For many renters in Hoboken, moving into a new apartment can often feel like a financial burden due to the plethora of costs involved. With 66 percent of Hoboken residents renting according to RentCafe, the various expenses such as application fees, first month’s rent, security deposits, utility setup costs, furniture, and broker fees can pile up quickly.
Recently, New York City renters received some promising news with the passage of the Fairness in Apartment Rental Expenses (FARE) Act. This law, set to take effect on June 11, 2025, prohibits landlords’ brokers from charging tenants broker fees.
Following years of a rental system where tenants shouldered this additional financial burden, the FARE Act aims to change the dynamics of apartment leasing significantly. Supporters of the Act laud the legislative change, as rental costs in NYC have been consistently high due to broker fees that could equal one month’s rent.
The New York City Council passed the law with a decisive 42-8 vote. With its implementation, landlords are also required to give full disclosure of additional fees in listings and rental agreements. This means that tenants can expect to see a decrease in their upfront costs, around 42 percent on average, as broker fees typically average 12 percent of annual rent.
Critics of the new law, however, warn that landlords might respond to this change by increasing rents, offsetting any potential benefits to the tenants. In the aftermath of the FARE Act’s passage, some landlords have already raised rents significantly, with one instance in Park Slope hinting at a $500 rent increase for prospective tenants if they did not sign a lease before the law came into effect.
There’s also historical precedent for backlash against similar regulations, referencing a 2020 broker fee ban that quickly faced a lawsuit from the Real Estate Board of New York. Opponents argue that long-term tenants may unfairly absorb the costs through rent increases while new tenants benefit from the reduced upfront costs.
Despite potential issues, proponents of the FARE Act argue that it represents a logical step toward more balanced and fair rental practices. Tenants hiring brokers will still have the option to pay for their services directly, allowing for a more straightforward apartment search process.
However, this new law also raises questions about whether it genuinely addresses the larger affordability crisis in New York City’s housing market or merely benefits those intending to move. With the current trend of rising rents continuing prior to the Act taking place, the long-term impact of broker fee bans on affordability remains unclear.
In Hoboken, there is a growing sentiment among tenant advocacy groups for the implementation of a similar ban on broker fees. Hoboken United Tenants voiced strong support for legislation modeled after the FARE Act, pointing out that the existing dual payment by tenants to both landlords and brokers results in prohibitive initial costs for new renters.
Currently, broker fees in Hoboken are comparable to those in New York City, frequently amounting to one month’s rent. To mitigate some of the financial strain on renters, the Hoboken City Council recently passed a rent control ordinance aimed at increasing transparency in rental increases. This new legislation mandates that landlords disclose detailed cost breakdowns when raising rent by over 10%.
Failure to provide this information could lead to fines up to $1,000 per incident, highlighting a shift toward more accountability in the rental process. Additionally, the ordinance requires landlords to reveal whether rent-setting algorithms played a role in any rental increase.
The Hoboken City Council is also discussing another proposed ordinance intended to ban the use of such algorithms altogether, a move already adopted by neighboring Jersey City. This comes as concerns grow over a potential rent-fixing scheme involving major landlords and software companies.
The Hoboken Girl reached out to Council members to gather reactions and insights regarding the possible effects of following New York’s lead with a broker fee ban.
Councilman Phil Cohen indicated that discussions around the FARE Act have taken place among Council members, Mayor Bhalla, and the Corporation Counsel’s Office. Cohen expressed openness to the idea, stating that it ‘makes sense’ for the listing agents to bear the responsibility for broker fees, as they are the ones directly benefiting from the arrangement.
He affirmed the Council’s commitment to considering regulations that may ease the burden on tenants without running afoul of legal challenges.
As Hoboken navigates its own rental landscape, the possibility of implementing a broker fee ban could offer a means of alleviating some pressures faced by local renters. Councilman Cohen remains optimistic that if proposed legislation is crafted to be both beneficial for tenants and legally sound, it could be initiated as soon as this year.
image source from：hobokengirl
