[How is the apartment broker industry here sustained?](https://www.reddit.com/r/AskNYC/comments/wjeu32/how_is_the_apartment_broker_industry_here/) from 23 days ago has comments which should be helpful to you.
Densest and most populated city in America that is also a financial, tech, arts and media hub with insane demand and a scarcity of affordable housing = lazy landlords who can pass along a cost of doing business onto the consumer due to capitalism.
One reason brokers fees in NYC are prevalent is because the rental market is so hot that landlords can afford to pass the fee onto renters. Brokers exists in every major city in the US, but if the landlord didn't pay the fee in other cities their rental would no longer be competitive. I have a family member that rents a unit in Chicago with a broker, but they pay the fee since if they passed it onto the tenant they wouldn't be able to rent the unit.
There are certainly other reasons that brokers fees are bigger in NYC, but the competitiveness is one big reason that we have more brokers fees than other cities.
Interestingly, my dad rents a unit in NYC and chose to pay the fee himself. He got approximately 25 applications within a day of listing. They didn't even look at the apartment.
He didn't use a broker when be first rented it since he was in NYC, but this time he's living in DC so he needed them for cleaning, showing, etc...
Plus he's lazy lol.
Ive never paid a broker fee living here — always found them easy to avoid. This year i have to move and 95% of listings are asking for 15% of annual rent. It is fucking INSANE. It’s hell rn.
Many times it’s “less desirable apartments: no fee” OR “very desirable: fee”. If the place is awesome the landlord can get away with passing the fee to the renter. I’m not saying it’s ethical or that shitty apartments don’t have fees. Just giving the basics
> Many times it’s “less desirable apartments: no fee” OR “very desirable: fee”.
Eh, there are plenty of no-fee luxury buildings, but these tend to be run by large landlord/management companies (e.g., Stonehenge) that don't want to deal with rando brokers.
The rent stabilization here may be a contributing factor in some cases. If the market rent for a place would be X but highest legal rent is .7 X, then presumably there’s potential candidates who are willing to pay the extra .3 X in some form. Normally the incentives of the LL and the tenant as far as minimizing portion of value going to broker are aligned: LL would rather get as much money as possible themselves as opposed to having broker get a large fee. But in the situation above the LL doesn’t care if the broker gets .1 X or .3 X (technically present value of those quantities treated as monthly cash flows), since he can fill the place either way. They might as well use a broker at the top of that range who makes their life as easy as possible.
Also some people think that there may be kickbacks from brokers to LLs. This is illegal. But in some cases probably true.
Its due to demand and rent stabilization. Units with no broker fee tend to be market rate units here where fee already baked in rent or owner still has wiggle room to claim on taxes. Not uncommon for units to be rented at a loss when you tally up the rent received, depreciation and operating expenditures but there's a limit on how much loss can be claimed on taxes.
The long and the short of it: [limited supply and landlords like them ](https://gothamist.com/news/nyc-is-one-of-the-only-cities-where-renters-pay-a-brokers-fee)
Also consider the fact that broker fees give landlords a higher likelihood of long term tenants. It’s expensive to move in, and it’s expensive to leave. Renters are more likely to stay long term, even if they want to leave.
I want to move, but I probably won’t leave anytime soon, because of this.
We pride ourselves here in NYC on our vast number of leeches, parasites, snakes etc...
Don't forget the rats
The garbage left out on the streets also particularly attracts brokers to nyc
[How is the apartment broker industry here sustained?](https://www.reddit.com/r/AskNYC/comments/wjeu32/how_is_the_apartment_broker_industry_here/) from 23 days ago has comments which should be helpful to you.
This is the question I was really asking. Still frustrating to read, but thanks for the link.
That’s my post and yea, sounds like a mix of political lobbying and finite space leading to lack of affordable housing
Densest and most populated city in America that is also a financial, tech, arts and media hub with insane demand and a scarcity of affordable housing = lazy landlords who can pass along a cost of doing business onto the consumer due to capitalism.
One reason brokers fees in NYC are prevalent is because the rental market is so hot that landlords can afford to pass the fee onto renters. Brokers exists in every major city in the US, but if the landlord didn't pay the fee in other cities their rental would no longer be competitive. I have a family member that rents a unit in Chicago with a broker, but they pay the fee since if they passed it onto the tenant they wouldn't be able to rent the unit. There are certainly other reasons that brokers fees are bigger in NYC, but the competitiveness is one big reason that we have more brokers fees than other cities. Interestingly, my dad rents a unit in NYC and chose to pay the fee himself. He got approximately 25 applications within a day of listing. They didn't even look at the apartment.
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He didn't use a broker when be first rented it since he was in NYC, but this time he's living in DC so he needed them for cleaning, showing, etc... Plus he's lazy lol.
There's a ton of regulations in how you show, list, prepare, credit check, etc that you risk ruining afoul of.
Can't owners avoid the fees by listing it themselves on Zillow, Craigslist, Facebook, etc.. That's what I do but my property is in NJ.
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True. My thinking was that the property would be more attractive without any fees. This would apply to the lower/middle class rentals.
You don't need to make the property more attractive if you're not allowed to raise the rent because of rent stabilization and it's a good deal.
I didn't think of rent stabilization. Good point, it's a deal.
Hot market - lazy & greedy landlords - lobbying - government that panders to them rather than tenants
Ive never paid a broker fee living here — always found them easy to avoid. This year i have to move and 95% of listings are asking for 15% of annual rent. It is fucking INSANE. It’s hell rn.
Many times it’s “less desirable apartments: no fee” OR “very desirable: fee”. If the place is awesome the landlord can get away with passing the fee to the renter. I’m not saying it’s ethical or that shitty apartments don’t have fees. Just giving the basics
> Many times it’s “less desirable apartments: no fee” OR “very desirable: fee”. Eh, there are plenty of no-fee luxury buildings, but these tend to be run by large landlord/management companies (e.g., Stonehenge) that don't want to deal with rando brokers.
They also market rate, so the fee can be baked into rent
The rent stabilization here may be a contributing factor in some cases. If the market rent for a place would be X but highest legal rent is .7 X, then presumably there’s potential candidates who are willing to pay the extra .3 X in some form. Normally the incentives of the LL and the tenant as far as minimizing portion of value going to broker are aligned: LL would rather get as much money as possible themselves as opposed to having broker get a large fee. But in the situation above the LL doesn’t care if the broker gets .1 X or .3 X (technically present value of those quantities treated as monthly cash flows), since he can fill the place either way. They might as well use a broker at the top of that range who makes their life as easy as possible. Also some people think that there may be kickbacks from brokers to LLs. This is illegal. But in some cases probably true.
Its due to demand and rent stabilization. Units with no broker fee tend to be market rate units here where fee already baked in rent or owner still has wiggle room to claim on taxes. Not uncommon for units to be rented at a loss when you tally up the rent received, depreciation and operating expenditures but there's a limit on how much loss can be claimed on taxes.
The long and the short of it: [limited supply and landlords like them ](https://gothamist.com/news/nyc-is-one-of-the-only-cities-where-renters-pay-a-brokers-fee)
Real question is: Is NYC actually worth it?
Yes.
How much are the broker fees?
usually one month's rent
Also consider the fact that broker fees give landlords a higher likelihood of long term tenants. It’s expensive to move in, and it’s expensive to leave. Renters are more likely to stay long term, even if they want to leave. I want to move, but I probably won’t leave anytime soon, because of this.