One year later, here’s how the FARE Act… has fared.
Thursday marks one year since the City Council approved the Fairness in Apartment Rental Expenses Act, which mandates that whoever hires a rental broker is responsible for paying said broker.
What constitutes “hires” has been a major point of contention. The law says if an agent publishes a listing with a landlord’s blessing, that agent can’t collect their fee from a tenant. The Real Estate Board of New York says this violates the First Amendment because it discourages a certain class of people (agents) from expressing a specific type of speech (in this case, listings).
The Council approved the measure on Nov. 13, 2024. The bill became law the following month when the mayor declined to sign it (the measure passed with a veto-proof majority). The law’s rules went into effect June 11.
Given this first anniversary, my colleagues and I put together an overview of how the law has panned out so far.
Here’s the cheatsheet version:
Inventory: Rental listings on StreetEasy have dropped year over year every month since the FARE Act went into effect. Median rent prices have also increased, more on a year-over-year basis than month-to-month. These shifts probably can’t be entirely blamed on the FARE Act. Lack of supply and high demand are major factors.
Brokerage: Agents are still adjusting to the new landscape. Notably, some are cutting rent-stabilized apartments out of their business entirely.
Legal challenge: REBNY’s lawsuit is ongoing. The trade group is waiting on a decision on its appeal to the Second Circuit.
What’s next: Council member Chi Ossé says the law has given tenants more leverage in lease renewal negotiations, freeing them from the threat of paying thousands of dollars upfront if they move. He’s confident that the future Mamdani administration will work to ramp up enforcement of the law, and said the City Council needs to help educate tenants on how to best document and prove violations.
Of course, the law has only been active for five months. We’ll have more to report as the law continues to reshape the city’s rental market.
What we’re thinking about: Who is your pick for the next City Council speaker? Send a note to kathryn@therealdeal.com.
A thing we’ve learned: One year ago, I wrote about Council member Chi Ossé’s use of TikTok to mobilize more people to back the FARE Act. At the time, I also noted that he said he used ChatGPT to come up with the FARE Act’s name, though I wasn’t sure if it was a joke. A spokesperson for the Council member confirmed this week that it was, indeed, a joke. You never know!
Elsewhere in New York…
— Mayor Eric Adams quietly designated the Elizabeth Street Garden as city parkland, in a move that could complicate Mayor-elect Zohran Mamdani’s pledge to move forward with affordable housing on the site, Gothamist reports. Development of city parkland requires state legislation.
— Attorneys for New York have agreed to delay implementation of the state’s law banning natural gas and heating oil equipment in new construction, the Times Union reports. The All-Electric Buildings Act was slated to go into effect in January, but the attorneys agreed to pause the new rules until the Second Circuit U.S. Court of Appeals rules on a lawsuit challenging the law.
— Jack Schlossberg, the grandson of John F. Kennedy, will run for Rep. Jerrold Nadler’s seat, the New York Times reports. Several others are already vying to represent New York’s 12th District, including Assembly member Micah Lasher.
Closing Time
Residential: The top residential deal recorded Wednesday was $47.5 million for a 7,074-square-foot, sponsor-sale condominium unit at Central Park Tower. Extell Marketing Group had the listing.
Commercial: The top commercial deal recorded was $93.9 million for two of three parts of 425 Westchester Avenue in Woodstock in the Bronx. Unit 1 consists of 97,381 square feet and Unit 2 has 35,612 square feet. The mixed-use project was developed by Starwood Capital and AB Capstone.
New to the Market: The highest price for a residential property hitting the market was $6.25 million for a 2,634-square-foot condo unit at 161 Hudson Street in Tribeca. Danny Davis, Lisa Davis and Lisa Balbeuna with Corcoran have the listing. The condo last traded for $2.8 million in 2010.
Breaking Ground: The largest new building permit filed was for a proposed 32,505-square-foot, six-story residential building with affordable housing at 720 East 187th Street in Belmont. John Backos filed the permit on behalf of Doug Pelinkovic.
— Matthew Elo