Moving Just Got Cheaper in NYC - What's the Catch?

The long-rumbling debate over NYC broker fees just detonated. As of June 11th, the Fairness in Apartment Rental Expenses Act - better known as the FARE Act - officially upended the way residential broker commissions work in New York City.

Under the new law, if a landlord hires a broker to market and lease a residential unit, that landlord is now legally obligated to pay the broker’s commission. Brokers can no longer turn around and bill the tenant - unless the tenant independently hires that broker to represent them.

This overturns decades of standard practice in New York City where tenants frequently shouldered broker fees, often paying 12-15% of annual rent simply to secure a lease - even when the broker was working for the landlord. FARE just broke that model.

One of the law’s stated goals was to ease upfront costs for renters. And here, it delivers.

StreetEasy estimates the average renter in NYC will save roughly $5,400 on move-in, with total upfront costs dropping nearly 42% — from ~$12,900 to ~$7,500 — when the broker fee is stripped out. Tenant advocates see this as a major affordability win, especially for younger renters, first-time movers, and working-class households priced out by steep upfront requirements.

But Will Landlords Really Eat This Cost? Of course not.

While landlords are now required to pay the broker if they use one, early signs suggest many are quietly shifting these expenses into higher asking rents. Some landlords immediately raised rents by $200 to $400 per month in the run-up to FARE’s implementation, directly citing the new law.

StreetEasy's data shows that asking rents on no-fee units have increased roughly 5% year-over-year since the FARE Act passed - slightly ahead of increases on fee-based units. That’s still far less than the full broker fee amortized into the rent, but the trend is clear: these costs aren’t disappearing, they’re just spreading across the lease term.

Over time, if rents continue to drift upward in response, tenants may find themselves paying comparable sums - just in monthly installments rather than as a lump sum at signing. The rent gets higher, but the barrier to entry gets lower.

Potential Market Fallout

The broker community is bracing for shifts. Some landlords may simply stop hiring brokers altogether, opting to self-lease and pocket the savings. Others may work with brokers but squeeze commissions or renegotiate service models. Certain segments (luxury leasing, high-turnover buildings) may see little change, while smaller landlords operating on tighter margins may exit the brokerage relationship entirely.

There’s also concern that some rentals could go "off-market" as landlords and brokers attempt to avoid the new structure entirely - especially in fast-moving neighborhoods where private networks can lease apartments without public listings. Craigslist Special anyone?

From a tenant perspective, while the cash needed to sign a lease drops, finding a quality apartment may become more opaque and broker services may thin out in some price points.

Bottom Line: A Reset

The FARE Act represents the most significant disruption to NYC’s residential leasing system in decades. It brings NYC closer in line with how rental markets function in other major U.S. cities, but introduces a set of new market dynamics that are only beginning to play out. Tenants may save up front; landlords will attempt to recoup; brokers will adapt.

The rules just changed - but good advice hasn’t. We’re working with clients daily to adapt their leasing strategies under the new FARE Act rules. If you want to talk through how this affects your property or search, let’s connect.

Best,

Corey Cohen

Founder of The Roebling Group