New York City renters are encountering a new hurdle in their apartment search: brokers are charging thousands of dollars for access to rental listings that are being kept off public websites. This practice has emerged approximately one year after the city enacted legislation barring landlords from passing broker fees onto renters.
Instead of openly advertising properties on platforms like StreetEasy, some brokers are increasingly withholding units from public view. They then offer these apartments to renters who agree to engage their services and pay a commission upon signing a lease.
Alexandra Dye, a 29-year-old advertising professional, paid a broker $4,000 to secure a two-bedroom apartment in Brooklyn. The unit was priced approximately 60 percent below market rate. Dye had initially inquired about an apartment advertised on StreetEasy, but the broker informed her that the unit was no longer available. However, the broker offered to show her other apartments on the condition that she pay at least one month's rent as a commission if she leased one through him. After two months of encountering fraudulent listings and a landlord who rescinded an offer, Dye found the arrangement worthwhile, ultimately paying the broker more than double her monthly rent.
"It feels like a lot of listings are being hoarded," Dye told Bloomberg. "I miss the transparency of before."
The trend coincides with a tightening rental market in New York City. In July, the median rent for a new market-rate lease in Manhattan reached a record $5,000, a 6.4 percent increase from the previous year, while publicly listed inventory decreased by 39 percent year-over-year. Brooklyn also saw its median rent hit a record $4,500, with inventory down 27 percent.
Jonathan Miller, director of markets at StreetMatrix, noted to Bloomberg that a growing volume of rental inventory is being kept off public portals. "That's not normal," Miller stated. "There's a lot of inventory that's going behind paywalls that the market can't see."
This situation is creating a disparity between apartments accessible through public searches and those circulated privately via brokers and other channels. Some renters are reportedly turning to brokers because publicly advertised apartments are difficult to secure, and these brokers can provide access to units that never appear on major listing sites.
The development represents an unintended consequence of the city's efforts to reform the rental-broker system. New York City's FARE Act, which took effect in June, prohibits landlords from compelling renters to pay fees for brokers hired by the landlord. The law was intended to enhance rental cost transparency and shield tenants from unexpected broker fees.
However, the change has led to some brokers withholding apartments from major platforms and charging prospective tenants for access to their private listings. Consequently, renters may find themselves paying thousands of dollars to a broker not just to finalize a deal, but to gain entry to apartments they could not find through public searches. Reports indicate that some brokers are charging fees equivalent to approximately one month's rent, which can exceed $4,000 in New York City's high-cost rental market.
This practice has raised concerns that the FARE Act may be inadvertently reducing market transparency for the tenants it was designed to assist.