It is always a good idea to evaluate proposed legislation based on the facts at hand.
While rhetoric about good intentions can be persuasive, looking at the real impacts of a bill is crucial before formally advancing any new policies.
That is why we are continuing to voice opposition to new legislation designed to put a cap on residential rental commissions.
REBNY has recognized the problematic nature of this bill, Intro 1423, since it was first proposed by City Council Member Keith Powers in February.
While we understand the intention was to assign fiduciary responsibility with the party who contracts a real estate agent, the actual legislative language would mandate that residential brokers and agents be “prevented from collecting fees from prospective tenants that are above the value of one month’s rent.”
Powers has argued that the legislation, “provide[s] a framework to protect consumers.”
Both approaches are worrisome for multiple reasons.
Intro 1423 fails to recognize the extensive expertise required to be a residential real estate agent. Brokers and agents must have a deep understanding of neighborhoods, client needs, and the real estate process.
This expertise requires a great deal of work, including extensive research, incredible amounts of paperwork and, often, the willingness to be on call 24/7.
And because they are paid no salary, an agent’s work is provided in exchange for a commission.
Under the alternative proposal, agents have repeatedly noted that owners would increase rents by the end of the year to account for being unable to pass the cost of the agent’s services onto the renter.
Putting a cap on this commission not only fails to recognize the work of the brokers and agents, but also paints all real estate agents as bad actors within the industry. This is far from true.
Consumers independently opt to work with real estate agents for a variety of reasons. Beyond saving people time and confusion, they are often hired to help negotiate a rent reduction in the lease agreement, ultimately saving renters money in the long run.
If agents are unable to make a living in their profession, many New Yorkers will be less empowered to make informed housing decisions.
Real estate agents across the city — many of whom are REBNY members — have voiced their own concerns about Intro 1423. We have heard firsthand from brokers and agents who are living paycheck to paycheck. This bill would threaten their financial stability.
The thing to remember is that for most agents, commission is not excess income – rather, it is their livelihood.
Living off unconfirmed commissions is already stressful. Now, Intro 1423 could cause even greater financial stress for the very people this bill aims to support.
Since consumers and landlords place a high value on the expertise of brokers and agents, those professionals deserve to be compensated in a way that reflects their value.
And let’s be clear: New York’s housing will not become more affordable by limiting the incomes of these hardworking individuals. Intro 1423 will do nothing more than put hardworking residential real estate agents out of business and drive up rents across the city.
REBNY will continue to advocate strongly against this proposal and we sincerely hope that members of the City Council will hear the voices of New Yorkers who would be negatively impacted by such a deeply flawed bill.
In Other REBNY News:
The 16th Annual Commercial Management Leadership Breakfast will featured Marisa Lago, chair of the City Planning Commission and director of the New York City Department of City Planning, deliver a keynote speech at the “Most Important Breakfast of the Year,” an opportunity to network with and honor outstanding leaders within commercial property management on Thursday, May 30 from 8:30 to 10:00 a.m. at the New York Hilton Midtown.
All awards will be presented, and the Best Engine Room will be announced, at this event. For more information on the honorees and to purchase your table/tickets, visit: go.rebny.com/ComMngmtLeaders16
The 8th Annual Real Estate Finance Cocktail Party hosted REBNY’s Real Estate Finance Committee will be on Tuesday, June 4 from 5:30 to 7:30 p.m. at 230 Fifth Rooftop Lounge.
This event brings together industry lenders, brokers, owners, and service providers of all professional levels. Meet us on the rooftop and gain perspective on the real estate finance and capital markets sector of the industry. To register and learn about available sponsorship opportunities, visit: go.rebny.com/FinanceParty19
21st Annual Retail Deal of the Year Awards Cocktail Party on Tuesday, June 11 from 6:00 to 8:00 p.m. at Convene (117 West 46th Street) will honor this year’s Retail Deal of the Year Award winners in front of their industry peers, mentors, and predecessors.
Join us for networking, cocktails, hors d’oeuvres, and a review of New York City’s most notable retail deals of 2018. Sponsor this event and purchase your tickets at: go.rebny.com/RetailDOY18
Golf & Tennis Outing on Monday, July 29, at North Shore Country Club golf course and tennis courts will feature networking with real estate professionals and competition for trophy prizes.
For sponsorship opportunities and registration, visit: go.rebny.com/golftennis2019.