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Unless you want the housing market in Gotham to get even worse, you should cheer the Real Estate Board of New York suit to block a law that attempts to stick landlords with brokers’ fees.
The federal lawsuit argues that the City Council’s mandate violates state law as well as brokers’ free-speech rights, but the statute is just plain toxic.
The FARE Act requires whoever hires a broker (overwhelming landlords) to pay the fee; it sailed through the hard-left council with a veto-proof majority of 42-8 last month — proving once again that progressives don’t (or pretend not to) understand basic cause and effect.
REBNY argues that the city lacks the authority to override existing state laws and regulations governing real-estate brokers, but the FARE Act’s actual impact is a bigger problem.
The harebrained law will make life worse for New Yorkers, no matter how much progs claim it’s a boon to renters.
Pre-FARE, any number of brokers can list a property online; the one who successfully gets it rented out then collects the fee.
More than half of the apartments on sites like Zillow and StreetEasy are listed this way.
But FARE requires that any agent promoting the property online must be hired (and paid) by the landlord — guaranteeing far fewer apartment listings, and so making it tougher to find a place even as landlords struggle to fill empty units.
REBNY’s suit argues that this effectively curbs brokers’ speech, violating their First Amendment rights and violates contract law by voiding any existing agreement in which a broker is required by the landlord to seek payment from the tenant.
The law will inevitably hike rent prices, too.
Progressives love to smear landlords as greedoids who hoard wealth, but countless New York landlords own just a building or two and have tight margins: They can’t magically absorb a new expense.
Sticking landlords with the brokers’ fees won’t just make the cost go away; landlords will hike rent prices even further to cover it.
Some may take their units off the market or get out of the renting business altogether, selling off to the very mega-corporations that progressives fume about.
The FARE Act will be disastrous for anyone trying to navigate the (already nightmarish) housing market in New York City: Landlords, brokers and renters.
And it’s legally dubious.
The judge overseeing REBNY’s lawsuit should kill it for good.