Testimony of New York City Comptroller Brad Lander to the New York City Council Committee on Consumer and Worker Protection in Support of Intro 360, the Fairness in Apartment Rental Expenses (FARE) Act
Thank you, Chair Menin and Members of the New York City Council’s Committee on Consumer and Worker Protection for convening this hearing and providing the opportunity to testify on critical legislation impacting tenants across the city.
I strongly support Intro 360, the Fairness in Apartment Rental Expenses (FARE) Act, sponsored by Council Member Chi Osse. Intro 360 requires that whoever hires a broker in a real estate transaction pays the broker fee. The FARE Act is a commonsense bill that I urge the City Council to pass for two core reasons: transparency and fairness.
The FARE Act would ensure that fair, transparent contracts are negotiated between parties involved in renting apartments in New York City. Over two-thirds of New York households are renters. These New Yorkers, disproportionately lower income compared to homeowners, deserve to know exactly how much it will cost to rent a new apartment. This bill would simply provide renters with the same fair treatment and transparency that are already provided to buyers in the homeowner market: making sure all fees and costs are known to the renter at the outset of the transaction.
It is also a commonsense element of fairness that the party that chooses the broker should pay the fee. Where tenants hire a broker to help them find an appropriate unit, of course they should foot the bill. But where landlords are the ones to identify and hire, they should pay for the broker they have chosen.
New York City has the lowest rental vacancy rate in decades, with a historic low of 1.4%. That number falls below 1% for affordable units rented below $1,650. At the same time, rents across the city have skyrocketed. Median asking rent for publicly listed apartments rose to record levels in 2023 and stands at $3,500 citywide. As we found in our January 2024 analysis of the rental market, a family would need to earn $140,000 or more to not be considered rent burdened – double the median household income in 2022.
Families are leaving the city at alarming rates, often citing the cost of housing as a key factor. The Fiscal Policy Institute recently found that 90% of the state’s population loss is driven by residents leaving New York City – especially amongst lower- and middle-income families. The report also alarmingly found that Black and Hispanic New Yorkers are disproportionately leaving at higher rates than white residents.
Reducing the burden of broker’s fees on families trying to find a new home could potentially counter these concerning trends. With record high rents, an unexpected and often last-minute request for a broker’s fee can be the difference in a tenants’ ability to afford a prospective apartment. With an increasingly competitive housing market, this is an inefficiency that can and must be avoided.
I urge the Council to pass the FARE Act. Thank you for your consideration and the opportunity to testify.
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