LEGISLATIVE AFFAIRS: Realtors Come Out in Force to Oppose Broker’s Fee Cap in New York City
Philip Weiden | July 2019
There is currently a proposal before the New York City Council (Intro 1423) that would cap Realtor’s apartment rental fees at one month’s rent. A hearing was held on the bill on June 27th at City Hall where hundreds of Realtors and real estate practitioners turned out in opposition to the bill.
The cap on a broker’s fee of one month’s rent would essentially put an income cap on how much a real estate practitioner could make conducting their business. While the goal of the legislation to make the New York City rental market more affordable is laudable, this bill does not do that. Building owners that use rental agents will simply just raise rental prices for no-fee apartments if they have to show the apartment to prospective tenants themselves.
Among those who testified in opposition to the proposal included Secretary Treasurer of the New York State Association of Realtors Dave Legaz, Hudson Gateway Association of Realtors Treasurer Irene Guanill Elukowich and Melissa Gomez from the Long Island Board of Realtors. All made the point that the New York City’s and New York State’s rent control laws will have a negative effect on real estate values and the broker fee cap proposal would only make matters worse in New York City. The Real Estate Board of New York also testified strongly against the proposed legislation.
Realtors also testified the bill would force them to possibly forego paying bills and put them in extreme financial stress.
“Please keep in mind that the vast majority of rental agents make less than $50,000 per year—and are tenants themselves,” Citi Habitats president Gary Malin said at the hearing, according to a report in the Real Deal. “These are not the brokers selling multimillion-dollar penthouses on cable TV. These are hard-working, middle-class people, many with families.”
The real estate community did provide the City Council some options to make New York more affordable, such as building more rental housing, increasing vouchers so they cover higher living expenses and creating affordable housing programs that allow people to buy condos or co-ops and therefore build long term wealth rather than having all of their income go towards rent.
Other Realtors suggested fixing the New York City property tax assessment system in which property owners are unfairly taxed at different levels with someone paying more in Queens for the condo or co-op than for a comparable residence in Brooklyn. This has been a long running issue in the city that has yet to be reformed.
HGAR’s Guanill Elukowich, who participated in the hearing at City Hall, told Real Estate In-Depth, “I think that we made an impact and the Councilmen heard a different side and are willing to listen and evaluate.”
While she noted that the City Hall hearing was positive, she cautioned, “we still have to be vigilant” in making sure the real estate industry’s message continues to be heard by the City Council.
HGAR strongly opposes this legislation and urges its members to contact Council Members Keith Powers and Carlina Rivera who are the main sponsors of the bill.
At press time it is not known when the City Council will once again take up the measure.