7 ms·

If I’m not mistaken, didn’t NYC enact a law last year that bans landlords from charging tenants the broker fee?

infogulch 5y ago
It's good that there's no surprise fees, but they're still being paid. It's like anything, the value is just hidden in the price of the product now, rent in this case.
- justaguy88 5y ago
  The landlord can decide if it's worth paying them then
  - michaelmrose 5y ago
    If the landlord pays a fee equal to a percentage of the rent you will be paying them if you rent there. If they are pervasively popular in your market you wont have much choice but to pay them as well.
  - infogulch 5y ago
    That's not how anything works. The money doesn't just come from nowhere, or from the landlord's profits. It is accounted for as an increase to rent. That's what I meant by "surprise fees", you're still paying them, they're just not a surprise anymore. Maybe the increased transparency in the market will push out brokers that aren't adding value, but that's more of a hope.
    - heurisko 5y ago
      It's not a hope, it's reality in other countries, like the UK. We banned letting agent fees charged to the tenant. Miraculously, landlords didn't find paying £250 for a contract renewal value for money. Rents continue to go up and down, but now tenants know they are spending money on their flat or house, rather than paying inflated fees to a letting agent/broker.
syshum 5y ago
That is not how economics work... All fees are passed on to the consumer in some way, it is either a line item or hidden
- apercu 5y ago
  True, except in this case NY is one of the few places in the world that requires such nonsense.
- tut-urut-utut 5y ago
  No, they are not. The consumer price depends only on supply and demand. Fees don't influence none of it, only the cost of the selling party and thus his profit.
  - enjo 5y ago
    This is correct in almost all cases (outside of highly commoditized goods) and it's crazy how people don't understand it. It's why the price of McDonalds doesn't increase when minimum wage does. McDonalds is already charging as much as they can for a Big Mac (where stores averages a 40% margin). Increasing minimum wage means that margin goes down a bit, not that prices increase. If they could increase prices they already would have.
    - stale2002 5y ago
      So you just reject the field of economics entirely? Like, lets say that the government adds a 20$ tax/fee on fast food, per burger sold. Clearly McDonalds would no longer be able to sell burgers for 4 dollars. Thus price would increase. Or supply of burgers would go down (thereby only leaving higher priced burgers in the market).
    - EricE 5y ago
      Fast food prices have increased greater than inflation for some time: https://www.delish.com/food/news/a39265/fast-food-menu-price-increases-from-2002-to-2013/ https://www.delish.com/food/news/a39265/fast-food-menu-price... Thinking that labor costs do not impact product costs is grossly ignorant.
solumos 5y ago
It was a state law that capped application fees at $20 or something, and some authority interpreted that as broker's could no longer charge fees to tenants, but then the real estate brokers association was granted a stay + the court eventually decided in their favor.

It's good that there's no surprise fees, but they're still being paid. It's like anything, the value is just hidden in the price of the product now, rent in this case.

justaguy88 5y ago
The landlord can decide if it's worth paying them then
- michaelmrose 5y ago
  If the landlord pays a fee equal to a percentage of the rent you will be paying them if you rent there. If they are pervasively popular in your market you wont have much choice but to pay them as well.
- infogulch 5y ago
  That's not how anything works. The money doesn't just come from nowhere, or from the landlord's profits. It is accounted for as an increase to rent. That's what I meant by "surprise fees", you're still paying them, they're just not a surprise anymore. Maybe the increased transparency in the market will push out brokers that aren't adding value, but that's more of a hope.
  - heurisko 5y ago
    It's not a hope, it's reality in other countries, like the UK. We banned letting agent fees charged to the tenant. Miraculously, landlords didn't find paying £250 for a contract renewal value for money. Rents continue to go up and down, but now tenants know they are spending money on their flat or house, rather than paying inflated fees to a letting agent/broker.

syshum 5y ago

That is not how economics work... All fees are passed on to the consumer in some way, it is either a line item or hidden

apercu 5y ago
True, except in this case NY is one of the few places in the world that requires such nonsense.
tut-urut-utut 5y ago
No, they are not. The consumer price depends only on supply and demand. Fees don't influence none of it, only the cost of the selling party and thus his profit.
- enjo 5y ago
  This is correct in almost all cases (outside of highly commoditized goods) and it's crazy how people don't understand it. It's why the price of McDonalds doesn't increase when minimum wage does. McDonalds is already charging as much as they can for a Big Mac (where stores averages a 40% margin). Increasing minimum wage means that margin goes down a bit, not that prices increase. If they could increase prices they already would have.
  - stale2002 5y ago
    So you just reject the field of economics entirely? Like, lets say that the government adds a 20$ tax/fee on fast food, per burger sold. Clearly McDonalds would no longer be able to sell burgers for 4 dollars. Thus price would increase. Or supply of burgers would go down (thereby only leaving higher priced burgers in the market).
  - EricE 5y ago
    Fast food prices have increased greater than inflation for some time: https://www.delish.com/food/news/a39265/fast-food-menu-price-increases-from-2002-to-2013/ https://www.delish.com/food/news/a39265/fast-food-menu-price... Thinking that labor costs do not impact product costs is grossly ignorant.

solumos 5y ago

It was a state law that capped application fees at $20 or something, and some authority interpreted that as broker's could no longer charge fees to tenants, but then the real estate brokers association was granted a stay + the court eventually decided in their favor.