NYC Renters and Landlords: The FARE Act Explained
The Fairness in Apartment Rental Expenses (FARE) Act, recently passed by the New York City Council, is poised to reshape the rental market as we know it. Designed to shift the financial burden of broker fees from renters to landlords, this new legislation aims to make housing more accessible—but its impact is stirring up strong opinions across the board.
Here’s a breakdown of the FARE Act, its goals, and the ripple effects it could have on renters, landlords, and the NYC rental market.
What Is the FARE Act?
Traditionally in New York City, renters have shouldered broker fees that can amount to as much as 15% of the annual rent. For context, that’s roughly $7,000 upfront for a $4,000/month apartment—on top of first month’s rent and a security deposit. The FARE Act eliminates this practice, making landlords responsible for paying broker fees when the broker represents their interests.
Immediate Benefits for Renters
For renters, the FARE Act is seen as a major win. By removing steep upfront costs, this legislation aims to make renting in NYC less financially daunting. Council Member Chi Ossé, who introduced the bill, argued that broker fees have been an unnecessary barrier to housing for years. For tenants already grappling with high rents, the elimination of this expense could provide significant relief.
But there’s a catch: landlords may increase rents to offset the added cost of broker fees. This means renters could still feel the financial impact, just spread out over their lease rather than paid upfront.
Challenges for Landlords
Landlords, on the other hand, are understandably wary of the FARE Act. Some worry that this shift will eat into their bottom line, particularly for smaller property owners who operate on tight margins. The added expense could lead landlords to raise rents, potentially negating the benefit renters were meant to receive.
At the same time, landlords who adapt quickly to this change could find themselves in a stronger position to attract tenants. With fewer upfront costs, more renters may enter the market, increasing demand for rental units.
Mixed Reactions from Brokers
The FARE Act has sparked mixed reactions within the real estate community. Supporters argue that it brings NYC in line with most other major markets, where landlords typically pay broker fees. They also believe it fosters transparency, ensuring renters understand who the broker truly represents.
Opponents, however, fear it could disrupt the brokerage industry, potentially reducing the number of brokers willing to work with landlords. This could create challenges for landlords trying to market their properties effectively, particularly in competitive neighborhoods like Park Slope, Prospect Heights, and Crown Heights.
Looking Ahead: What to Expect in Summer 2025
The FARE Act isn’t taking effect immediately—it will officially be enforced starting in summer 2025. This gives both renters and landlords time to adjust and understand how the new rules will impact the rental process.
Between now and then, there will be an opportunity to gather data and feedback from both renters and landlords. Observing trends in pricing, tenant demand, and landlord strategies during this transitional period will be key to predicting how the market evolves. By the time summer 2025 arrives, we should have a clearer picture of how the FARE Act will influence NYC’s rental landscape.
My Take as a Brooklyn Rental Agent
As someone with over 14 years of experience in NYC’s rental market, I see the FARE Act as both an opportunity for clarity and a potential challenge for landlords who may underestimate the value of working with an experienced broker. While shifting broker fees to landlords may seem straightforward, the ripple effects could be far-reaching—and landlords who think they can bypass brokers altogether might find themselves facing unexpected hurdles.
Here’s why I believe brokers will remain essential under the new rules:
Brokers Bring Unmatched Resources
Marketing a rental property effectively is no small feat. Brokers have access to professional photographers who ensure your property looks its best and is positioned to stand out in a competitive market. We also leverage credit and background check services to thoroughly vet tenants, and we know how to distribute listings across the right platforms for maximum exposure. Without these tools, landlords risk losing time, money, and tenant interest.
Managing NYC’s Fast-Paced Rental Market
The NYC rental market moves fast—often too fast for landlords to keep up. A new listing can generate a flood of inquiries within hours, and landlords trying to manage the chaos often find themselves overwhelmed. Renters, meanwhile, expect quick communication, flexible showings, and a seamless application process. Brokers are the buffer that ensures everything runs smoothly, maintaining a positive experience for both landlords and tenants.
The Challenges of Long-Distance Ownership
Many landlords rent out their properties because they’ve relocated out of the area. Coordinating photography, handling inquiries, scheduling showings, managing applications, and overseeing move-ins and outs remotely can be a logistical nightmare. As a Brooklyn expert, I handle every detail on behalf of my clients, ensuring their investments are managed with care—even from afar.
Balancing the Costs
Landlords may feel compelled to raise rents to offset the cost of paying broker fees directly. While this spreads the financial burden over the lease term, it also risks pricing properties out of the market. A skilled broker can help landlords find the right balance—ensuring properties remain competitive while still maximizing returns.
Looking Ahead: Preparing for the FARE Act
Although the FARE Act won’t take effect until summer 2025, now is the time to start preparing. Over the next six months, I’ll gather insights from renters and landlords, tracking how this legislation is already shaping behavior in the market. By understanding these trends early, landlords can position themselves for success when the changes are fully implemented.
As someone deeply familiar with Brooklyn neighborhoods like Park Slope, Prospect Heights, Crown Heights, and beyond, I understand the nuances of this market better than most. Whether you’re a local landlord or managing your property from afar, I’m here to help you navigate this evolving landscape with confidence.
Have questions about how the FARE Act affects you? Let’s connect and discuss how to navigate NYC’s evolving rental landscape.
