Powers, Rivera trying to reduce renters’ fees

Councilmember Keith Powers at a rally last year (Photo by Maria Rocha-Buschel)

By Sabina Mollot

After hearing from tenants who’ve paid up to six months worth of rent in various fees just to get a lease, Council Members Keith Powers and Carlina Rivera have introduced a package of five bills aimed at giving renters a break.

So far, Powers said 26 members of the Council out of 51 have signed on as co-sponsors.

One bill, sponsored by Powers, would limit broker fees to one month’s rent, which seems to be the typical amount charged. However, in some cases renters are charged up to 15 percent of the annual rent. This bill has already seen some pushback by the Real Estate Board of New York.

REBNY has argued that limiting the amount that can be charged isn’t fair to brokers, because they work solely on commission. In response, Powers said that he intends to listen to any concerns, and isn’t completely opposed to the idea of there being some negotiation between broker and renter, but also says the current business model isn’t fair to renters.

“You find a listing and the landlord has hired a broker and you become responsible (for paying),” said Powers. “I don’t think there is another industry where you are paying a fee when you didn’t hire this person.”

Powers also introduced legislation that would cap security deposits to one month’s rent. Rent-stabilized apartments already have this protection, but other apartments in the city do not. Washington, DC and Seattle already have limits on costs for security deposits. According to the comptroller’s office, New Yorkers spent $507 million on security deposits in 2016 alone, and low-wage renters who are considered high-risk are often charged a security deposit two or three times what higher-income renters are charged.

“With two months security deposits and one and a half to three months for broker fees, you’re putting in five months’ of rent before you even walk in the door,” said Powers. “If you took the average rent in Manhattan, it would be $14,000.”

He said he’d recent heard from a recent college graduate who had to pay three months of security deposits, first and last month’s rent and a broker’s fee. The high security fee was apparently due to the tenant not having a guarantor.

“There’s a historical precedent of it being one month,” said Powers. “We don’t think it should be 2-5 months. We think one month is reasonable.”

One of Rivera’s three bills aims to make the payments more manageable by allowing renters to pay their security deposits in six monthly installments. There would still be the option of paying it all at once.

Another bill would guarantee that a tenant gets back his or her security deposit within 60 days of the end of the lease.

Another bill would require brokers who charge an applicant fee to provide an itemized report of what that fee is used for. These fees are typically used to pay for things like background or credit checks, but Rivera has said sometimes they’re just pocketed by the brokers.

On her bills, Rivera said, “With New York City rental costs at all-time highs, we need real solutions that can save thousands of dollars for tenants. While New Yorkers call on Albany to strengthen rent regulation, we at the city level must lead our own effort to level the housing playing field and find ways to make starting a home more affordable.”

2 thoughts on “Powers, Rivera trying to reduce renters’ fees

  1. Obviously you have never own a rental property and are clueless about the different scenarios that can be on the table when a renter files an application for a rental space. The 15% fee is the maximum amount that could be charged but the renter always has an option of negotiating the fee or renting another unit with a lower fee. The market dictates how much a particular rental property can charge for broker’s fee. If you think the max broker’s fee should be 1 month’s rent then you should also cap the fees that credit cards, insurance companies, government offices and thousand other companies charge at will. We agentes and brokers have no benefits at all like insurance, 401k etc, and all of our income is commission based. After splitting in half with our RE broker we are left with a portion of a commission that seldom covers to pay all the things we do not get as a self employed worker.
    Do not pass this bill as it will cause much more harm than good to thousands of real estate agents already affected by monopolies in the advertising arena.

  2. Section 8 Rivera who’s married to trust fund baby millionaire husband , scammed the city until after her election. But let’s come after brokers who are trying to make a living. Makes sense

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