May 30, 2025
A major shakeup could be on the way for New York City’s rental market — and as a licensed real estate professional, it’s something I’m keeping a very close eye on.
The Real Estate Board of New York (REBNY) and other industry groups are taking the City to federal court, asking a judge to block a new law scheduled to go into effect on June 11.
This law would require landlords — not tenants — to pay broker fees when brokers are hired to market their rental properties.
If enforced, it could dramatically change how we operate in NYC, one of the few cities where broker fees have traditionally been passed onto tenants, even if they didn’t hire the broker directly.
The argument from REBNY and the New York State Association of Realtors is simple: this law will drive up overall rents, make it harder to manage rent-stabilized apartments, and create new financial pressures that could push smaller landlords — and brokers — out of the market.
They also argue it violates constitutional rights, like free speech and the ability to contract privately between landlords and brokers.
On the other side, the City is saying this move will help renters, especially low- and middle-income New Yorkers, by eliminating a huge upfront cost that can often run into the tens of thousands.
They claim that broker fees — which can average close to $13,000 to secure an apartment — are a major reason many families struggle to move into better housing.
From a realtor’s lens, this change could mean serious adjustments to our business models.
If tenants aren’t paying broker fees, we’d have to rely solely on landlord contracts — and competition for those could be fierce. Many smaller brokerage firms might not survive.
We’ve seen a similar story before. A brief broker fee ban was introduced in early 2020, just before the pandemic hit.
It was struck down later, but in the few months it was in place, it created confusion and uncertainty across the rental market.
Regardless of where you stand, one thing is clear: this could be a fundamental shift in how New York’s rental real estate operates.
With median rents already pushing $4,495 in Manhattan, adding more landlord-side costs will almost certainly ripple through to tenants — just in a different form.
As of now, Judge Ronnie Abrams hasn’t issued a decision. But all of us in the real estate community need to stay ready — because June 11 is coming fast.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
