"Processing fee" to get new person on lease

Sounds like you're a holdover tenant, so actually I think the broker is entitled to another broker's fee, as outrageous as I know that sounds, and is. Unfortunately I think the $500 sounds pretty good. All I can say is, you're living in one of the most expensive places in the world, not just the USA, and so you get taken advantage of. If you want and need to stay in NYC, this is what happens. BTW the pet fee at one of our rentals was $700, per dog, per year, to put things into perspective perhaps. Insane.

That sounds high

L2L, right now your relationship is direct with the landlord, hence there is no broker who can claim to have procured a tenant for the apartment and therefore no fee would be due. Now of course, the broker probably has a deep relationship with the landlord, almost to the extent of normal business deals in third world countries or the corrupt second world countries called BRIC (plus Mexico), and the landlord has no obligation to renew your lease or write a new lease to you, so you may just have to swallow the fee as a cost of residential rental life in NYC and renewing your lease. $500 to me doesn't sound like the end of the world, but of course I don't know what neighborhood this is in, etc.