Category: Market Insights

By Manhattan Real Estate Tracker, September 13, 2024

The latest residential leasing report by Corcoran indicates that while average rents continued to increase by 4%, the number of reported signed leases has declined in eight of the last nine months. The number of signed leases decreased annually by 15% to fewer than 4,800 lease – the lowest level since the early stages of the pandemic in June 2020. Corcoran concludes that “a larger portion of Manhattan’s renters have decided to stay put.”

Gary Malin, Chief Operating Officer, The Corcoran Group stated:

“Median rents in both Manhattan and Brooklyn continued their rise during June and are now at new all-time highs in both boroughs. However, it is important to note that the number of lease signings slowed on both sides of the East River, falling a substantial 14% and 23% in Manhattan and Brooklyn, respectively, when compared to May. Historically, activity increases as we enter summer, so the record-high pricing might be keeping some apartment seekers on the sidelines or choosing to explore options in other boroughs or locales. It will be interesting to see if this trend reverses as we move through the season. At a certain point, there is a limit to how much a renter is willing — or able — to pay. Barring a turn-around, landlords may need to increase incentives or make the necessary adjustments to spur greater numbers of tenants to act.”

Real Estate Agents Rally to Stop Intro 360 at New York City Hall

By Manhattan Real Estate Tracker, June 12, 2024

Real estate agents and brokers came out this morning to City Hall in Downtown Manhattan today to rally against Intro 360 which would require only those who hire a real estate agent to the broker fee. While all commissions are negotiable, typically the broker fee for leasing an apartment is 15 percent of the first year’s rent. New York City is unlike any city in the country, Manhattan Real Estate Tracker strongly opposes Intro 360.

According to the co-sponsor of the measure, City Council member Chi Ossé, renters deposit $10,000 on average for a new home. One major expense he wants to eliminate is the mandatory broker fee. However, landlords will simply raise the rent and in the long run, the renter would have paid more in rent than if they paid a broker fee and received a lower starting rent.

Tenants claim that they had to pay the broker fee even though “they didn’t hire a broker.” When an agent markets an apartment for rent and a potential tenant inquires about it, it was the agent’s experience and knowledge of real estate and marketing that not only secured the exclusive listing but also generated the call. This work has value and in certain cases, the agent should be compensated by the renter.

Links to local online articles regarding today’s rally and Intro 360 from local New York television stations can be found below.

ABC 7 New York NYC Council considers shifting broker fees to landlords – ABC7 New York (abc7ny.com)

CBS 2 New York Public hearing on NYC real estate broker fee reform gets heated. What people on both sides of the issue are saying. – CBS New York (cbsnews.com)

Article from the Real Estate Board of New York (REBNY) regarding Intro 360:

1,500 Agents Rally at City Hall to Oppose Broker Fee Bill | Rebny

Manhattan Real Estate Tracker will be attending the rally at City Hall on Wednesday, June 12, 2024 to oppose Int. 360. This bill would stop real estate brokers and agents of a landlord from collecting a broker’s fee from a renter. All agents and brokers can attend to support the opposition of this bill.

The City Council states, “This bill would require an individual who is a representative or an agent of a property owner or a prospective tenant in a residential rental real estate transaction to collect fees charged in the transaction from the party employing the individual. The provisions of this bill would not impact the collection of fees by a landlord or property owner.”

Programs for regulating rent, known as rent control and rent stabilization, are in place in several communities around New York State. Rent regulation has two purposes: first, to shield tenants in privately held buildings from unlawful rent hikes; second, to enable building owners to maintain their properties while making a fair profit. Of the two rent regulation schemes, rent control is the more established one. It was first implemented in response to the housing scarcity that followed World War II and is typically applicable to structures built before 1947. In general, rent stabilization applies to apartments that were freed from rent control and buildings constructed after 1947 but before 1974. It also includes buildings that are eligible for tax incentives under J-51, 421-a, and 421-g. The apartments that are eligible for these tax benefit programs are determined by their own set of regulations.

Rent stabilization outside of New York City is also referred to as ETPA, or the Emergency Tenant Protection Act, and it’s legal in a few counties and places (see Fact Sheet #8). Rent stabilization can also apply to housing accommodations whose rentals are set by public benefit corporations, DHCR, and other government bodies, as outlined in the rent regulations.

Rent Stabilization
In addition to limiting the amount of rent increases, rent stabilization offers tenants protections. Tenants are entitled to the provision of necessary services, the renewal of their leases, and are not subject to eviction unless there are legally permissible reasons. Tenants have the option to extend their leases for one or two more years. Tenants can use a number of forms developed by the Division of Housing and Community Renewal (DHCR) to make pertinent complaints. After serving the owner with the complaint and gathering evidence, DHCR must issue a formal order that is appealable.

DHCR has the authority to lower rent and impose civil penalties on the owner in cases when a tenant’s rights are infringed. Should you fail to maintain services, your rent may be lowered. If there is an overcharge, the DHCR may impose interest penalties or triple damages that must be paid by the tenant.

Rent Control
Rent control restricts the amount of rent an apartment owner can charge as well as the owner’s ability to evict residents. Additionally, tenants are entitled to certain necessities. Since tenants are regarded as “statutory” tenants, owners are not obligated to provide renewal leases. Tenants can use a number of forms developed by DHCR to file pertinent concerns. After serving the owner with the complaint and gathering proof, DHCR is authorized to issue a written order that is appealable. Rents may be lowered and civil penalties may be imposed by DHCR on the owner in the event that a tenant’s rights are infringed. Reduced rent is a possibility if services are not kept up. When there is an overcharge, the DHCR may determine the legally collectible rent.

Please refer to an attorney for legal advice regarding your specific situation. Additional information can be found at the Department of Homes and Community Renewal.