Who really pays? Tenant broker fees
By : J. David Chapman/June 20, 2025
The government is once again meddling in the landlord-tenant relationship. Helping renters is a noble goal—especially in high-cost markets like New York City. But good intentions don’t always lead to good outcomes and sometimes lead to unintended consequences.
On June 11, New York enacted the FARE Act (Fairness in Apartment Rental Expenses), banning landlords from passing broker fees on to tenants. These fees—often thousands of dollars upfront—have long been a hurdle for renters. According to StreetEasy, the law slashes average move-in costs by more than $5,400. Sounds like a win, right?
Maybe not.
The issue isn’t landlord greed—it’s economics. Landlords operate in a market, and when the government imposes new costs, those costs are passed along to consumers. In this case, many landlords are raising rents to offset the broker fees they’re now required to cover. One Brooklyn listing jumped $495 a month overnight—more than erasing the tenant’s savings within a year.
So what’s really been gained? In a city with just 1.4% vacancy and median two-bedroom rents already over $5,500, tenants may save on the front end but pay more in the long run.
And this isn’t just a New York story. Across the country, lawmakers are piling on regulations to “protect tenants,” but doing so by adding burdens on landlords. If affordability is the goal, the solution is more housing—zoning reform, streamlined permitting, and wider approval of accessory dwelling units (ADUs). We should be supporting, encouraging, and incentivizing the people who provide housing, not punishing them.
What makes New York’s move even more contradictory is that, at the same time, the U.S. Department of Justice is trying to prevent home sellers from paying buyer agents—arguing that eliminating those fees will make housing more affordable. The logic behind the FARE Act runs contrary to that effort.
It seems some in government would be happy to see real estate brokers disappear altogether. That’s a mistake. Tenant reps and buyer representatives—professionals who help renters and buyers navigate a complex market—play a vital role. Pretending their services are free just because you’ve shifted who pays is political theater.
The bill always comes due. The only question is whether it’s paid honestly and upfront—or quietly buried in rising rents and purchase prices.
J. David Chapman, Ph.D., is chair of finance & professor of real estate at The University of Central Oklahoma (jchapman7@uco.edu).