Good morning, Chair Menin and thank you for holding this hearing today and thank you to Council Member Ossé for introducing this important and common-sense bill.
No one here, not even the landlords, needs me to tell you that we are experiencing a housing crisis. New York City’s vacancy rate is the lowest it’s been since 1968. Fewer apartments are available across all rent levels, meaning it’s especially difficult right now for low- and moderate-income New Yorkers to find and secure housing.
Meanwhile, market rents have increased about 17% since 2020 and are continuing to go up. According to Apartments.com, the average rent for a one-bedroom apartment in Brooklyn is $2,693 per month. By Federal affordability standards, someone would need to make over $100,000 per year to afford that apartment. It is also becoming more difficult to qualify for affordable housing. The Area Median Income for New York City – the metric used to decide who qualifies – has increased 30% since 2021, yet I think we would be hard pressed to find any renter whose wages have increased 30% in that same amount of time. It is no surprise that the families leaving the city at the fastest rate are people of color who make between $32,000-$65,000 per year, according to the New York Times.
With more people looking for market-rate housing and fewer units available, it is critical for us to address the barrier to entry that broker fees create. You’ve all heard the horror stories: a $15,000 or $20,000 fee to secure a rent-regulated unit, an exorbitant fee paid to a broker that the tenant never even met. These stories are unacceptable, but even the average broker fee can mean the difference between a family being able to secure housing in this city and not.
Back to that “average” $2,693 per month apartment in Brooklyn. With first month’s rent, last month’s rent, and an “average” security deposit of 15% of the yearly rent, a single person or couple would have to pay more than $10,000 up front just to secure that apartment. That’s a huge amount, even if the monthly rent would be affordable to them. And because White households are more likely than Black and Latino households to have liquid assets such as savings accounts, broker fees aren’t just a barrier, they are a fair housing issue.
Again, this bill is just common sense. While some may claim that this will negatively impact the job market for brokers, the truth is that many no-fee apartments already operate this way, with landlords employing brokers. And prospective tenants will still be able to enlist the fees of a broker if they choose to do so. In every other industry, if you want a service, you pay for that service. There’s no reason real estate should be any different. Making this simple change will increase housing access and choice for tenants at all income levels and help keep our city vibrant and diverse.
Thank you again for holding this hearing. I urge the Council to move quickly to pass Intro 360.