← All Of It with Alison Stewart
All Of It with Alison Stewart
FARE Act At Two Months: How Has Apartment Hunting Changed?
00:23:38
It's been two months since the implementation of NYC's FARE Act, which regulates the fees and practices of rental brokers in the city.
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- [00:08]
Alison Stewart
This is all of it. I'm Alison Stewart live from the WNYC studios in soho. Thank you for spending part of your day with us. I'm really grateful that you're here on today's show. If you're a fan of and Just like that and the Gilded Age, Cynthia Nixon will be here. She joins us to talk about starring in both shows. We'll also talk about the new Jane Austen exhibition at The Morgans celebrating 250 years of the author. And this month's full bio is about the 19th century self taught French artist Paul Gauguin. Today we'll learn about his friendship with Vincent Van Gogh. That's the plan. So let's get this started with renting. It's that time of year. It's the time of year that people consider moving and New York City has a problem. It continues to face a housing affordability crisis. It makes it difficult for the average New Yorker to find a reasonably priced apartment in today's rental market. So we thought we'd check in on a new law, Mentel Brenters, the Fairness in Apartment Rental Expenses act, simply the Fair Act. It went into effect on June 11, 2025. The Fair act mandates that who whomever enlisted the broker, often a landlord or a property management company, well, they should pay the broker's fee. Some critics argue that the implementation of this law would lead to landlords increasing the price of rental properties to cover those costs. Last month, the New York times analysis of 1.3 million listings on the rental site StreetEasy suggested many landlords did raise rents the last week. The law took effect in June, often by hundreds of dollars. A month later, Street Easy released a report that the rental market was stable. To help us understand the law and how exactly the apartment hunting process has changed, is New York Times reporter Hope I get your name right. Mahir Zavari.
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Mahir Zaveri
Zaveri.
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Alison Stewart
Zaveri. Mahir Zaveri, thank you so much for joining us.
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Mahir Zaveri
Sure. Thank you for having me listeners.
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Alison Stewart
We'd love to hear from you. Have you looked for a new apartment in the last few months? How has the search been? Where did you go? Where did you look? Did you use the Internet? Are you considering hiring a broker to help you with the search or or if you moved into your apartment before the FAIR act, did you have to pay a broker or did you negotiate with a broker? What was the result? Call in and tell us your story. Our Phone number is 2124-3396-9221-2433. WNYC you can call in and join us on air, or you can reach out via social media. Olivenyc first of all, help us understand why there was a need for the Fare Act.
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Mahir Zaveri
So if you're a renter or want to be a renter in New York City, I think you're familiar with the broker's fee and it's something that doesn't exist in a lot of cities. But basically you are expected to pay 15% or one month's rent over to the landlord and the broker just to get the apartment. If you are familiar with New York City at all, you know that housing costs here are pretty extravagant. And the idea that you just have to fork over all this money to even get a new place, that was pretty hard pill to swallow. So that's something that renters, tenant advocates have been trying for a long time to get do away with.
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Alison Stewart
I'm going to ask you a really simple question. What exactly do property management companies do for people?
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Mahir Zaveri
Well, property management companies, I mean, they will make sure the building's running okay. They'll make sure that there's a super there. They'll make sure that if there's something broken that it gets fixed. In theory, there's sort of like a lot of administrative tasks that go into property management, file regulation, regulatory stuff with the city. But brokers on the other hand, I mean these are people who are meant to help people find apartments. And that was very different in the past than it is today.
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Alison Stewart
I was going to ask the past few, like look through the Village Voice in the back in the day, but now they have apps. How did the sort of predatory brokers fee gain hold?
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Mahir Zaveri
Yeah, and so to be clear, like with brokers, I mean they will, they will and still maintain that they do a lot of work for renters, whether or not you can see it. But in before the Internet era, they, you could call up a broker, be like, hey, I'm looking for a two bedroom, I'm looking in this neighborhood, these are my priorities. And then be like, all right, I have listings. Let me help you go see some. Let me help you go find some. So there's a much more physical presence in the apartment search that people don't really see today. Right. I mean a lot of people will go on Street Easy or other websites and look for apartments and they don't really see a broker helping necessarily. But of course, again, if you talk to brokers, they're like, we're the ones that take the photos, we're the ones that give you the floor Plans, we're the ones that sort of put these things together. So it's just a different dynamic.
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Alison Stewart
A lot of people have been on the hunt in New York City, and as you said, it can be a bit astounding how much things cost. I think the average studio apartment rent is about. A studio apartment is about $3,000 in New York. Before the fair act, how much would a typical broker's fee cost?
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Mahir Zaveri
Yeah, it's about 12 to 15%. Sometimes it's one month's rent. But so I mean, if you're looking at a. And that's 12 to 15% of the annual. So if you're looking at a $3,000 apartment, I mean, that's several thousand dollars.
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Alison Stewart
How does the broker's fee factor into the overall cost of signing a new lease for an apartment? This is pre fair act, right?
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Mahir Zaveri
I mean, so this is, I mean, as big as this is, it's just one thing that people often have to have on hand. If you're looking apartment, it's pretty common to have to have a broker's fee, have to have the first and last month's rent on hand, have to pay an application fee. I mean, there's, there's other things that, that go into it. So, you know, for a median rent asking rent, apartment, this cost often stretch into $12,000, $14,000. I mean, this is just money that people don't have.
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Alison Stewart
So what sort of advantages do renters find in hiring a broker's agent themselves when they're searching for a new place to live?
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Mahir Zaveri
I think from a renter's perspective, it was very hard to see what advantage there was because you could go on street, easy. You could say, I want a one bedroom and here are the neighborhoods that I'm looking in. And then it'll tell you all the listings that are on there. So often, like when you apply for an apartment, a broker might get back to you and they'll say, go here at this time to go see the place. But maybe all they do is open the door and that's it, and you get to see it and then they leave. So it's very, very hard from a tenant's perspective to see.
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Alison Stewart
Let's take a call. This is Peter calling in from Queens. Hi, Peter. Thanks for taking the time to call, all of it.
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Peter
Hi, how are you today?
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Alison Stewart
I'm doing well, sir.
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Peter
Good. I've lucked out with a broker. I did pay $3,000 fee, but it was on Fifth Avenue on 100 acres of view of the park. Now I'M couldn't find things. They sold the apartments of condo. You know, it wasn't stabilized. And then Fresh Meadows, Queens, 25 miles away, paying the same 3,000. And I make 103,000 a year. Landlords won't rent you as you make 40 times the rent. So nobody rents me in Manhattan. And now I got to make a move again. And I have cancer and I may have to move to like, New Paltz because I just can't afford the city I was born in. And I make 100,000 a year. It's not enough.
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Alison Stewart
Peter, good luck to you. I've heard. I was listening to a podcast of some realtors saying I have had more New Yorkers, people who have lived in New York say to me, can you help me find a place to live? I've lived in this one place my whole life. I have to move. And they're running into the same situation that Peter's run into.
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Mahir Zaveri
Yeah, I mean, this is a story that I'm sorry to say is repeats over and over and over again. People who make six figures, people who, you know, 10 years ago, 15 years ago, everyone be like, oh, that's, that's a lot of money. People like, if you're in another part of the country, you say you make $103,000. I mean, that's a lot for people. But part of the reason is, I mean, this is the whole problem with the housing crisis here. It's that there's not enough housing. And that's one reason why these costs keep going up. And, you know, until the city can get, get a handle on that, it's difficult to see that this will change.
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Alison Stewart
Who do you see as the, the person who's going to save it in the mayor's race?
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Mahir Zaveri
There are a. Just so many factors that go into the housing crisis. I think it's, it's pretty difficult for any one person to have an impact. But one thing you've seen, especially in recent years, is there's a bigger movement and more education around why housing is hard to build, what the factors are that go into the costs. And so I think you're seeing the electorate getting a little bit more educated, which is a good sign.
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Alison Stewart
Important. My guest is New York Times housing reporter Mahir Zavari.
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Mahir Zaveri
Zaveri.
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Alison Stewart
Dang it. Mahir Zaveri. We are talking about how the market has changed since the implementation. Implementation of the FAIR act, which regulates the fees and practices of rental brokers and agents in this city. Listeners, we'd like to hear from you have you rented an apartment in the last few months. How has the search been? What did you look for? Are you using the Internet? Are you considering hiring a broker? Our Phone number is 2124-3396-9221-2433. WNYC Last year, elected officials like Brooklyn Councilman Che Osea sponsored the Fair Act. You interviewed him about his struggle to find an apartment back in 2023. Would you tell us about that?
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Mahir Zaveri
Yeah, I mean, that was one of the more interesting stories I think I reported on. I mean, it basically started with him tweeting about it. And if you know Councilman Osei, you know he's very active on social media and that's how he connects with a lot of his constituents. And we heard about this and I asked him if I can just follow him along. And we spent a of weeks, couple a day just going and looking at a bunch of different apartments with a broker actually who took him to a few different places. And you know, we saw some that weren't great and that he didn't like and we saw some that he did like and ultimately the one he picked, I mean, I remember walking in there thinking it was a great place.
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Alison Stewart
The Real Estate Board of New York, it's an influential lobbying group. Is that fair to say for the industry? They really fought to keep the law from being adopted. What arguments did they pose?
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Mahir Zaveri
Yeah, I mean, so the Real Estate Board of New York, REBNY for short, many people are familiar with that acronym. It's, it's a group that not only does it include developers and landlords, but it also includes brokers. They represent a lot of brokers. And so a few points they'd make one as we did see a little bit based on our story. But if you're going to take away the broker's fee for tenants, which is basically what's happened, that means it's, someone's going to have to pay for the broker ultimately anyways, and the landlord is just going to raise the rent. And that means that rents will go up, not only this year, but they'll keep compounding and going up and up. So it'll add to the housing affordability problems. That was one portion of the argument. There's another portion where it's more legal and technical. But landlords in the past had entered into specific types of agreements with brokers to say, hey, you can market this apartment, but we're not hiring you. And you, you can market this apartment and you can collect the fee from the tenant, but we're not hiring you. Now they basically have to say, either we're hiring you or we're not. And that's a problem if you're a landlord. You're like, don't want to necessarily enter into a contract with somebody. Creates a whole bunch of questions. Of course, that's. This is all, you know, from their side. And they've filed a lawsuit. It's. It's making its way through the court system. They lost on the lower round, but they're appealing right now. Lost on most of the points. So it's. It's sort of an interesting perspective from that. You don't see from the tenant side.
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Alison Stewart
Got a question here. It says, what are brokers saying? How will they get compensated?
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Mahir Zaveri
Yeah, I mean, in talking to brokers, I think they are in some cases getting paid by the landlord. And in some cases also, they are dealing with tenants who are like, can I just pay the broker's fee and have a lower rent instead? And they have to say, no, I will get my broker's fee from the landlord and the rent will be higher. And that's just how the system is in other cases. I mean, I'm sure we'll talk about this more, but they're also trying to find ways to work around the system, the new system. But it definitely feels like a sort of transition phase right now of how they're adjusting to the new world.
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Alison Stewart
What kind of ways are they trying to work around the system?
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Mahir Zaveri
Yeah, so I just checked in today with the city, which is regulating this new law, and they said they've received maybe 800 more than 860 complaints. They've issued more than a dozen violations. And so basically, a couple things they're seeing a lot of. One, they're say, I'm a renter. I say I apply for an apartment on Streeteasy. The broker will get back to you. Say, actually, that apartment isn't available, but I have some other ones. Will you sign the thing saying you've hired me and then I'll show you the other ones. That's one thing that's going on in other cases. They just try to slip in a piece of paper and say, like, you know, you've hired me at some point just so they can defend, like, charging the fee. It's a lot of stuff that's going. I mean, the law is still new, so there's definitely an element of how this is working out. And so. So it's probably not surprising that you'll see some people kind of trying to find ways to work around the system, but I would say the numbers are lower than I would have expected.
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Alison Stewart
Let's talk to Ondine. Andine is calling from Hoboken. Hi, Ondine, thanks for taking the time to call, all of it.
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Ondine
Hey there. Thanks for taking my call. I've been a landlord in Hoboken. I am a New Yorker, if that counts or anything, but I've been a landlord for probably 25 to 30 years. And I've been a real estate agent for about 50, 15. So I sort of see both sides. And I just wanted to explain a little bit what a broker fee is because no one understands it. Like no client ever knows when I explain it to them. You know, as a Hoboken agent, just like New York, it's a big rental scene more than like say, a small town, right? So I do, you know, we, a lot of us agents in New York and Hoboken make our money on rental. So they're always shocked. So it says broker fee, which already is a misnomer. Say you're renting a $3,000 apartment. You, Joe, the agent is not making 3,000. It's an agency fee. The check is being written to your agency, ReMax or Weicker or Caldwell Banker. And if there's two, it's split between the two agents, the listing agent and the rental agent. So when I'm working with renters, I'm their agent, but I'm not a broker. The broker is the person who owns the office. The other thing with managed buildings, right, when there's no landlords involved in the managed building, right? Those buildings, there's a million of them in New York and there's no fee, like to let people know there's no fee. An agent can bring you into that building and often that building will pay the agent the broker fee because you brought them the client. I love to bring clients to a no fee building because I'm saving my client money and they'll remember me fondly and I'm making money anyway. But the, the cost of those apartments in a managed building with the doorman and the pool are much more. And then when they say there's no fee, somebody's paying the agent, right? So in South Jersey, there's no fee, but the landlords are paying the agents. It's the usual, you know, supply and demand thing. So agents, and it's true, they used to do more in the old days, meaning only six years ago, maybe seven, a person would walk in and with like in Hoboken, a parent will walk in with their 20 year old kid and say, I need an apartment. Here's our budget. You know, Hoboken is expensive. So if we were doing that. Now, here's their budget of $4,000, which is insane, but that's what it is. Can you help me find this? We need parking. Okay, then as a good agent, you look, you make the calls ahead of time, make sure everything's available. So when they show up on Saturday, you show them six apartments that are pretty good and then there'll be a bidding war. So, you know, it's not like, you know, agents get a bad reputation and, you know, listen, I'm an agent and I'm also a landlord, so I don't love them all, but it's not what people think.
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Alison Stewart
Oh, Deen, you gave us a great perspective. We really do appreciate you calling in with all of that information. Did you want to respond? Did you hear anything there that made sense to you?
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Mahir Zaveri
No, I think the only thing I would say is one thing I have heard. After the Fair act went into effect. I mean, there are some luxury buildings and places that are saying, hey, we're going to cover the broker's fee, we want tenants, we're going to just pay it. And it's no big deal to us. And that dovetails into the longer effect of this, which is the rents, they might have spiked in the aftermath of this. But Street Easy's position, this is a company that lobbied against this bill because they think the experience for tenants is their sort of guiding star. They think that the market's going to sort itself out, that landlords won't be able to charge all this money and try to pass along the fee cost to the tenants.
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Alison Stewart
Let's talk to Anya on line six, who's another licensed broker who's calling in. Hi Anya, thanks for calling, all of it.
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Anya
Hi, thank you very much for taking my call. So just to continue the conversation that you're already having, I think it's less of an issue for more expensive apartments. Not that because partially we have more supply of those, but it's a huge issue for lower end apartments or for regulated apartments. They will simply just not make to the marketplace at all. Because posting on Street Easy costs money. And if broker is not paying for the posting, the landlord will not pay for the posting. They will wait for the current tenant to recommend somebody, for the super to recommend somebody, for some activist tenant to show up and knock on the door. They have no desire to spend more on, let's say, a regulated apartment where they're already not Making anything and probably barely covering the tax that they're paying. Right. So access to lower end apartments for wide public, wider list of tenants will be even more restricted. So overall, as most regulation, it really hurts the tenants. Right. So especially newcomers. Right. So many, many regulations that we have are protecting people who are in place, but really hurting people who are moving to the city or younger New Yorkers.
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Alison Stewart
Thank you so much for calling in.
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Mahir Zaveri
Yeah, I mean, I think that's one of the arguments that has been pretty consistent from revenue and the property ownership and the broker side. And I think the thing to just watch as this unfolds is over the next few months, I mean, are we seeing a sustained decrease in the number of apartments that seem to be available? I mean there are a lot of other factors that go into it, particularly for this older housing stock. There's a whole other issue going on about how they can maintain their apartments or not. But with the specific effect of this law compared to the bigger problems, I mean, just something we're have to wait and see.
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Alison Stewart
Let's talk to George who's calling in from Westchester. Hi George, thank you so much for.
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George
Calling, all of it. What's going on in your family? Hi, George, you there? George is.
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Alison Stewart
Hello?
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George
I thought I heard George back there.
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Alison Stewart
You know what, let's go to Beau who's calling from Manhattan on line five. Hey Bo, are you, are you listening?
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Peter
Yes, I am. Can you hear me?
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Alison Stewart
I do hear you. Thanks for calling.
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Peter
Okay, let's look at it from the top down from the macroeconomics, the landlords, you know, the gold golden rule is you control it. The gold, you know, rules the landlords, the property tax. Politicians know that. So that's what controls the whole deal. They underfund the court system. The landlord tenant courts are a mess. Judges don't start until 10 or 10:30 and if you're starting at 7 o', clock, they're hundreds of cases behind. It takes five or six months just to get in front of a judge. And there you go. So that the whole system is clogged up because the landlords control the whole game. And that's why all your politicians for mayor out on the Hamptons this weekend.
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Rachel
You know, raising money.
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Alison Stewart
I wanted to ask, he talked about, are the taxes a big deal? Because there is a landlord who was interviewed on Spectrum News, he owns about a 48 unit building. He says the broker's fees on top of mandates like lead paint and energy efficiency, it's going to break him. The fees are going to break him.
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Mahir Zaveri
Yeah, I Mean, I think this is another one of these issues that has been rising and rising over the recent months and years. I think, again, I would try to distinguish between sort of luxury apartments, you know, a lot of moneyed apartments that, that can really deal with these things. Big companies that can absorb some of these costs and smaller landlords who have increasingly sort of said that these, these are problems. And the property tax system in New York City, you know, the city has done studies, Other people have done studies. It does unfit unfairly would be the way that certain people would put it, but it does disproportionately put the rent burden on apartment buildings.
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Alison Stewart
Let's talk to Rachel from Queens. Hi, Rachel, are you there?
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Rachel
Hi, I'm here. Can you hear me?
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Alison Stewart
You sound great. You're on the air.
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Rachel
Great. So the Fair act was for renters like us, was a huge relief when we heard about it. Passing the broker's fee was always just such a burden when it came to finding a new apartment. And I think for renters in this city, like, our dream is to own, right? Because renting is just money down the toilet. We're planning on raising our families here. We would love to own a place. And it just always feels so overwhelming when you need to move and find a new apartment that the upfront cost is like over $10,000. That's $10,000 taken out of, you know, a potential down payment. Right. That could be put on a place to own. So you just sort of feel like you get trapped in this system. And so the Fair act was a really big relief for, you know, middle income renters like us to kind of just keep a little bit of that dream alive that one day we won't.
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Ondine
Have to rent anymore.
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Alison Stewart
Thank you for calling in. This text says, I'm a broker and fees have been baked into the rents. Some landlords are happy about it and some think it's crazy and would prefer to keep their rents low and for the broker to collect their fee. I, I think one of the biggest issues is the vilification of brokers and landlords. Housing has become a sound bite. That's an interesting last line.
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Mahir Zaveri
Yeah, I mean, it's, you could say it has become. But I think it's kind of always been a little bit of a sound bite. We all have to. This is an issue that we all deal with, right? Everyone's got an opinion, everyone's got an experience. So it's a very hot button issue and it's going to continue to be that way.
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Alison Stewart
What are you going to be looking for in your reporting in the months ahead?
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Mahir Zaveri
Yeah, I mean, obviously, just especially with the Fair act, seeing if rents rise disproportionately, if there is something we can disentangle. And then, of course, the mayor's race, you know, we'll see what happens.
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Alison Stewart
We've been speaking with New York Times reporter Mahir Vahari Zaveri. Ah, gee, Mahir Zaveri, thank you so much for joining us. And thank you for putting up with me in your name.
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Mahir Zaveri
Thank you. Thank you for having me. Morning.
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Peter
One sausage McMuffin with egg, please.
- [23:41]
George
Okay, your total is.
- [23:42]
Peter
Wait.
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Mahir Zaveri
Let's negotiate.
- [23:44]
Peter
How's about you throw in hash browns for a dollar?
- [23:47]
George
Well, yes, sir, that price is already a dollar.
- [23:50]
Peter
Take it or leave it.
- [23:52]
Ondine
Take it, I guess.
- [23:55]
George
Buy one, add one for a dollar on sausage McMuffin with egg, hash browns and more with McValue. Most locations open 5am or earlier. Price and participation may vary. Limited time only. Valid for item of equal or lesser value. Since WNYC's first broadcast in 1924, we've been dedicated to creating the kind of content we know the world needs. In addition to this award winning reporting, your sponsorship also supports inspiring storytelling and extraordinary music that is free and accessible to all. To get in touch and find out more, visit sponsorship.wnyc.org.