NEW YORK – A public hearing over a proposal that could dramatically change the city’s real estate agent fee system takes place on Wednesday at City Hall.
Hundreds of citizens have registered to speak, both for and against the proposal.
The proposal, called the FARE (Fairness in Apartment Rental Expenses) Act, simply states that whoever hires the agent pays for the agent.
Hundreds of real estate agents say this change would destroy their livelihoods. There are almost 60,000 brokers and agents throughout the city.
If it becomes law, landlords will not be able to pass on the costs of agency fees to the tenant. A typical agent fee is about 12-15% of the annual rent, although fees are not capped in New York.
The Real Estate Board of New York, which represents real estate agents, tells CBS New York that if the landlord has to pay the fee, in many cases it will just raise the rent.
Councilor Chi Ossé, co-sponsor of the bill, says this is not true because the market determines rent.
“If your landlord could have increased your rent tomorrow, he would have done it yesterday,” Ossé said earlier.
“There’s a lot of things that are wrong and every time we try to fix one part of it, that part of it says don’t fix that part of it,” said attorney Jumaane Williams.
“I just moved last month and had to pay real estate agent fees. The apartments were going fast and I felt like I had no choice even though I didn’t use a real estate agent,” said tenant Suzy Englot.
“They will have to pay one way or another,” said real estate agent Janna Raskopf. “The landlord will have to pay us one way or another. It’s just baked into the rent.”
Seven out of ten New Yorkers rent. If this becomes law, they will no longer have to pay at least three months’ rent for a move: the first month’s rent, deposit and agency costs for the landlord.
CBS New York’s Mahsa Saeidi will have more on this story tonight on CBS News New York at 6 p.m.
