REBNY Lawsuit Presents an Opportunity to Overturn the Problematic FARE Act

If you want to avoid further deterioration of the housing market in Gotham, it’s time to support the Real Estate Board of New York’s lawsuit aimed at preventing a law that forces landlords to pay brokers’ fees.

The federal lawsuit asserts that the City Council’s mandate infringes on state law and brokers’ rights to free speech; however, the law itself is exceedingly harmful.

The FARE Act places the responsibility for broker fees on whoever hires the broker (predominantly landlords); it passed through the far-left council with a remarkable veto-proof margin of 42-8 last month—once again highlighting the progressives’ apparent failure to grasp basic cause and effect.

REBNY contends that the city lacks the jurisdiction to supersede existing state laws governing real-estate brokers, but the true consequences of the FARE Act present an even greater issue.

This ill-conceived law will worsen conditions for New Yorkers, despite progressive claims that it benefits renters.

Before the introduction of FARE, countless brokers could list a property online; the broker who successfully secured a tenant would then collect the fee.

Over half of the listings on platforms like Zillow and StreetEasy utilize this method.

However, the FARE law mandates that any agent marketing the property online must be employed (and compensated) by the landlord—resulting in drastically fewer apartment listings and creating a more difficult search for renters, while landlords are left struggling to fill vacant units.

REBNY’s lawsuit alleges that this effectively hampers brokers’ freedom of speech, breaching their First Amendment rights, and violates contract law by nullifying any existing agreements where a broker is authorized by the landlord to seek tenant payment.

The law is also certain to drive up rental costs.

While progressives often demonize landlords as greedy entities hoarding wealth, many New York landlords possess merely one or two buildings and operate on thin profit margins: They cannot simply absorb new expenses.

Placing the burden of brokers’ fees on landlords won’t eliminate the costs; rather, landlords will inevitably increase rents to compensate for these expenses.

Some landlords may even withdraw their units from the market or exit the rental business entirely, selling to the very large corporations that progressives criticize.

The FARE Act is poised to wreak havoc on all parties involved in the (already convoluted) housing market in New York City: landlords, brokers, and renters.

Moreover, its legal validity is questionable.

The judge presiding over REBNY’s lawsuit should dismiss it permanently.