StreetEasy® and Zillow® firmly believe in transparency and empowerment for real estate agents and the consumers they assist. In addition to serving millions of New York City buyers, sellers, and renters, StreetEasy’s valued partnerships with local agents have enabled these agents to expand their reach and grow their businesses to new heights.

At the same time, the city is facing a severe housing affordability crisis — compounded by the current broker fee system. And it’s a system that isn’t working for renters or agents. Median rents have reached an all-time high, rising a staggering 7x faster than wages. The average New Yorker also spends $10,454 in upfront costs to move into a rental, the largest portion of which are broker fees. The expense leaves many renters stuck in their apartments, unable or unwilling to move, which means less inventory for agents to market. Additionally, rental agents may not always be paid for their time and efforts, especially when multiple agents are showing the same listing — creating uncertainty about who will receive the broker fee. Despite this, these agents play a crucial role in assisting both renters and landlords, and should be appropriately rewarded for their valuable services.

But broker fees are just one factor contributing to NYC’s affordability crisis. StreetEasy and Zillow are deeply committed to creating a market that is more fair and equitable for all New Yorkers, agents included. Through efforts such as championing increased housing supply, supporting reforms to upfront costs like broker fees and security deposits, and combating housing discrimination, we aim to bring about tangible solutions to alleviate the crisis. Learn more about the work we’re doing, and what you need to know as a real estate agent in NYC.

Our Priorities for Improving NYC Housing Affordability

Reforming the current broker fee model is just one part of our broader efforts to address NYC’s housing affordability crisis. We’re actively working with legislators to bring about policy changes in these four areas:

  1. Lowering upfront costs: In addition to broker fee reform, allow tenants to pay their security deposit in installments rather than in full, which can significantly lower the burden of upfront costs.
  2. Increasing housing supply: Alleviate housing shortages by adopting zoning laws and tax incentive programs that bolster housing development across income brackets, especially in hard-to-develop areas, including ADU/basement-apartment conversion and commercial-to-residential conversion.
  3. Reducing friction in the process: Empower renters by strengthening enforcement of Fair Housing laws and allocating resources to increase education and tenant outreach regarding their rights.

The Need for Broker Fee Reform

The current broker fee system isn’t working for renters or agents, and needs to be addressed through legislation to create transparency for all.

Renters are paying for a service that is ultimately provided to the landlord. On the flip side, landlords frequently assign more than one agent to a listing, and only the agent who finds a renter to sign the lease receives compensation. The arrangement puts agents out of their time, money, and labor spent marketing and showing listings that don’t result in a lease signing.

Consider these findings among rental agents in NYC:

  • 21% spend more than 20 hours on average marketing a property on behalf of a landlord.
  • When asked about the pain points of working with open rental listings, 82% cite the time spent showing the unit, while 46% cite the financial cost of marketing these units.
  • 33% believe renters don’t understand their value, and 31% feel they’re not fairly compensated for their work.

Although it’s just one piece of the affordability puzzle, the need for broker fee reform is clear, immediate, and salient for both renters and agents. Agents provide immense value to renters and landlords, and deserve to be paid for the work they do by the party to whom they’re providing services.

What We Believe

StreetEasy and Zillow are supporting comprehensive legislation to address the NYC housing crisis, with the goal of increasing access, transparency, and affordability. 

Put simply, broker fees should be paid by the party who first engaged the broker, to whom the broker is providing services (in most cases, the landlord or property manager). We also advocate for the following:

  • Hiring party pays. Agents should always be compensated for their work. Renters should only have to pay if they hire an agent. If a renter does not hire a broker, paying a broker fee should not be a condition of signing a lease.
  • Ban single agent dual agency. A single agent should only represent one side of a rental or sales transaction, preventing what is known as “single agent dual agency,” which the state already discourages. Consumers should have a dedicated real estate professional in their corner representing their interests. The practice of a single agent representing both the renter and the broker harms consumers — similar to hiring the opposing party’s attorney to represent you in a lawsuit. This practice is banned in many other states. New York should do the same.
  • Written agreements. If an agent is representing a renter, there should be a written contract reflective of this relationship in advance of fees being paid. All fees should be transparent and negotiable. 
  • No discrimination against renters who are not represented. A buyer or renter is not required to obtain representation from an agent as a condition of a real estate transaction.

Other Efforts

Outside of broker fees, we’re advocating for policy changes to address other factors hindering affordability and mobility in the NYC market. These include insufficient housing supply, zoning regulations that limit housing development, and housing discrimination. Learn more at advocacy.zillowgroup.com.

Our efforts in these areas include: partnering with fair housing advocates such as the Fair Housing Justice Center, Enterprise Community Partners, and the Center for NYC Neighborhoods (CNYCN) as well as industry groups like the New York State Association of Realtors (NYSAR), Hudson Gateway Association of Realtors (HGAR), and Long Island Board of Realtors (LIBOR) to push for resources and legislation to combat housing discrimination statewide; and signing the City of Yes letter and joining the Yes to Housing Coalition.

Interested in partnering with us on our efforts to address NYC housing affordability? Fill out this brief form.

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