One yr in the past, the Metropolis Council upended how residences are rented in New York Metropolis.
On November 13, 2024, the Council approved the Equity in Condominium Rental Bills (FARE) Act, a measure that banned forcing tenants to pay charges for rental brokers they didn’t rent.
The invoice’s approval was the fruits of years of efforts to reform a system that usually price tenants hundreds of additional {dollars} to safe an condo. Proponents of the FARE Act argued that this dynamic gave landlords extra leverage to lift rents at lease renewal, realizing that tenants possible wished to keep away from these upfront prices.
Opponents, together with the Actual Property Board of New York, have blamed the law for rising rents and the disappearance of public listings, as house owners push the price of dealer charges to tenants and attempt to keep away from the looks of hiring a dealer. The group is awaiting a federal appeals courtroom choice on its legal challenge to the law.
This week marks one yr because the invoice’s passage, and 5 months because the regulation went into impact.
Right here’s how the regulation has performed out to date:
Itemizing Quantity
Regardless of the trade’s outcry over the regulation, the implications haven’t been as clear-cut as some predicted.
Inside 24 hours of its adoption, greater than 1,000 listings dropped from StreetEasy, as brokers and landlords scrambled to rewrite contracts and revise their listings to adjust to the brand new guidelines.
However a month later, the platform revealed a report stating that the drastic dip was short-lived. By the tip of June, each day stock on the positioning had elevated greater than 4 p.c because the starting of the month, an uptick that was solely barely decrease than the change throughout the identical time interval final yr.
Nonetheless, rental listings on the portal declined yearly for every month because the FARE Act handed, in accordance with knowledge from StreetEasy. Stock fell 6 p.c in July, 8 p.c in August, 6 p.c in September and seven p.c in October.
Nevertheless, the decreases in stock are possible the results of a number of components, not simply the brand new regulation.
“Whereas the FARE Act might have had some affect, the mix of low provide and excessive demand is what’s primarily driving these developments that now we have seen at play for a number of years,” stated StreetEasy senior economist Kenny Lee.
Competitors for residences has been rising for the final two years, Lee added, as extra corporations known as their staff again to work and better mortgage charges stored some potential house patrons within the rental market.
However on REBNY’s residential itemizing service, the declines following the FARE Act are extra pronounced. Information from the commerce group reveals stock dropped 12 p.c year-over-year in June, adopted by declines of 16 p.c, 20 p.c, 23 p.c and 32 p.c in every of the months after.
Final October, greater than 2,000 listings for residences in Manhattan hit the RLS, however final month, that quantity dropped to lower than 500, in accordance with UrbanDigs co-founder John Walkup.
“I don’t know the place that quantity goes,” stated Walkup. “They’re nonetheless being listed for hire someplace, in some way,” he added, referring to different itemizing web sites.
Walkup added that the decline is probably going extra pronounced as a result of the RLS solely captures properties marketed by brokers with unique agreements with landlords, that are possible in shorter provide now that landlords are answerable for paying them. Consequently, the residences obtainable on the RLS skew towards the upper finish of the rental market, the place landlords are higher in a position to take up the price of hiring an agent bc of the hire cost.
However each components have made it powerful for somebody like Walkup, whose firm depends on knowledge from the RLS, to make heads or tails of the rental market.
“As well-intended as [the law] was, it has thrown plenty of confusion into the ranks,” Walkup stated. “I can’t let you know if it’s cheaper to hire an condo, however I can let you know that for those who’re renting an condo in Manhattan . . . the face values are so much increased than they have been a yr in the past.”
Following the passage of the FARE Act, median rents rose, although not dramatically, on a month-to-month foundation, in accordance with an evaluation of StreetEasy knowledge by The Actual Deal. In June 2025, the median hire for listings on the itemizing platform was $4,000, a 2.6 p.c enhance from the earlier month and a 5.2 p.c leap yr over yr. The speed elevated one other .7 p.c in July, representing a 6 p.c enhance from the earlier yr.
The median charge stayed flat the following month and decreased .8 p.c in September (nonetheless 7.2 p.c increased than September 2024) and dropped one other 1.1 p.c in October. At $3,950, the median hire in October 2025 was 8.2 p.c increased than the identical month final yr.
“With emptiness charges anticipated to remain low, the tempo of hire development will keep elevated this yr and subsequent,” stated StreetEasy’s Lee.
Brokerage enterprise
Whereas the controversy over how the FARE Act will affect renters’ wallets continues, it has change into clear that the pie has shrunk for brokerages and brokers.
“A whole lot of the open itemizing, tenant rep brokers, their enterprise has actually suffered because of the FARE Act,” Residing New York co-founder Devin Someck stated. Open listings, by which a number of brokerages have been signed as much as present the identical rental unit, typically got here with the tenant protecting the dealer’s price, a apply prohibited below the FARE Act.
Someck, whose agency works as each a landlord rep and property supervisor, stated that he’s seen a swell of brokers “looking for a type of refuge” at this agency due to its sturdy landlord relationships.
He stated his portfolio, which was cut up between listings the place the proprietor pays and the tenant pays, now falls solely below the proprietor pays class because of the regulation. He added that he’s seen bigger retailers pull again from the leasing enterprise as revenue margins have narrowed because of landlords scaling again their fee funds.
On the similar time, leasing brokers have additionally seen their fee volumes endure as landlords extra aggressively pursue renewals relatively than pay out dealer charges, in accordance with Someck.
Jennifer Nobis, an agent with Bond New York, stated that she nonetheless has landlord purchasers who’re holding models off the market, not sure if they are going to attempt to hire out the residences themselves or promote as an alternative.
“For smaller landlords, the margin isn’t there,” she stated.
That applies doubly to rent-stabilized models, which have already been struggling after the passage of the 2019 Housing Stability and Tenant Safety Act took away most of the levers landlords might pull to extend rents of their rent-stabilized properties, in accordance with Bohemia Realty CEO Sarah Saltzberg.
“The house owners which can be shedding cash throughout the board on this asset sort are definitely not seeking to spend cash that they don’t need to,” she stated. “So if they will save a one-month dealer price, they are going to, they usually’ll simply say, ‘Discover a option to get me a tenant one other means.’ ”
Saltzberg says that she had already shifted her brokerage enterprise away from rent-stabilized properties after 2019, however that the FARE Act additional drove her to concentrate on unique landlord relationships.
“Any open listings that we labored on, or restricted listings, it’s nearly unimaginable to service these listings, as a result of how do you let folks find out about them,” Saltzberg stated.
It has additionally meant that she will be able to’t use her store as a coaching floor for up-and-coming brokers who used to have the ability to minimize their tooth on open listings, admitting that her agency has shrunk as she’s reoriented hiring in direction of skilled brokers that may keep helpful landlord connections.
“The outdated rule was, you’d have 20 p.c of your brokers making 80 p.c of the income,” Saltzberg stated. “Now now we have a smaller staff, however nearly each single particular person is making actual cash.”
Authorized combat
REBNY wasted no time submitting a authorized problem to the FARE Act.
One month after its passage, the commerce group filed a lawsuit in federal courtroom, alleging, amongst different issues, that the regulation violates the First Modification rights of brokers and landlords as a result of it discourages the publishing of rental listings. Underneath the FARE Act, a dealer who advertises a rental is assumed to have been employed by the owner.
Town, which is the goal of the lawsuit, maintains that the regulation doesn’t “bar the publication of something by anybody,” however units floor guidelines for listings revealed with the blessing of a landlord.
Simply in the future earlier than the regulation went into impact, Decide Ronnie Abrams delivered a significant blow to the group: Not solely did she refuse to pause the brand new guidelines, however she dismissed a majority of REBNY’s claims.
She threw out the First Modification declare and one other that the FARE Act is preempted by state regulation. REBNY’s allegation that the regulation defies the Contract Clause survived, although Abrams forged doubt on the declare outweighing the regulation’s “vital and bonafide public function.”
Abrams additionally denied REBNY’s subsequent request to halt the regulation whereas it pursued an enchantment.
REBNY appealed to the Second Circuit, which additionally rejected its request to pause the FARE Act. The group is ready for a call on its enchantment of Abrams’ dismissal of the First Modification declare.
In courtroom filings, the town has argued that reversing the regulation at this level would “create chaos.”
REBNY has lengthy held that the regulation is dangerous for each brokers and tenants. For the latter, the group has warned that the regulation would lead to fewer public listings and drive up rents.
“The longer this regulation is in impact, the longer customers and house owners are going to be adversely affected,” stated Carl Hum, vice chairman and common counsel at REBNY.
Hum stated brokers are nonetheless navigating the regulation’s grey areas, together with what constitutes conditioning rental of a unit on hiring a dealer, which is barred below the FARE Act. Twin company — the place a dealer represents a tenant and a landlord — continues to be permitted, however a dealer can’t publish an inventory on behalf of a landlord after which gather a price from the tenant who leases the condo marketed.
What’s subsequent
If the Second Circuit upholds the decrease courtroom’s dismissal of REBNY’s claims, the commerce group might petition the U.S. Supreme Court docket to take up the case. The nation’s highest courtroom receives, on common, between 7,000 and eight,000 petitions annually however solely hears about 80 circumstances.
The group might additionally search legislative modifications, although it appears unlikely that there can be a lot urge for food to take action below the Metropolis Council or new mayoral administration.
Brooklyn Council member Chi Ossé, the FARE Act’s lead sponsor, isn’t involved in regards to the case.
“They already misplaced once we handed this regulation, they usually’ve misplaced in courtroom at each flip since,” Ossé stated in an e mail. “We’ve crushed them as soon as, and we’ll beat them once more.”
He stated the FARE Act shifted energy again to tenants when negotiating lease renewals with their landlord. Tenants sometimes paid 15 p.c of the annual price of hire to the dealer, including hundreds of {dollars} to the price of transferring.
“Earlier than the FARE Act, tenants at lease renewal confronted two choices: keep and swallow the brand new hire or go away and take an enormous hit in upfront prices,” he stated. “With the tip of pressured dealer charges, bargaining energy is now within the arms of tenants at renewal, and that shift will put downward stress on rents throughout the town.”
Ossé stated he’s assured that Mayor-elect Zohran Mamdani will assist strengthen the regulation and ramp up enforcement. The Division of Client and Employee Safety has acquired 1,125 complaints since June 11, in accordance with Brick Underground. Ossé stated that almost all of those complaints didn’t embrace sufficient data for metropolis officers to take motion and believes the Metropolis Council might assist educate tenants about what sort of proof they should current to pursue claims.
“Our job is to assist them flip these stories into precise outcomes so each landlord and dealer who breaks the regulation is held absolutely accountable,” he stated.
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