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Manhattan Community Board Five
NYC Councilmembers Rivera and Powers’s Package of Rental Housing Cost Bills
At the regularly scheduled monthly Community Board Five meeting on Thursday, July 11, 2019, the following resolution passed with a vote of 30 in favor; 3 opposed; 1 abstaining and 2 present but not entitled to vote:
WHEREAS, Community Board Five is concerned by rising housing costs in New York City; and
WHEREAS, The average apartment rent in New York City has increased 60% since 2011; and
WHEREAS, New Yorkers pay more than $500 million in security deposits per year; and
WHEREAS, Some apartment rental transactions in New York City require tenants to pay a broker fee to real estate agents of at least one-month’s rent and as high as 15% or more of annual rent; and
WHEREAS, Entering a rental agreement may require substantial up-front costs, which could include a broker fee, one month’s rent as a security deposit, and sometimes a last month’s rent; and
WHEREAS, These upfront costs represent a cost burden on prospective tenants across the economic spectrum, with only 46 percent of renters possessing savings for unexpected expenses or emergencies within the last year; and
WHEREAS, A real estate agent may be hired by a landlord or building manager to promote its housing stock, and in many cases, a prospective tenant is required to pay a broker fee as a condition of signing a lease, notwithstanding the fact that the prospective tenant never sought out the services of the real estate agent and may be unaware that a broker fee will be required when inquiring about or visiting the potential apartment; and
WHEREAS, Broker fees are typically borne entirely by the renter, despite the benefits of landlord-hired real estate agent services accruing almost exclusively to the landlord; and
WHEREAS, Council Members Carlina Rivera and Keith Powers have proposed six bills that would cap broker fees and limit the high costs of housing in New York City; and
WHEREAS, Int 1423A-2019 would limit broker fees paid by renters to brokers hired by a landlord or owner to a maximum of one month’s rent; and
WHEREAS, Int 1424-2019 would limit security deposits required by landlords to a maximum of one month’s rent; and
WHEREAS, Int 1431A-2019 would require landlords to return security deposits to tenants within 14 days of the end of their lease; and
WHEREAS, Int 1432-2019 would require brokers to disclose itemized explanations for any rental application fees; and
WHEREAS, Int 1433-2019 would require landlords to offer tenants the option of paying a security deposit in six monthly installments (or for leases less than six months, however many monthly installments equal the length of that lease); and
WHEREAS, Int 1499-2019 would provide limitations on and disclosure rules regarding tenant screening reports; and
WHEREAS, While Community Board Five does not believe that these bills have the tangible effect of limiting the substantial upfront costs to renters; and
WHEREAS, Community Board Five is concerned with the lack of data underlying this proposed law; and
WHEREAS, Community Board Five believes that enforcement of the proposed rental fee limitations is not adequately considered in these bills; and
WHEREAS, Community Board Five recognizes that the proposed bills do not increase affordable housing stock in New York, and
WHEREAS, Community Board Five recognizes that there may be some difficulty in the implementation of a fourteen day return of security deposits given the need to await the final utility payments; and
WHEREAS, Community Board Five continues to encourage the City Council to maintain a focus on affordability; and
WHEREAS, Nevertheless, Community Board Five believes that these bills at least take a step in the necessary direction of decreasing the costs of housing for all New Yorkers; and
WHEREAS, Community Board Five believes that these bills would particularly help those New Yorkers who are less financially stable to secure livable housing; therefore be it
RESOLVED, Community Board Five supports the passage of Council Member Rivera and Powers’s proposed bills, including:
- Int 1423A-2019, which would limit broker fees paid by renters to brokers hired by a landlord or owner to a maximum of one month’s rent; and
- Int 1424-2019, which would limit security deposits required by landlords to a maximum of one month’s rent, particularly to harmonize New York City law with what is now state law; and
- Int 1431A-2019, would require landlords to return security deposits to tenants within 14 days of the end of their lease, particularly to harmonize New York City law with what is now state law; and
- Int 1432-2019, which would require brokers to disclose itemized explanations for any rental application fees; and
- Int 1433-2019, which would require landlords to offer tenants the option of paying a security deposit in six monthly installments (or for leases less than six months, however many monthly installments equal the length of that lease), and therefore provide a more affordable solution to renters, even though Community Board Five is concerned about the potential unintended consequence of landlord bias toward prospective tenants who do not elect the security deposit installment option; and
- Int 1499-2019, which would provide limitations on and disclosure rules regarding tenant screening reports; and be it further
RESOLVED, Community Board Five would strongly encourage the City of New York and/or the Real Estate Board of New York to collect data regarding broker fees, security deposits, and other line items that drive up the cost of renting in New York to inform enforcement and the efficacy of housing policies.