It used to be that if you were looking to rent an apartment in New York City, there was a good chance you would have to pay a hefty broker fee, even if you found the apartment yourself online. 

It was one of just two cities in the U.S., along with Boston, where it was common for landlords to hire a broker to market their rental and require the new tenants to pay the fee, which was typically somewhere between an extra month’s rent and 15% of the annual rent. 

That, on top of first month’s rent and a security deposit, meant that tenants had to fork over nearly $13,000, on average, just to get the keys to a new apartment. 

Not anymore. Late last year, the New York City Council passed a law called the FARE Act requiring that whoever hires a broker be the one to pay them. So now, if a landlord hires a broker, they can no longer require the tenant to pay the broker fee. Massachusetts passed a similar law this summer. 

Just before the FARE Act went into effect in mid-June, Katharine Crawford’s landlord told her that he wouldn’t be renewing her lease, and would instead be selling her Brooklyn apartment — the one with the bay windows and great light that she had just rented a year before. Which meant she would need a new place. 

“I started looking shortly before the brokers fee was made illegal in June, and was looking at apartments during that week,” said Crawford, 37, who just moved to New York from Richmond, Virginia, last summer for a job.

She had been following the news, so knew the new law was about to go into effect, and was really hoping she wouldn’t have to pay a broker fee. Especially because she just paid one last year, more than $6,000, for the apartment she now had to move out of — in addition to first month’s rent and a security deposit. 

But she was a little worried about the warnings she’d read, from landlords and brokers, that requiring landlords to pay broker fees would just cause them to raise rents. 

“I talked to a broker, I think it was the day before the law changed, and he said, ‘You know, you should come see it tonight and pay the broker’s fee if you're interested, because the apartment is going to go from $3,000 to $4,000 overnight,’” Crawford said. 

At another place she looked at right after the law changed, a broker told her she could either still pay the fee, and they would just call it something else, or she could pay an extra $600 a month in rent. Right around then, she started noticing rents jump online, too.

“I got email updates on apartments I'd saved that some were going up $100, $300, $400, $600,” she said. “I think I saw one at $1,000. So, like, that was shocking.”

But it didn’t last. After a few days Crawford noticed many of those asking rents drop back down.

That is pretty much what data from the real estate website StreetEasy show, too. 

“The early data is sending me a clear message: Following the implementation of the FARE Act on June 11, the New York City rental market has been stable,” said Kenny Lee, senior economist at StreetEasy. 

There were some big spikes in asking rents that first week, and notably fewer listings, too, but it now looks like “that was a temporary blip,” he said, as landlords and brokers adjusted to the new law.

Year-over-year, asking rents are up a bit more than they were in the winter and spring, but Lee said that often happens in the summer in New York.

It has only been two months since the law changed, though, and Lee Solomon, a longtime broker in Brooklyn with Brown Harris Stevens, said, “how it's all going to play out in terms of the numbers, I think it's too early to say.” 

Solomon is also a landlord — she and her husband own and rent out seven apartments in Brooklyn. “There's a lot of fear now with landlords that, you know, will you be able to cover your costs,” she said.

Landlords are contending with lots of rising costs — property taxes, insurance, utilities, labor, maintenance — and now that they have to start covering broker fees, too, she thinks many will eventually raise rents to make the math work.  

“I don't think tenants are going to see any savings by this law in the long-term,” Solomon said. Nor does she think the law on broker fees does much to address the real problem with housing in New York City: There just isn’t enough of it. 

“We just need more housing stock so desperately in New York,” she said. “I hope that there's really a lot of thought and a lot of input from various stakeholders to make that happen.”

Kenny Lee at StreetEasy agreed the housing shortage is the root cause of the city’s affordability problem, and that “the new law is not a silver bullet.” 

But not having to pay a broker fee will reduce the upfront cost for renters, which “will be the biggest benefit,” he said. “Traditionally, renters with lower incomes tended to be more affected by high upfront costs for rentals. The FARE Act removed this upfront barrier and created a more even playing field for all renters of different income.”

When Katharine Crawford moved into her first Brooklyn apartment last summer, the one she’s now packing up, she had to pay more than $13,000 just to get the keys — first month’s rent, a security deposit, and a 15% broker fee — even though she found the place on her own on Zillow.

“It’s a lot,” she said. “I was thinking, I moved here, ‘Oh, well, if I stay even two years it gets better, three,’ but then it ended up being one year.”

The idea of having to pay a broker fee again so soon felt ridiculous.

“That's so cost prohibitive if you have to move every couple of years,” Crawford said. 

Luckily for her, she eventually found a new one-bedroom apartment she loved, a few days after the law went into effect. 

“I was so glad that I got the place that I did when I did,” she said, “because I didn't have to pay. That saved me more than $6,000.”

This time, she just had to write a check for first month’s rent, of about $3,500, and a security deposit to move in, which she did at the end of last month. And because the apartment was on the market for a couple of weeks, Crawford actually got a deal — she’ll be paying less than the original listing price.