For nearly two decades, New York City landlords and real estate agents have been using the StreetEasy® platform to list their properties and reach our shared target audience: renters. Meanwhile, the city faces a severe housing affordability crisis that is exacerbated by the current broker fee system. Zillow® data shows that on average, to move into an apartment, New York renters need to pay upwards of $10,454 in upfront costs — the largest portion of which are broker fees.
We strongly value our relationships with landlords who provide New Yorkers with much-needed housing. And though it’s just one contributing factor to NYC’s affordability crisis, the need for broker fee reform is clear, immediate, and salient. Together, we can build a new and modern system that works better for all parties involved.
To address the affordability crisis, StreetEasy and Zillow are working with legislators to help mitigate upfront costs such as broker fees and security deposits. Other efforts include championing increased housing supply, and combating housing discrimination. Additionally, through partnerships between StreetEasy, Zillow, and landlords, there’s an opportunity to modernize the New York City housing market, incorporate recent technology innovations, and improve millions of New Yorkers’ ability to move into a new apartment. Learn more about our efforts, and what you should know as a landlord 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 areas:
- 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.
- 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.
- 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
Reshaping broker fees is crucial to our larger goal of making it easier and more affordable for New Yorkers to move into a new home. The current system does not serve the best interests of all parties involved, and needs legislative reform.
Renters are often asked to pay for a service that is ultimately being provided to the landlord, and the process can lack transparency. Furthermore, the significant cost of broker fees — usually equivalent to one month’s rent or a percentage of the annual rent — leaves many renters unable or unwilling to sign a new lease, and pressures landlords to offer concessions to attract new tenants. By taking steps toward legislative action, StreetEasy and Zillow are doing what we can to make living in (and moving within) New York City a reality for more people.
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). Through our efforts, we’re proposing 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.
Opportunities for Landlords
StreetEasy and Zillow are open and enthusiastic about working together with landlords to create a better system for all. We welcome new and innovative technology solutions in the rental space, such as those enabling renters to pay their security deposit in installments while ensuring landlords are protected. In serving NYC renters, buyers, and sellers looking for their next home, we’re committed to fostering relationships that allow landlords to continue housing millions of New Yorkers.
Interested in partnering with us on our efforts to address NYC housing affordability? Fill out this brief form.
StreetEasy is an assumed name of Zillow, Inc. which has a real estate brokerage license in all 50 states and D.C. See real estate licenses.
