Brokers fumed over guidance earlier this year which temporarily put apartment fees in limbo, but now the share of no-fee rentals are surging.
No-fee listings made up 75 to 85 percent of all listings in Manhattan and Brooklyn in August, the New York Times reported, up from 25 percent of listings in January. The analysis was conducted by TextLuke.com, an AI-based service that helps consumers find apartments.
The greater share of no-fee listings comes as Manhattan has seen three straight months of record vacancy, meaning landlords may be willing to cut a deal in order to get an apartment rented.
In Brooklyn, the trendy neighborhoods of Red Hook, Park Slope, Crown Heights and Bushwick also saw more no-fee listings. The share of no-fee apartments grew in those areas to 80 percent in August from 58 percent in January.
A Douglas Elliman report found that in July, Manhattan saw the largest annual rent decline in nine years — and that was accompanied with landlords increasing concessions. That month, nearly half of all new leases included freebies for renters, up from 30 percent 12 months earlier. Concessions in Brooklyn remained stable.
Broker fees are typically 15 percent of an apartment’s annual rent, and the cost is covered by the tenant. New York’s Department of State issued guidance in January seeking to turn that practice on its head by transferring the fees to landlords. The announcement shook the real estate industry, but the upheaval was short lived: The industry obtained a restraining order from a New York judge to temporarily block the broker-fee ban.
The court date for the real estate industry’s challenge of the interpretation is scheduled for October.
[NYT] — Georgia Kromrei