Mayor Eric Adams Raises Concerns Over City Council Legislation on Real Estate Broker Fees
Mayor Eric Adams expressed concerns about City Council legislation that would relieve most renters from having to pay real estate broker fees, a day before the bill is expected to pass the chamber.
The FARE Act: Aims to Eliminate Upfront Financial Burden for Renters
The FARE Act, also known as the Fairness in Apartment Rentals Act, would require whomever hires a real estate broker to pay the fee, a cost usually passed onto the tenant. Proponents of the bill argue that it would eliminate a major upfront financial burden for renters, but Adams contends it would leave landlords having to pay for brokers themselves, and then building that cost into tenants’ monthly rent to make up for the loss.
Adams’ Concerns: Unintended Consequences and Permanent Rent Increase
Adams believes that the bill would effectively transform broker fees from a one-time cost into a permanent rent increase for tenants. He also cast the bill as a “knee-jerk reaction” and has not indicated whether he will veto the FARE Act if it passes and comes to his desk.
Brooklyn Council Member Chi Ossé Responds to Mayor’s Comments
Brooklyn Council Member Chi Ossé, the bill’s prime sponsor, responded to the mayor’s comments in a social media post, claiming the legislation would not result in tenants paying more in rent, but less. Ossé also blasted the mayor for not fully supporting the measure, minutes after saying that Democrats lost the presidential election to Donald Trump because of the party’s lack of focus on “pocketbook issues.”
Proponents of the Bill: Broker Fees as a Barrier to Affordable Housing
Ossé and other proponents of the bill argue that broker fees, which can cost up to 15% of a tenant’s annual rent, are one of many barriers to New Yorkers’ access to affordable housing. The measure comes as the city faces a massive affordable housing shortage, with just 1.4% of apartments available to rent in 2023 — the lowest vacancy rate in more than five decades.
Conclusion
The FARE Act is a contentious issue that has sparked debate among city officials and real estate industry leaders. While proponents of the bill argue that it would eliminate a major upfront financial burden for renters, opponents argue that it would lead to unintended consequences and a permanent rent increase for tenants. The outcome of the bill remains uncertain, but it is clear that the issue of real estate broker fees will continue to be a topic of discussion in the city.
FAQs
Q: What is the FARE Act?
A: The FARE Act, also known as the Fairness in Apartment Rentals Act, is a City Council legislation that would require whomever hires a real estate broker to pay the fee, a cost usually passed onto the tenant.
Q: What are the concerns about the FARE Act?
A: Mayor Eric Adams and real estate industry leaders have raised concerns that the bill would lead to unintended consequences, including a permanent rent increase for tenants, and would take away renters’ currently available choice of apartment listed with or without broker fees.
Q: What do proponents of the bill argue?
A: Proponents of the bill argue that broker fees, which can cost up to 15% of a tenant’s annual rent, are one of many barriers to New Yorkers’ access to affordable housing, and that the FARE Act would eliminate a major upfront financial burden for renters.
Q: What is the current status of the bill?
A: The bill is expected to pass the City Council chamber, but it is unclear whether Mayor Eric Adams will veto the legislation if it comes to his desk.
