The New York real estate industry is gearing up for its next fight. This time, brokers are at the forefront, vehemently opposing a proposed law that would alter their typical commission payment on rental transactions, and the industry’s top trade group is planning a show of force in support.
The City Council has scheduled a public hearing for a series of bills that would reconfigure rental broker fees for June 27 at 1 p.m. The proposed laws include the controversial Intro 1423, which would curtail the amount a renter can be forced to pay a broker who’s working for a landlord.
The initial date for the public hearing was Monday, June 11, but it was canceled the night prior without explanation.
Mid-afternoon on Tuesday, hours after the hearing was originally scheduled to occur, the City Council issued a statement: “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.”
More than 100 brokers had been expected to attend. Sarah Saltzberg, the co-founder of Upper Manhattan brokerage Bohemia Realty, shut down her company’s office for the occasion. She described the situation at the time as “disrespectful.”
“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,” she said. “I am hopeful that it will actually get people more fired up because it just feels so punishing.”
Ahead of the rescheduled hearing, the Real Estate Board of New York is planning a rally on the steps of City Hall, The Real Deal has learned.
“We appreciate the opportunity for the residential brokerage community to make it clear to our local government that capping the commissions of hardworking residential agents is a terrible idea,” said John Banks, REBNY president, in a statement.
Intro 1423 is the most controversial bill among the six that will be considered. Brokers have called it “anti-American” and said that, if it becomes law, it will throw the market into “chaos.”
The prime sponsor, Council member Keith Powers, previously told The Real Deal that “the legislation has been and remains about making it more affordable for New Yorkers to rent an apartment by protecting tenants in these costly transactions.”
The bill was introduced in February and initially proposed capping the amount a renter could pay a broker for their services to the value of one month’s rent. In the weeks that followed, fierce backlash from real estate interests led to three sponsors withdrawing their support. Meanwhile, Powers clarified his intention was to shift the burden of paying for a landlord’s broker away from the renter, who traditionally foots the bill, and not limit brokers’ incomes.