When Despina Misetzis, a 33-year-old Brooklyn resident began her apartment hunt in January, she quickly realized things were different from her first search in 2015.
Misetzis, who returned to New York last fall after living in Ecuador, joined thousands of apartment hunters struggling to find housing amid skyrocketing rents and broker fees in the thousands that make moving all the more expensive. She ended up paying a $2,400 broker fee on a one-bedroom, $1,600-a-month apartment in Brooklyn.
But with the rising popularity of online marketplaces like StreetEasy and Nooklyn, Misetzis and other prospective tenants are finding apartments on their own, without the help of brokers who are traditionally hired to scour listings and present options to their clients.
Although renters, in most cases, don’t hire their brokers, they’re finding themselves footing the bill — and often being required to pay broker commissions to secure housing — without ever meeting them, several apartment hunters told Gothamist.
We’re just putting the responsibility on whomever hires the broker.
“Moving is expensive enough,” Misetzis said, who spent nearly $10,000 in all to move into her new place. “It really bites into your budget.”
Efforts to cap broker fees have sputtered in recent years, and a state-level bill introduced in Albany last fall failed to gain steam. But a new measure in the City Council is reigniting the prospects of reducing broker costs to tenants, which usually range from a month of rent to roughly 15% of the annual rent — but are sometimes even higher.
City Councilmember Chi Ossé introduced a bill that he says will be different from its predecessors.
“I am aware of the history and the past attempts of taking a stab at this issue,” Ossé told Gothamist. “But in a way, this bill is taking a different approach.”
Unlike a 2019 proposal from Councilmember Keith Powers that capped broker fees to one month’s rent, Ossé’s measure would require whoever hires the broker — whether a tenant or a landlord — to pay their fee.
“We’re not eliminating the broker fee at all,” he said. “We’re just putting the responsibility on whomever hires the broker. Just like every other service — where if an individual hires [someone], they pay the price.”
For landlords and brokers, Ossé’s approach warrants similar criticism to past attempts.
Sam Spokony, a spokesperson for the highly influential Real Estate Board of New York, said the organization opposes Ossé’s efforts.
“We believe it’s not going to achieve the goals the councilmember stated and will create a number of new challenges,” Spokony said.
Douglas Wagner, director of brokerage services at real estate firm Bond New York, said those challenges include more expensive lease renewals, noting that landlords will pass the costs back onto tenants through rents hikes.
Real estate agent Adrienne Roberson acknowledged that tenants do face a problem with liquidity requirements, or the availability of cash on hand needed to secure an apartment.
You’re just paying someone to open a door for you to a listing that you sent them.
But for Ossé, redistributing the fee across a year lease instead of a lump sum payment up front “is an easier obstacle to overcome for a tenant in New York City rather than paying a 15% annual fee on top of first month’s rent and a security deposit.”
A transparent market
Sonia Gilbukh, an expert on real estate and assistant professor at Baruch College, said she expects Ossé’s bill to be a win for tenants, a wash for landlords and a loss for brokers.
But his bill won’t necessarily make things cheaper — tenants may be worse off when they renegotiate a lease at the end of the year because their leases are “pegged” to a higher amount, Gilbukh said.
Ossé’s bill “makes the market more transparent and more efficient,” Gilbukh said. “That’s the number-one reason why I think it’s good legislation.”
For example, tenants will have more transparency when comparing the costs of apartments with fewer hidden fees, she added. That way, they’ll be more able to select the best apartment for their dollars.
Benton McClintock took to TikTok to complain about all of the fees associated with moving. The 25-year-old told Gothamist he paid a $9,000 broker fee for a $5,500-a-month three-bedroom apartment in Lower Manhattan.
“You’re just paying someone to open a door for you to a listing that you sent them,” McClintock told Gothamist. “Why would anyone want to pay that?”
And it’s not just apartment hunters who are complaining about the exorbitant cost.
On Thursday, the city’s Department of Investigation issued a report saying that the city’s Department of Social Services paid tens of thousands of dollars in broker fees to place homeless clients in private housing to agents who are affiliated with specific landlords, a violation of DSS policy.
While the report found that DSS paid more than $151 million in broker fees between 2010 and 2021, the investigative agency said its “inquiry does not provide a basis to determine (or even reliably estimate) how much of that total amount was paid to brokers affiliated with the landlords in violation of DSS policies,” noting that sample placements DOI reviewed all showed that the broker and landlord were affiliated.
The Department of State, which licenses real estate agents, received two complaints over broker fees, according to spokesperson Jade Kraft. The agency is now investigating the alleged excessive commissions, Kraft said.
And the red-hot housing market isn’t just making brokers more costly — it’s also giving them less time to spend per tenant.
“I had one broker put 25 strangers in a group chat with each other to come see an apartment,” Misetzis recalled.
And with dozens of prospective tenants seeking out each apartment, brokers would sometimes abruptly stop communicating with Misetzis about apartments after beginning the viewing process.
“It’s like ghosting season for realtors,” she said.
