Last June, on a sweaty summer evening, in our 550-square-foot Brooklyn apartment filled to the brim with towers of stacked moving boxes, my partner and I made a final assessment of what our move to New York had officially brought. cost us. We might as well have bought a new car.

We had left Chicago, renting a U-Haul that John drove across the country while I followed him in our beat-up 2013 Ford Escape, our two dogs, and lots of plants. The truck, including gas, costs about $1,000. We hired movers in New York to help us unload the truck; their services cost $550.

$1,550 for a move abroad? Not great. This is not something we would still be recovering from financially, over a year later. But moving to New York and getting an apartment in New York wiped out our savings. By the time we got the keys to the apartment, we had spent almost $13,000.

For our two-bedroom apartment in Crown Heights, Brooklyn, we were charged $10,884 in collective fees and deposits. This included the first month’s rent ($2,800), a one-month security deposit ($2,800) and a broker’s fee of 15% of our annual rent, or $5,191. Indeed, tenants in New York have always been held responsible for paying the broker the landlord hired to find tenants.

Until recently, New York was one of two cities that required tenants to pay for these services; the other is Boston. Typically, these broker fees vary between 10% and 15% of a tenant’s annual rent; in a city where the average monthly rent is currently $3,898 per monthtenants often had to pay several thousand dollars just to move.

For an apartment priced at $3,898 per month, a 10% broker fee would come to $4,667, while a 15% fee would cost the tenant $7,016. High fees can trap tenants earning lower or middle wages in apartments for years, unable to afford the cost of housing. $18,000 Cartier gold bracelet simply to move. (It’s worth noting that you can’t charge brokerage fees to credit: tenants generally have to wire the money directly to the broker. If you don’t have that money on hand, you can’t move.)

At a City Council hearing on a bill to ban the brokerage fee structure in New York, Councilman Chi Ossé described the fee structure as “a system of exploitation that exists virtually nowhere elsewhere “. In Boston, legislation that would have banned this practice failed to move forward earlier this year in the Massachusetts State Senate.

But the New York City Council today approved the Fair Apartment Rental Expenses (FARE) Act. The bill, first introduced by Ossé in 2023, requires that a broker hired by a landlord — or a broker who posts the rental property listing — be paid by the landlord. It passed 42-8, with more votes than needed to achieve a veto-proof majority.

Many tenants and housing advocacy groups, including Take the road to New Yorkthat of New York Working Families DayTHE Community Service Corporation of New York and the Legal Aid Societysupported the bill. And, generally speaking, New York brokers are not fans of the FARE Act, with many saying broker fees are high. transparent And negotiable.

Brokers claim that removing brokerage fees will actually result in lead to higher rents because landlords will refuse to pay brokers and include them in the rent – ​​for example, increasing the rent by $400 per month, to spread the $5,000 fee over a 12-month lease. “Owners cannot pay fees. It’s not in their budget and they won’t do it,” real estate broker said at protest hundreds of real estate brokers at the town hall in June.

“We have some of the strongest protections for renters,” Whitney Hu, director of civic engagement and research at Churches United for Fair HousingSalon said. “At the same time, we have some of the most powerful counterforces imaginable. »

Michael Corley, a real estate broker who has worked in the city for more than 20 years, told Salon that requiring landlords to pay the brokers they hire would create a system that would benefit both tenants and landlords.

“They will pay a reasonable fee,” Corley said of most landlords in town. But those landlords could demand more from some brokers who Corley says have been able to take advantage of being guaranteed payment from tenants.

“I’ve told everyone I talk to in the brokerage world, ‘You have to establish a value proposition.’ And it’s going to be difficult at first, because you gave this away for free,” Corley said.

When combined with the first month’s rent and security deposit required in a city with some of the highest rents on the planet, broker fees make moving to New York a prohibitive luxury available to a select tier of renters having above average access to liquidity. . According to the Federal Reserve’s most recent 2022 Survey of Consumer Finances, the median balance in U.S. household savings accounts was $8,000. StreetEasy, the Zillow-owned listing site that accounts for up to 70% of New York and New Jersey’s rental market share, released a report in February that found New York City renters pay on average $10,454 upfront rental property fees: up 29% from pre-pandemic.

What types of tenants were able to bear these costs? Tenants with means or good credit (or, quite often, wealthy parents). When John and I moved to the city, we were relatively privileged renters compared to many others in Brooklyn, with remote tech jobs that allowed us to work safely throughout the pandemic and building up our savings to $13,000 – which ultimately financed the move. .

But the days when remote technological work translated into real stability are over; Two weeks after we moved to New York, John was laid off. Almost a year later, I was also laid off.

Our lease is up next June and we’re looking forward to moving to an apartment with a little more space for us and the two dogs we brought from Chicago (thank goodness we’re near a neighborhood park). We managed to save a few thousand dollars, but have since racked up nearly three times that amount in credit card debt (a reality not unlike that of dozens of our friends and peers across the city). If we had the option to end our lease tomorrow and move to a place with more space, we couldn’t. Like the average New Yorker, we simply don’t have the money to pay these brokerage fees.

Initially, some landlords might refuse to pay brokers, preferring to manage the entire rental process themselves. That won’t last long, Corley said.

“When they start getting sued for discrimination in fair housing and other things, which they will, because they have no idea what they’re doing, they’ll come back to us,” said Corley. He added: “The market will go through a correction phase, perhaps 12 to 18 months. But when all this is done, the environment will be much better for ethical practitioners, and everyone will disappear. »