A year later, here’s how the FARE Act has fared.
Thursday marks one year since the City Council passed the Fairness in Apartment Rental Expenses Act, which stipulates that whoever hires a rental agent is responsible for paying the agent.
What constitutes “hiring” has been a major point of contention. The law says that if an agent publishes a listing with the landlord’s consent, that agent cannot collect the fee from a tenant. The Real Estate Board of New York says this violates the First Amendment because it discourages a certain class of people (agents) from making a specific type of speech (in this case, listings).
The Council approved the measure on November 13, 2024. The mayor signed the bill the following month. The rules of the law came into effect on June 11.
In light of this first anniversary, my colleagues and I have put together an overview of how the law has played out so far.
Here is the cheat sheet version:
Inventory: Since the FARE Act went into effect, rental offers on StreetEasy have dropped every month year over year. Average rental prices have also increased, more on an annual basis than on a monthly basis. These shifts likely cannot be attributed entirely to the FARE Act. Lack of supply and high demand are important factors.
Brokerage: Agents are still adjusting to the new landscape. Some, in particular, are eliminating rent-stabilized apartments from their operations entirely.
Legal challenge: REBNY’s lawsuit is ongoing. The trade group is awaiting a decision on its appeal to the Second Circuit.
What’s next: Councilmember Chi Ossé says the law has given tenants more leverage in negotiating lease renewals, freeing them from the threat of having to pay thousands of dollars upfront if they move. He is confident that Mamdani’s future government will work to step up enforcement of the law, and said the council should help educate tenants on how best to document and prove violations.
Of course, the law has only been active for five months. We’ll have more to report as the law continues to reshape the city’s rental market.
What we think aboutt: Who is your choice for the next speaker in the city council? Send a message to kathryn@therealdeal.com.
Something we learned: A year ago, I wrote about Councilmember Chi Ossé’s use of TikTok to mobilize more people to support the FARE Act. At the time, I also noted that he said he used ChatGPT to come up with the name of the FARE Act, although I wasn’t sure if it was a joke. A spokesperson for the councilor confirmed this week that it was indeed a joke. You never know!
Elsewhere in New York…
– Mayor Eric Adams has quietly designated the Elizabeth Street Garden as a city park, in a move that could complicate newly elected Mayor Zohran Mamdani’s pledge to continue affordable housing on the site, Gothamist reports. Developing an urban park requires state legislation.
– New York attorneys have agreed to delay implementation of the state law banning natural gas and fuel oil equipment in new construction. reports the Times Union. The All-Electric Buildings Act was set to take effect in January, but attorneys agreed to put the new rules on hold until the Second Circuit U.S. Court of Appeals rules on a lawsuit challenging the law.
— Jack Schlossberg, the grandson of John F. Kennedy, will run for Rep.’s seat. Jerrold Nadler, reports the New York Times. Several others are already vying to represent New York’s 12th District, including Assemblymember Micah Lasher.
Closing time
Residential: The highest housing deal recorded on Wednesday was $47.5 million for a 7,074-square-foot condominium unit for sponsorship sale in Central Park Tower. Extell Marketing Group had the listing.
Commercial: The best recorded commercial deal was $93.9 million for two of the three parts of 425 Westchester Avenue in Woodstock in the Bronx. Unit 1 consists of 97,381 square feet and Unit 2 has 35,612 square feet. The mixed-use project was developed by Starwood Capital and AB Capstone.
New on the market: The highest price for a home that came on the market was $6.25 million for a 2,634-square-foot apartment at 161 Hudson Street in Tribeca. Danny Davis, Lisa Davis and Lisa Balbeuna with Corcoran have the entry. The apartment that was last exchanged for $2.8 million in 2010.
Groundbreaking: The largest new building permit filed was for a proposed six-story, 32,505-square-foot residential building with affordable housing at 720 East 187th Street in Belmont. John Backos filed the permit on behalf of Doug Pelinkovic.
— Matthew Elo
#Daily #Dirt #Expanding #FARE #Act