City Council cancels public hearing on bills to reform rental fees at eleventh hour

City Council says it delayed the hearing because "renters and advocates" traveled to Albany on Tuesday ahead of the state rent regulation deadline

Council member Keith Powers is a prime sponsor of Intro 1423. His office did not immediately respond to request for comment.
Council member Keith Powers is a prime sponsor of Intro 1423. His office did not immediately respond to request for comment.

UPDATE Tuesday, June 11, 4:15 p.m.: At 5:44 p.m. Monday night, City Council members received an email notice that Tuesday’s public hearing on a series of bills to reform rental transactions was cancelled.

The public hearing scheduled to begin at 10 a.m. today was meant to address six bills related to the city’s rental market — the first one being Intro 1423, a controversial proposal to cap the amount a renter would pay to an agent hired by a building owner. (The bill originally proposed capping the amount a renter would pay regardless of who hired the agent.)

Sarah Saltzberg, the co-founder of Upper Manhattan brokerage Bohemia Realty, was headed to an event hosted by one of her agents when she heard about the cancellation from Reggie Thomas, the Real Estate Board of New York’s senior vice president of government affairs. REBNY at 7 p.m. sent out a notice to all its members informing them of the cancelled hearing.

“To cancel something so last minute is just for me further evidence that the City Council members really don’t understand what it takes to be a real estate agent in this city,” she said. “If it did have to be so last minute, at least tell us why.”

As of Tuesday morning, no reason was given for for the cancellation. On Tuesday afternoon, Jennifer Fermino, City Council’s communications director released a statement to The Real Deal: “It is not unusual for the City Council to postpone a hearing. We postponed the hearing because tenants should not have to choose between local and state legislation. Renters and advocates traveled today to Albany to fight for stronger rent laws. Their voices should be a part of this debate, and this is why we are working to find a date to reschedule this public hearing.”

Saltzberg, who sits on REBNY’s residential brokerage board of directors, was planning to speak in opposition to Intro 1423 on Tuesday morning and expected to have between 50 to 70 agents from her 150-person firm in attendance. To encourage agents to come, she had planned to shut down both of Bohemia’s offices until 2 p.m. on Tuesday.

“It sort of adds insult to injury,” she said. “For [agents] to give up a day, it’s not just a vacation for them. They’ve actually lost potential income and it’s real.”

“I find it very disrespectful,” she added.

The legislation is meant to address affordability concerns facing New Yorkers, Council member Keith Powers, the prime sponsor of Intro 1423, has previously said. His office did not respond to a request for comment.

Sign Up for the undefined Newsletter

If the bill becomes law, landlords could only have tenants cover one month’s rent, or roughly 8 percent, of their rental broker’s typical 15 percent commission of the annual rent. At the moment, renters often pay the landlord’s entire broker fee, often in addition to the first month’s rent and a security deposit, which are commonly 1.5 to two times the monthly rent. For a Manhattan apartment with the median rental price for the borough — $3,300, according to Douglas Elliman — that means paying $14,190 upfront.

The real estate industry has said that Intro 1423 would be devastating, and may even put some brokers out of business. One brokerage exec previously told The Real Deal that the legislation would end up hurting tenants, too: landlords may end up increasing rents to account for being unable to pass the cost of the broker’s services onto the renter.

Gary Malin, president of Citi Habitats, was also scheduled to speak at the hearing. He found out about the cancellation around 6 p.m. from an email. He was expecting at least 50 of his agents to attend.

“There’s already frustration regarding the intent of the bill, the implications of the bill and then to do this,” he said. “A lot of these people changed their entire schedules, cancelled appointments, did everything they could to sort of accommodate the schedule.” Douglas Elliman’s head of rentals, Hal Gavzie, said 300 agents from his firm had confirmed their attendance.

Malin said he was advised Monday night that “certain people they expected… to attend the hearing couldn’t. And as a result they decided to defer the meeting.” He called it “strange.”

He said he assumed those who weren’t able to attend were “housing advocates” who supported the bills.

Both Saltzberg and Malin agreed that the cancellation wouldn’t stop real estate agents from showing up when it does get rescheduled.

“I am hopeful that it will actually get people more fired up because it just feels so punishing,” Saltzberg said.

Clarification: This story has been updated to clarify Gary Malin’s quote regarding why the meeting may have been cancelled and include comment from Douglas Elliman and New York City Council.