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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:

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.

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