FARE Act 2025: What NYC Renters Must Know

As of June 11, 2025, New York City’s rental market enters a new era. The FARE Act, short for Fairness in Apartment Rental Expenses, requires the party who hires a broker to pay their fee—almost always the landlord.

On paper, it sounds renter-friendly. In reality, the market is adjusting fast. Landlords are recalculating costs, brokers are reassessing relationships, and tenants are navigating a seemingly fairer landscape with a hidden cost structure. This isn’t just policy—it’s a reallocation of power.

What Is the FARE Act?

Imagine walking into a restaurant, being assigned a waiter without ever asking for one—and then getting the bill for their time. That’s how broker fees have felt to thousands of New Yorkers for decades. You didn’t choose the agent, you didn’t negotiate their service, yet you footed the bill.

The FARE Act sets out to correct that imbalance. Enacted under the banner of fairness and transparency, this legislation clearly defines who pays the broker: the person who hires them. That means:

If a landlord or property manager hires a broker to list or lease an apartment, they must pay that broker’s fee.
Renters only pay a broker fee if they initiated the relationship and hired the agent themselves.

This shift isn’t just about money—it’s about autonomy. Renters now gain clarity and agency in a process that previously left them with all the cost and little control. Especially for first-timers, this levels the playing field in one of the country’s most complex and competitive rental markets.

Rents Will Rise

Here’s the bottom line: landlords aren’t absorbing this new cost quietly. In real estate, every dollar has to land somewhere—and it’s landing in the rent.

Yes, the FARE Act removed the upfront broker fee for many tenants. But in a city where margins are everything and demand rarely wavers, landlords are adjusting fast. What renters save in one hand, they may be handing back month-by-month through higher leases.

It’s a sleight of hand wrapped in good PR. And while renters may breathe easier on move-in day, the cumulative increase often tells a different story.

Evidence on the Ground

A Clinton Hill apartment’s rent jumped from $3,200 to $3,600 (approx. 11%) immediately after the law took effect.
Market-wide projections expect 8–10% increases now, and another 2–5% in the next 12 months.

That’s a potential 10–13% hike within a year, and likely more to follow.

For Renters: Short-Term Relief, Long-Term Cost

For renters, the FARE Act initially feels like a victory. Gone are the dreaded broker fees eating up your deposit fund. Moving just got thousands of dollars cheaper—and that matters in a city where every dollar counts.

StreetEasy reports show a 42% drop in upfront moving costs. But here’s the catch: that money isn’t saved. It’s simply being redistributed.

The fee is now folded into the rent, like a hidden tax. What was once a one-time expense is now a permanent monthly increase. It’s budgeting theater. You feel more liquid at move-in, but pay more over time—and often without realizing it.

For Landlords: A Fork in the Road

The FARE Act hasn’t just affected renters—it’s reshaping how landlords operate. For building owners, it’s a decision point: do they trim costs or reinvest?

1. Bring Leasing In-House

Some landlords are hiring internal leasing agents to avoid broker fees entirely. This grants tighter control and marginal savings—but it often comes at the cost of slower leasing cycles and less polished presentation.

2. Embrace Broker Partnerships

Others are doubling down on proven broker relationships. For them, brokers aren’t an expense—they’re a value multiplier. Professional agents attract quality tenants faster, reduce vacancy losses, and increase effective rent. All of this lifts Net Operating Income (NOI) and enhances building valuations.

Smart landlords aren’t looking at just today’s cost—they’re optimizing for tomorrow’s value.

For Brokers: Adaptation Required

Brokers find themselves in a shifting lane. The FARE Act didn’t cut them out—but it did change the rules of the road.

No longer guaranteed payment by default, brokers now need to justify their seat at the table. The question is no longer “Can you show this?”—it’s “What strategic value do you add?”

Successful agents are leaning into:

Sophisticated marketing packages
Targeted outreach and prospecting
Pricing guidance based on hyperlocal comps

This is a filtering moment in the industry. The transactional agents will fade. The trusted advisors will rise.

The Reality Check: Who Actually Wins?

Let’s not sugarcoat it: landlords win. They retain control, pass costs onto tenants, and preserve their revenue—often improving their optics with “no fee” listings.

Renters lose—at least in the long run. What looks like savings on Day One becomes a long-term cost. And unless you run the numbers, you won’t notice the difference until your lease renewal.

“Your rent is raised based on an 8% increase now… Couple that with the normal 2–5% increase you’ll see in 12 months, you’re looking at a 10–13% increase over the next year. And then another 2–5% the following year.”

The broker fee hasn’t disappeared—it just changed its outfit.

Conclusion: A Moment to Move Strategically

The FARE Act is more than just a legal tweak. It’s a reframing of how value, service, and cost are distributed across the rental ecosystem.

If you’re a renter, this is your moment to think long term. What seems cheaper now may cost you more over time.

If you’re a landlord, reevaluate your leasing model with fresh eyes. The right strategy today could define your building’s performance for years to come.

And if you’re a broker? It’s time to step up—not just as a connector, but as a strategist.

As always, in New York real estate: clarity wins. And the right guidance can make all the difference.

Frequently Asked Questions (FAQ)

What is the FARE Act in NYC?

The FARE Act (Fairness in Apartment Rental Expenses) requires landlords to pay a broker’s commission if they hired the broker to lease an apartment. Renters only pay a fee if they directly engaged a broker for their own search.

Who benefits most from the FARE Act?

Landlords benefit the most. They now control the broker relationship and can bake those costs into rent. Renters may see lower upfront costs, but usually end up paying more over time. Brokers’ outcomes vary depending on their alignment with landlords.

Are broker fees eliminated in NYC?

No, broker fees still exist. The FARE Act simply changes who pays them. In most cases, landlords will cover the fee, though they typically increase rents to recoup the cost.

Will this law make renting cheaper in the long run?

Unlikely. While initial costs decrease, monthly rents are rising. Many renters could end up paying more across a lease term than they would have with a one-time broker fee.

What should landlords do now?

Landlords should evaluate whether to internalize leasing operations or invest in broker partnerships. Either way, understanding the cost-benefit balance and long-term asset value is key.

How does this affect brokers’ careers?

Brokers must adapt by becoming more strategic and client-driven. Those offering tailored marketing, pricing guidance, and exclusive access will thrive, while passive agents may struggle.

Should I still consider buying a home in NYC instead of renting?

If you’re planning to stay in the city long-term, buying may be the smarter move. You avoid rising rents, build equity, and gain tax advantages. The FARE Act highlights how quickly rental economics can shift.