[screye]

Thanks for adding context. On the balance, I think it's a good bill.

Like tariffs, all taxes are eventually paid by the customer. But landlords are more capable of applying price pressure on brokers than random renters. It incentivizes landlords to hand out longer leases, which gives renters more security and fewer avenues for eviction. Won't be surprised if a software company (like streeteasy) takes over the ops side of the brokering business and drives the per-sale price waay down. Seems like an obvious startup idea.

[harmmonica]

Appreciate the optimism and I think what you're saying could happen, and I hope it does, but the flip side is the landlords don't exert that pressure, they bake the fees into the rental rate, and so the new reality is a stepped-up market rate caused by the legislation. If the landlords can just pass the fee on as a rent increase there's not really an incentive for them to offer longer leases so it will all come down to whether the rental rate increase (if there is one long term) sticks. Then I feel like the only thing the FARE Act will have done is raise the baseline rent and therefore the overall cost of housing for tenants (some argue that it's also better to amortize the "fee" over the lease term instead of having to pay it up front, but if the net result is more cost to tenants that seems like a bum deal).

Re the startup idea, agree fully. Zumper sort of tried what you're describing on the lease side in NYC. I interacted with them around the time they launched that effort and thought it was a bit rough around the edges (when is it not when you try something new?). Not sure if they're still doing it or how the FARE Act would've impacted them because I don't quite remember how/if they were using the software/marketplace to drive down the broker fee or just trying to capture the fee as-is (I think the former but not sure).

[djsavvy]

left this comment on another comment in this thread, so copying it here:

This is all true, but removing the broker fees and replacing it with a rent hike is still better for the market overall, since the broker fees simply artificially dampen liquidity. You only paid them when you moved into a new place, but that meant that if you are stuck with a crappy landlord you might not move out because the marginal cost of moving anywhere else in NYC is much higher.

[e1g]

At least in Manhattan, no one will give you a contract for more than a year - they will want to renegotiate in a year and demand is high enough to not worry about having no tenants. In Europe multi-year contracts are somewhat typical, but never heard of that in NYC. Similarly, very few will do a contract for less than a year. So the one-time broker fee gets amortized over 12 months, but the net effect is a wealth transfer from long-term tenants to landlords (because they continue paying that increase in perpetuity).

[screye]

This is a new phenomenon. I moved places after the FARE act, and for the first time, we were offered a 24 month lease.

May be a one off anecdote. But, it's a data point.