Broker fee bill bad news for Bronx renters, agents

As a real estate agent active in the Bronx for the past eight years, I’ve been proud to help residents find their next apartment here. I also know firsthand the increasing challenges of finding a quality, affordable apartment amid a lack of housing supply.

Those challenges are part of why agents work hard. We’re out there day and night, rushing to apartment showings, answering questions from potential applicants, and making sure the right information is available and updated for listings online, among so many other tasks.

And not many people realize that the average entry-level agent makes only around $52,000 per year, with the vast majority of agents making less than six figures. We rely on commissions — also known as “broker fees” — for our livelihood.

My experiences in this field also help me understand why a new broker fee bill introduced by Councilman Chi Ossé will cause major problems for both renters and agents.

This new legislation might seem helpful to renters at first glance. It would prevent real estate agents from charging a broker fee unless the renter has “hired” the agent. But renters need to be aware of what will happen in many cases if a landlord chooses to hire a real estate agent and pay that cost themselves. It’s a relatively obvious answer: the landlord will pass on that cost to the renter anyway by raising the monthly rent of the apartment.

I know this will be true in many cases because of what happens already. When you see an apartment listing advertised as “no fee,” what that really means is that the “fee” is simply baked into the monthly rent in order to cover the landlord’s costs of using an agent their office is already paying. These apartments generally rent at higher rates, and that will become the norm if more landlords pay for their own agents.

The average monthly rents in Riverdale currently run from around approximately $2,300 for a studio to around $6,000 for a three-bedroom apartment in a new development. Do renters really need that to keep rising even higher in neighborhoods across the borough, especially with the housing shortage making inventory even tighter? Certainly not. But that is what would happen in many cases if this legislation is passed.

But what about in cases where the landlord or unit owner chooses not to hire an agent at all? That will certainly happen as well — and that’s when working-class agents in our borough suffer the consequences.

Imagine you’re an agent in the Bronx who makes around $50,000 or $60,000 per year, and you spend all week serving potential clients while also paying your own rent, covering your food and health care costs, or maybe even helping support a spouse, child or senior family member.

One day you can no longer collect much-needed commissions from the renters you have been helping for years. And then the property or unit owners you worked with tell you that, due to a new law, they would rather simply post generic apartment listings and will not be paying you any fees for your services.

Your income has been limited, and your livelihood is no longer sustainable. Your rent or bills may go unpaid. Your family may no longer be able to rely on the support you once provided.

You may wonder: In scenarios where no agent is hired, could this also negatively impact renters? The answer is yes, particularly for renters who may be applying to live in co-op buildings, where the process can be quite different from a traditional rental.

Renting in a co-op often requires an application process. The co-op board typically reviews applications and the criteria can be stringent. An agent guides renters through the process to ensure they provide all necessary documentation, including a significant amount of paperwork, and meet the board’s requirements — including interviews with board members.

This assistance can make the difference between being approved or denied. Additionally, co-op buildings often have specific rules that renters must follow. Agents help renters understand these rules and ensure that they are comfortable with the building’s policies before committing.

The councilman’s legislation would not prevent a renter from hiring their own agent to facilitate an application in a co-op building. However, it is fair to assume that if this bill is passed, there would be many cases in which a renter has not hired an agent, and the co-op unit owner has also not hired an agent, simply to try to save money.

The result of that particular scenario would have doubly negative impacts: The renter would not receive much-needed assistance, and the opportunities for working-class agents would be limited. This is not the kind of win-win the councilman has promoted. It is, in fact, a lose-lose.

I am deeply concerned that these are the bad outcomes Councilman Ossé is threatening to push forward under his legislation.

Think about the facts and the reality. Increasing rents is a problem. Taking fair commissions from working-class people is a problem. Removing clarity from the co-op rental application process is a problem.

It’s time to give our Bronx elected officials a simple message: Say no to this bill.

The author is a real estate agent for the Corcoran Group