What is the FARE Act in New York City?

The Fairness in Apartment Rental Expenses Act took effect on June 11, 2025. The core principle is that whoever hires the broker pays the broker. If a landlord engages an agent to market and lease their apartment, the landlord pays the fee. Tenants cannot be required to pay a broker they did not hire. Before the law, the standard practice was for landlords to hire a broker and pass that fee to the incoming tenant, typically 12 to 15% of annual rent. On a $5,000 per month apartment that meant a tenant arriving at lease signing with $9,000 in broker fees on top of first month's rent and a security deposit.

Did the FARE Act cause rents to go up in Brooklyn?

Yes, modestly. Brooklyn median rent was $4,100 in both September and October 2025, up 3% to 4% year-over-year, roughly in line with where rents had already been trending before the law took effect. The more notable shift was in leasing volume, which posted eight consecutive months of annual gains after the law took effect. The financial burden did not disappear for tenants. It shifted from a large lump sum at move-in to a higher monthly rent over time.

Does the FARE Act hurt Brooklyn landlords financially?

Not if understood correctly. A landlord with an apartment renting for $5,000 per month who reprices to $5,500 to offset the broker fee they now pay will collect approximately $215,925 over three years. Subtract the $9,000 broker fee and the net is $206,925. Under the old system, the same landlord would have collected $196,289 over the same period. That is $10,636 more income over three years. The longer the tenant stays, the better the math gets.

Should Brooklyn landlords self-manage their rentals to avoid the broker fee?

Rarely. A segment of landlords responded to the FARE Act by deciding to rent their apartments themselves and avoid the fee entirely. Many have discovered that pricing, marketing, showing, screening, and negotiating a lease is more time-consuming and consequential than it looks. One bad tenant costs far more than one broker fee in lost rent, legal fees, repairs, and vacancy. The rent achieved on day one is the number everything else compounds from. A broker who knows the market and generates real competition among qualified applicants will get a higher starting rent than most landlords achieve on their own.

The FARE Act Is One Year Old. Are Tenants Better Off?

May 5

Written By Craig Yoskowitz

The Results Are In

Last June, a new law took effect in New York City that shifted the rental broker fee from tenants to landlords. The real estate industry spent years fighting it. Landlords braced for the hit. Tenant advocates declared a long-overdue victory. Everyone had a position.

Nine months later, the data tells a different story than almost anyone predicted. The people who came out ahead are not the ones who were supposed to.

What The Law Actually Says

The Fairness in Apartment Rental Expenses Act, known as the FARE Act, is simple enough in principle: whoever hires the broker pays the broker. Before June 11, 2025, the standard practice in New York City was for a landlord to hire a broker, find a tenant, and then hand that tenant the bill, typically 12 to 15% of the annual rent. On a $5,000-a-month apartment, that meant arriving at lease signing with $9,000 in broker fees on top of first month's rent and a security deposit. Total move-in cost: north of $19,000, before you bought a single piece of furniture.

The FARE Act ended that. The fee did not disappear. It moved to the landlord.

What happened next is where it gets interesting.

The Spike That Wasn't

The loudest prediction, that rents would spike immediately and dramatically, turned out to be partially right and considerably overstated.

Brooklyn median rent was $4,100 in both September and October 2025, up 3% to 4% year-over-year. Which is to say, roughly what was already happening. Brooklyn rents had been rising annually for four straight years before the FARE Act existed. The increases that followed the law unfolded gradually and mixed with existing demand patterns in ways that make it impossible to pin cleanly on the legislation. The dramatic rent spike everyone predicted essentially did not happen. Rents went up the way they were already going up.

What moved more clearly was leasing volume. September 2025 posted a 10% year-over-year gain in signed leases, a four-year September high. October: up 9%. November: up 22%, the strongest November since 2020. December: up 16%. January 2026: up 13%. February: up 39%, the strongest February since 2021. April: up 25%, a five-year April high.

Eight consecutive months of annual gains in signed leases. Six of them double-digit.

The simplest explanation: removing the upfront broker fee made it easier for renters to commit. A $9,000 check at lease signing is a real obstacle for a lot of people, even people who can afford $5,000 a month. Once that obstacle disappeared, more renters signed leases, and they signed them faster. That is good for landlords. It is also, it should be noted, good for tenants. The ones who actually moved.

Follow The Money

The deeper irony is in the math, and it is the part almost no one was talking about when the law passed.

Take a landlord with an apartment renting for $5,000 a month. Under the old system, the tenant paid a $9,000 broker fee at move-in. The landlord paid nothing. Run that forward over three years at a standard annual increase of 8.79% and the total rent collected comes to $196,289.

Now the FARE Act takes effect. The landlord reprices the apartment to $5,500 to offset the broker fee they now owe. The tenant pays nothing upfront. The landlord pays the one-time $9,000 fee.

At $5,500 in year one, $5,984 in year two, $6,510 in year three: total rent collected comes to $215,925. Subtract the $9,000 broker fee. Net: $206,925.

That is $10,636 more income for the landlord over a 3-year period than the pre-FARE scenario. Same apartment. Same tenant. Same three years.

The broker fee didn’t disappear. It got amortized into the rent, and the landlord keeps the upside every month the tenant stays. The longer the tenancy, the better the math gets. A law that was sold as a tenant protection turned out, for patient and well-advised property owners, to function more like a restructuring that happens to favor them.

There is a footnote worth mentioning: the broker fee is now tax deductible as a business expense for landlords in a way it previously was not, since tenants were the ones paying it before. The after-tax cost of that $9,000 is lower than the headline number. Worth a conversation with your accountant.

Not Everyone Got the Memo

The landlords who struggled in the months after the law took effect were largely the ones who treated it as a cost without treating it as an opportunity to reprice. They absorbed the broker fee without adjusting rent, watched their margins compress, and concluded the FARE Act was as bad as advertised. Some responded by trying to rent their apartments themselves, cutting out the broker entirely to avoid the fee. Many discovered that pricing, marketing, showing, screening, and negotiating a lease is more time-consuming and consequential than it looks from the outside. A bad tenant costs far more than a broker fee ever would, in lost rent, legal fees, repairs, and the vacancy that follows all of it.

The landlords who did well understood that the rent set on day one is the number everything else compounds from, and that getting it right requires knowing what the market will actually bear. In Park Slope, average rent rose from $5,229 in August 2025 to a record $6,049 by April 2026, a 15% annual gain. The apartments reaching those numbers were not getting there by accident.

The Other Side of the Ledger

For tenants, the honest accounting is more complicated.

The financial burden did not disappear. It shifted. Instead of a large lump sum at move-in, renters are paying higher monthly rent over time. For someone who moves every year or two, the post-FARE world may genuinely be better. No $9,000 check on day one, and the higher monthly cost covers a shorter period. For someone who stays four or five years in a market-rate apartment where annual increases compound from a higher base, the total cost may exceed what they would have paid under the old system.

The FARE Act is better for mobile renters. It is most complicated for people who find a place they like and want to stay. The law helped the people it was designed to help, just not in every circumstance and not without tradeoffs.

The Bottom Line

REBNY's legal challenge was rejected at the lower court level and remains on appeal, but the law is fully in effect today. There is no serious indication that will change.

What is clear after nine months is that the FARE Act did not break the Brooklyn rental market. Leasing activity is at multi-year highs. Rents are up but not chaotically so. The apartments sitting vacant are not sitting because the law created some new dysfunction. They are sitting because they are overpriced, which was always the reason apartments sat vacant. The FARE Act did not change that particular law of physics.

What it did change, for landlords who paid attention, was the math.

Work With Craig

I have rented apartments throughout Brownstone Brooklyn for fifteen years. If you own rental property in Brooklyn and want to talk through what your apartment is worth in this market and how to find the right tenant, call me.

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Craig Yoskowitz