unless you press brokers earlier. So there's basically no competitive pressure pushing these fees down, since it's basically a "junk fee" from a user experience perspective tacked on at the very end (and not listed on listings), and the landlord - who IS in a position to negotiate on price - doesn't care.

I don't buy the argument that there will be some long-term price hike in rents as a result of this decision - people who rent for 1-5 years already are paying a MASSIVE "net effective" premium for having an additional month's rent tacked on up front - but also it strongly incentivizes tenant retention (e.g. by being more responsive, keeping prices lower, etc.), because the landlord does not want to have to eat a broker's fee next listing.

I live in a building primarily owned by offshore investors.

NYC is a place where it's expected you'll always be on a lease - it's not common to go month-to-month after you fulfill your initial obligation (as it is in other cities).

I've heard a common grift here is to offer current tenants awful terms to renew the lease. The broker is banking on you balking, so she gets to tell the owner (who's never met you or even been to the US) "sorry - the existing tenant doesn't want to renew, so you're going to have to pay me to market the apartment again."

Absentee landlords always get screwed by their local vendors. Nothing new there. It's routine for property managers to solicit kickbacks from other services that they hire like maintenance and landscaping.