NYC's Rental Industry: Who Will Survive the FARE Act Fallout?
With the broker fee ban causing chaos in the rental market, new players are trying to take advantage.
Since the FARE Act went into effect, New York City's rental industry has been in turmoil. The ban on broker fees has led to a decrease in listings on StreetEasy, a rise in rent prices, and a drop in recorded rentals. In this time of uncertainty, new players have emerged to capitalize on the chaos.
Among these newcomers are discount brokerages that cater to landlords and tenants. These firms, such as Blueground and Doorkee, are offering discounted or free services in response to the broker fee ban. While some brokers have expressed skepticism about these new players, others see an opportunity to adapt to the changing market.
"There's always opportunity in chaos," said Justin D'Silva, a broker at Compass. "It's up to us to adapt and find new ways to serve our clients." However, some brokers worry that these new players may not have the same level of expertise and knowledge as traditional brokers, potentially leading to negative consequences for tenants.
The Real Estate Board of New York (REBNY) is also taking action in response to the FARE Act. The organization has filed a lawsuit against the state, arguing that the ban on broker fees is unconstitutional. "We believe that the FARE Act is misguided and will ultimately hurt tenants," said James Whelan, president of REBNY.
Meanwhile, the New York Department of State has issued guidance stating that brokers can still collect fees from landlords, as long as they have a written agreement with the landlord and disclose the fee to the tenant. However, this guidance has been met with criticism from tenant advocacy groups, who argue that it undermines the intent of the FARE Act.
Ultimately