NYC apartment broker fees face a new reality for renters
New York’s broker-fee law shifts who pays, but tight Manhattan and Brooklyn rental markets still leave renters scrambling.
By Frankie Delgado · News Reporter
3 min read
NYC apartment broker fees are no longer the automatic renter ambush they once were, but a broker can still cost a newcomer real money if they choose to hire one.
MarketWatch personal-finance columnist Aditi Shrikant told a reader moving from Philadelphia to New York City that the smarter move is usually to skip a broker, unless speed and distance make the help worth the price.
The reader was looking for a one-bedroom in Manhattan or Brooklyn and worried that apartments might be disappearing before they hit public rental sites, or going first to renters with brokers.
Do I need a broker to rent in NYC?
According to Shrikant, most renters do not need one if they can search listings on sites such as StreetEasy and Zillow and can find apartments advertised as “no-fee.” In New York rental listings, “no-fee” generally means the renter is not required to hire or pay a broker to lease the apartment.
The exception is time. Shrikant wrote that a broker could be useful for someone on a tight deadline, or for a renter who cannot travel to New York to tour apartments in person.
That convenience can come with a sharp bill. StreetEasy says a broker’s fee is typically between 12% and 15% of one year’s rent, a cost that can land on top of moving expenses, deposits and the first month’s rent.
What changed with New York’s broker-fee law?
New York City’s Fairness in Apartment Rental Expenses Act changed the old fee setup by requiring the person who hires the broker to pay the broker’s fee, according to MarketWatch. That means a landlord who brings in a broker would be responsible for that cost, while a renter would pay only if the renter hired the broker independently.
Shrikant wrote that the law removes a major reason for landlords to use brokers, because it can shift the expense back to them. The Real Estate Board of New York, a lobbying group for the real-estate industry that includes brokers, opposed the act, according to MarketWatch.
Before the change, Shrikant described brokers as powerful gatekeepers in New York rentals, with relationships among landlords and building staff that allowed them to control access to certain listings and charge tenants large fees.
The bigger problem is the rental squeeze
Even with the fee rules changed, the rental hunt is still rough. The Corcoran Group reported that in June, active rental listings were down 16% in Manhattan and 0.4% in Brooklyn from a year earlier. Rents rose 10% in both boroughs over the same period, according to the company.
For a renter arriving from Philadelphia, the jump goes beyond the apartment. Zillow data cited by MarketWatch showed rent for a one-bedroom apartment was 146% higher in New York City than in Philadelphia.
Other everyday costs are also steeper. Numbeo data cited by MarketWatch put grocery prices 11.5% higher in New York City than in Philadelphia, while restaurant prices were 24.9% higher.
Shrikant’s bottom line: a broker may make the search easier, especially from another city, but the added cost is hard to justify when the move itself is already getting much more expensive.
This story draws on original reporting from MarketWatch.