The newly implemented FARE Act in New York City was created to reduce the high upfront costs of renting an apartment. By shifting the responsibility for broker fees onto the landlord when the agent represents the landlord, the law has helped tenants avoid paying thousands of dollars before move-in. For many, it has provided immediate financial relief in an already expensive rental market.
But the law has also brought a new wave of unintended consequences. Many landlords have responded by increasing monthly rent prices to offset their new costs. Since a large portion of landlords require applicants to earn at least 40 times the monthly rent, qualifying for apartments has become more difficult for many renters. Those with modest incomes or less traditional sources of income are now struggling to meet the stricter financial requirements.
Inventory is also down. Since the FARE Act took effect, many rental listings have disappeared from popular sites. Some landlords and brokerages are pulling back on online advertising while they wait to see how the law is enforced. This has created a tighter rental market with fewer visible options and increased competition.
It is important to note that the FARE Act does not ban broker fees altogether. Tenants are still allowed to hire their own agent and pay that agent’s fee. However, this only applies when the broker is working solely on behalf of the tenant. The fee cannot be passed along to the renter when the agent is representing the landlord. While this option remains, many agents are hesitant to lock renters into exclusive contracts similar to those used in buyer agency agreements. Renters often prefer flexibility and do not want to feel tied down during the search process.
At Amo Realty, the shift has been immediate. In just the first week of the FARE Act going into effect, the company has seen a spike in renters looking for guidance. NYC renter inquiries and traffic to Amorealty.com and NewYorkCityApartments.com have risen sharply as tenants search for help navigating a market with higher rents and fewer listings.
While the FARE Act has eased upfront expenses for many New Yorkers, it has also added layers of complexity to an already competitive rental market.
What Economists Expect Moving Forward
Economists offer a cautiously optimistic perspective that the FARE Act is a net benefit for renters, despite initial ripple effects such as rent increases. Early estimates show that the law could cut upfront moving costs by over 40 percent. This change allows renters to preserve cash and improve short-term financial stability, which is especially helpful in a city where affordability is a constant concern.
However, some economists acknowledge that rents for no-fee apartments have already risen slightly more than those in the rest of the market. While landlords are not uniformly passing the cost to tenants, there is concern that these increased monthly rents may become standard over time as landlords build the expense of broker fees into the rental price.
Some analysts expect rents to climb in the short term as landlords test how much the market can bear. Others believe rent levels will stabilize as competition returns and tenants push back against higher prices. In either case, experts agree that long-term rental trends will still be driven more by supply, demand, and broader economic conditions than by one law alone.
Despite the early adjustments and tighter inventory, most economists agree the FARE Act promotes transparency and reduces barriers to housing access. Renters now have greater clarity over who represents their interests and more control over whether or not to hire an agent. The reduction in upfront fees, often equal to one month’s rent or 15% of the yearly rent, can make a significant difference. It especially makes a difference for first-time renters or those without large cash reserves.
While the FARE Act brings real benefits, including lowering upfront costs, it also reshapes the rental landscape with consequences like rent increases and reduced visible inventory.