New York City Mayor Zohran Mamdani's proposal to ease the burden on renters by altering landlord screening processes could inadvertently lead to higher costs and increased barriers for tenants, according to a veteran Manhattan broker. The plan, part of Mamdani's "Rental Ripoff Report," aims to prevent landlords from requiring both a credit check and proof of income from applicants, forcing them to choose only one method.
The proposal, which requires City Council approval, would also shift the cost of credit checks from tenants to landlords. Cea Weaver, director of the Mayor's Office to Protect Tenants, drew a parallel to the 2024 FARE Act, which mandated that landlords cover broker fees.
However, Keyan Sanai, a top rental agent at Douglas Elliman, contends that the targeted fee for credit checks is minimal and already capped at $20 by a 2019 state law, with waivers available if applicants provide a recent report. He argues the core issue is the restriction on landlords' ability to review both credit and income simultaneously, which he describes as a limitation on basic financial underwriting.
Sanai drew a comparison to a 2019 rule that capped security deposits and prohibited landlords from also collecting the final month's rent upfront. He stated this change made it harder for individuals with irregular income or limited credit to strengthen their applications, often pushing them toward third-party guarantor companies that charge a significant, non-refundable fee.
He predicts a similar outcome for the current proposal, asserting that landlords will not forgo financial assessments. Instead, they will likely increase requirements for personal or institutional guarantors. For renters without access to financially capable family members who can co-sign—a requirement often equivalent to 80 times the monthly rent—this could mean paying a company a fee that approximates one month's rent, which is never returned.
Sanai expressed concern that this proposal mirrors the unintended consequences of the FARE Act. He noted that while the FARE Act aimed to save renters money by having landlords pay broker fees, Manhattan's median rent reached a record high shortly after its implementation. Although a broader housing shortage contributed to rent increases, Sanai believes landlords do not absorb new costs indefinitely but pass them on through higher rents, stricter underwriting, or reduced services.
He anticipates that the proposed credit check policy will similarly raise the barrier to entry for renters, particularly those without wealthy family members to act as guarantors. Sanai believes that while the policy will be presented as tenant protection, the ultimate cost will fall on renters, with politicians avoiding accountability.
Sanai suggested that landlords are not yet overtly concerned about the proposal, drawing parallels to their initial reaction to the FARE Act. He noted that the FARE Act, intended to benefit tenants, ultimately contributed to higher rents and increased the value of rent rolls for landlords, especially during lease renewals.
Sanai concluded that New York City's competitive housing market provides landlords with leverage that legislative changes may not overcome. He stated that the proposal could lead to renters needing to provide more substantial financial backing to secure a lease, a situation he believes will ultimately benefit landlords.