NYC Bans Broker Fees for Renters—But Landlords Are Hiking Rents Fast

These fees typically cost renters 10–15% of annual rent, but landlords are increasing rent to compensate.

Jordan B.
June 12, 2025

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Good morning. New York City just banned broker fees for renters in a major shift aimed at lowering upfront housing costs. But landlords are already pushing back, with rent hikes that could cancel out the savings.

Today’s issue is sponsored by Landing—improve occupancy without concessions.

🎙️ Season 3 of the No Cap kicks off with J.P. Morgan’s Tom Kennedy dropping bold market calls, Fed critiques, and must-hear 2025 investment insights.

Market Snapshot

S&P 500

GSPC

6,022.24

Pct Chg:
-0.23%

FTSE NAREIT

FNER

773.31

Pct Chg:
-0.49%

10Y Treasury

TNX

4.42%

Pct Chg:
+0.111

SOFR

30-DAY AVERAGE

4.34%

Pct Chg:
-0.00

*Data as of 06/10/2025 market close.

Fee Fallout

NYC Bans Broker Fees for Renters—But Landlords Are Hiking Rents Fast

A new law banning tenant-paid broker fees is meant to cut move-in costs, but some landlords are already offsetting that by jacking up rents overnight.

What happened: As of June 11, the FARE (Fairness in Apartment Rental Expenses) Act bans landlords from passing broker fees to renters—long a pricey hurdle in NYC leasing. StreetEasy estimates the move cuts average upfront costs by 41.8%, slashing them from $12,942 to $7,537—a savings of over $5,400 per lease.

Landlords strike back: While tenants save at signing, landlords aren’t eating the cost. Listings have already reflected hikes—one Park Slope unit jumped $495/month. StreetEasy’s data suggests rents in affected units rose 5.3%, just 0.7% above market averages—so far, not a dramatic spike, but a signal of what’s coming.

Zero slack: Vacancy in NYC sits at just 1.4%, and median two-bedroom rents top $5,560—highest in the nation. With demand sky-high, landlords hold the upper hand in setting prices, and there's little stopping them from quietly folding broker fees into future rents.

➥ THE TAKEAWAY

Who wins? StreetEasy and Zillow back the FARE Act but say it’s not enough. They’re calling for deeper fixes: zoning reform, ADU approvals, incentives for new development, and better fee transparency. Without more supply, affordability gains will be limited.

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✍️ Editor’s Picks

BTR bet: Institutional capital is pouring into BTR, reshaping the rental market with purpose-built, professionally managed communities. (sponsored)
Trophy demand: Manhattan’s prime office towers are leasing at a record pace, with availability plunging to 10.7%.
Capital shift: Investor sentiment is shifting from US to European real estate amid political uncertainty and stronger market stability.
Cap rate clarity: Investors are being urged to look beyond average cap rates and explore market-level nuances to better assess risk and uncover hidden opportunities.
Market strain: Despite strong early 2025 issuance, rising delinquencies, interest rates, and tariffs could stall CMBS growth in the second half of the year.
Experience economy: Ballers, a sports-focused social club, raised $20M to open 50+ locations, blending fitness, leisure, and dining into a modern urban country club model.

🏘️ MULTIFAMILY

Legal precedent: A federal appeals court ruled landlords can sue the US government for lost rent due to the pandemic-era eviction moratorium.
Income gap: NYC renters now need to earn over $161K annually to afford the average rent, which is 148% higher than the national average.
Fast track: Avenue Homes is planning a 49-unit, fully affordable project in North Hollywood using LA’s fast-track incentives.
AI advantage: Multifamily operators are using AI to boost lease-ups and rental revenue in a soft apartment market.
Deal closed: A local investor acquired two newly built apartment complexes in Fontana for $31M, capitalizing on rising demand in San Bernardino County.

🏭 Industrial

Data pullback: Digital Realty is scaling back a $104M Dallas data center upgrade, investing just $13M, prompting the city to revise its tax incentives and job requirements.
Tenant needed: SoftBank’s SB Energy is planning a $3B solar-powered data center in Central Texas, but must land a tenant before receiving local tax breaks.
Big deal: NorthPoint Development acquired the 1 MSF Las Vegas Logistics Center from Blackstone’s Link Logistics for $175M.

🏬 RETAIL

Margin squeeze: Designer Brands pulled its 2025 guidance after a rough Q1 marked by falling sales, a $17.4M net loss, and unexpectedly steep tariff costs.
Neighborhood appeal: Retailers are flocking to Chicago’s River North as new housing, diverse assets, and rising foot traffic drive a submarket resurgence.
Prime location: Asana Partners is listing a 21-building, mixed-use portfolio in Old Town Alexandria after investing $20M in renovations.

🏢 OFFICE

WeWork 2.0: One year after emerging from Chapter 11, WeWork is profitable, restructured, and positioning itself for steady regrowth.
Flight to quality: Law firms are doubling down on premium office space, fueling leasing demand as top-tier buildings defy broader market weakness.
Market flashback: US office space demand dropped sharply in April 2025, with market volatility echoing the steep contraction seen during the 2023 banking crisis.
Duck dynasty: The Anaheim Ducks owners purchased a $72M office tower next to the Honda Center, advancing their $4B OCVibe district vision.
Value reset: South Florida’s office market is cooling from its 2022 highs, with Miami-Dade and Broward seeing sharper value declines than Palm Beach.

🏨 HOSPITALITY

Midscale mastery: By perfecting a formula of consistent comfort, free waffles, and no-frills reliability, Hampton Inn has quietly become the world’s largest hotel brand.
Auction dispute: Joe Moinian is seeking to delay a U.C.C. foreclosure auction of his Midtown Hilton Garden Inn, alleging errors in the lender’s filings.
Talent retention: Hotel operators are investing in leadership programs, culture-building, and career development strategies to transform high-turnover hospitality jobs into long-term careers.

A MESSAGE FROM NEUTRAL

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📈 CHART OF THE DAY

Once priced at a discount, Sunbelt and Midwest multifamily markets now command cap rates equal to, or even lower than, traditional Gateway cities like New York and San Francisco. This inversion reflects a shift in investor preference toward growth markets, though rising supply may soon test valuations in development-heavy regions.