The New York City Council’s broker fee bill will get a hearing, a significant advance from previous attempts to regulate commissions on rentals.
Committee on Consumer and Worker Protection chair Julie Menin committed to holding a hearing on the measure, Crain’s reported. Last year the bill failed to get a hearing, ensuring that it would not come to the Council floor for a vote.
The bill, reintroduced this year by Brooklyn-based Council Member Chi Ossé, would shift the burden of broker fees — typically 15 percent of a tenant’s annual rent — from the renter to the party that hired an apartment’s broker, often the landlord. Broker fees wouldn’t be outright banned, a provision that scuttled an earlier attempt at similar legislation at the state level.
The bill is co-sponsored by more than half of the City Council. But other bills with 26 or more sponsors have failed to come to a vote, usually because of opposition from the Council speaker or the chair of the relevant committee. Also, the Real Estate Board of New York is likely to mount an opposition effort, as it’s done in the past to protect brokers from potential income hits.
“Our members add significant value to the home search process for renters and will fight for fair compensation for their hard work,” Reggie Thomas, REBNY’s senior vice president for government affairs, said in a statement.
One argument made against the bill is that it would result in tenants footing the cost through rent hikes. Ossé disputed that, saying that rent stabilization rules and market forces are more likely to dictate landlords’ asking rents.
“If landlords wanted to increase rent anyway, they probably would,” Ossé argued.
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The bill has support from several significant unions, including DC37, the Retail, Wholesale and Department Store Union and the Committee of Interns and Residents.
The vast majority of rental brokers oppose the bill. Some already push for landlords to pay fees, meaning the bill would only enshrine their practices, but most argue the bill would harm their livelihoods and the ability of renters to navigate the market.