By: Russ Spencer

New York City renters have been saving big since the city’s controversial broker fee ban took effect this summer — but real estate experts say those savings may soon vanish.

As the New York Post exclusively reported, tenants have seen an average windfall of about $1,300 since the Fairness in Apartment Rentals Act (FARE Act) went into effect on June 11, according to new data from tenant review platform Open Igloo.

Open Igloo CEO Allia Mohamed told the Post that while some landlords quickly tacked lost broker fees onto monthly rents, the overall increases this summer were relatively modest. Average rents rose about 6% compared to the same period last year — well below the 8–15% jump some skeptics had predicted.

“We heard a lot of warnings and a little bit of fear over what the FARE Act would be,” Mohamed told the Post. “Rents did increase … but it’s nowhere close to that 8 to 15% increase that some people were warning of.”

Before the ban, brokers could demand fees between 8% and 15% of annual rent — often thousands of dollars upfront. Under the FARE Act, those costs were eliminated, shifting leverage to renters. But experts told the Post the reprieve may be short-lived.

Douglas Elliman broker Keyan Sanai warned that any short-term savings will evaporate as leases renew. “Right now, [rent] is up 6% or more, and we’re talking about one year,” Sanai told the Post. “What about next year when your rent gets raised 3%? The question is, do you end up paying more over time? And the answer is yes.”

Danielle Nazinitsky, CEO of Decode Real Estate, was even blunter: “Maybe [renters are] paying less in fees, but their base rent is up, so if they stay a second year, that $1,300 in savings is totally gone,” she told the Post. She estimated her clients are already facing 10% hikes.

Open Igloo’s report, cited by the Post, found the average one-bedroom rental in New York jumped nearly 15% post-FARE Act, from $3,600 in the spring to $4,125. In high-demand neighborhoods such as So Ho, the West Village, and East Village, increases were even steeper.

Street Easy economist Kenny Lee explained to the Post that soaring mortgage rates have trapped would-be buyers in the rental market, driving up demand while supply lags. Manhattan rental inventory has been shrinking for 18 months straight, he noted, putting further pressure on prices.

Still, some neighborhoods with surging housing stock — like Long Island City, Crown Heights, and Gowanus — have seen more restrained increases as landlords try not to scare off tenants. “What the FARE Act has done is it created a very large incentive for landlords to retain their renters,” Mohamed told the Post.

Yet inventory remains painfully tight across prime areas like the Upper West Side, Upper East Side, Brooklyn Heights, and Cobble Hill. “There’s like 84 rentals in So Ho — which is also Hudson Square — but there’s always been over 150,” Nazinitsky told the Post. “People are scrambling. People are paying over asking price.”

In the meantime, more renters are begrudgingly paying a month’s “broker fee” just to get an edge in the cutthroat market.