NYC’s Broker Fee Ban Disrupts Rental Data

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New York City’s broker fee ban is wreaking havoc on rental data.

The number of new rental listings uploaded to local listing services has dropped dramatically since the law, known as the FARE Act, took effect in mid-June. The provision prohibits landlords from charging tenants fees for agents they hired and imposes fines up to $2,000 per violation.

Between June 11 and July 31, brokers added just 1,400 rental listings to the Residential Listing Service, Brooklyn MLS and similar agent-facing platforms, compared to 5,300 listings submitted during the same period last year, according to data from UrbanDigs. The total marked a 74 percent decline in new listings year-over-year.

“This sharp decline suggests landlords are using other listing sources as they adjust to the new FARE Act requirements,” UrbanDigs’ co-founder John Walkup wrote in a statement.

The “collapse” in rental listings on the RLS comes after a July report from StreetEasy found rental inventory on its platform had held steady in the month after the law’s passage, excluding a temporary drop in listings immediately after the law took effect.

The day after the FARE Act’s implementation, more than 1,000 listings disappeared from StreetEasy. The company chalked the sudden dip up to those represented by rental agents who did not have an updated compensation agreement in place before the law’s implementation.

“The outflow of listings has since stabilized and followed usual seasonal trends associated with summertime leasing activity,” the report states.

However, the platform logged an 8 percent decline in rental inventory across the five boroughs last month compared to July 2024, according to its data dashboard. Manhattan notched the largest drop, with inventory falling more than 11 percent.

“The FARE Act curbs brokers’ ability to market nonexclusive listings, leading to a noticeable drop in inventory across platforms,” REBNY’s senior vice president of residential brokerage wrote in a statement. “With vacancy rates at historic lows, this reduced visibility makes an already competitive market even harder to navigate for everyday New Yorkers.”

The Real Estate Board of New York requires its members to submit rental listings to the RLS if they have an exclusive agreement with the landlord.

Unlike consumer-facing platforms such as StreetEasy and Zillow, the RLS limits who can upload their listings directly to the service, as it is designed to encourage co-broking between agents. The platform does not allow landlords or property managers who are not licensed brokers to submit their units.

REBNY and others in the industry cautioned that the law could drive rental inventory down, as the provision assumes that brokers have exclusive agreements with landlords, making the landlords responsible for their compensation. Before the law, brokers were able to market listings to tenants without an exclusive agreement with the landlord and collect fees from tenants directly.

A federal judge has rejected multiple bids from REBNY to halt the FARE Act’s implementation while a lawsuit it filed against the City Council makes its way through the courts. REBNY has alleged that the provision violates the First Amendment.

Some agents have said the law’s implementation has created chaos. Market analytics firms reported inflated rents in the immediate aftermath of the law, and uncertainty over how to properly comply with the rules.
“Boy, is it confusing,” said Donna Olshan of Olshan Realty. She added that finding accurate data on the rental market was already a tall order, but the fallout from the new law could likely make it worse. “I don’t know who’s going to keep the data now.”