Feb 6, 2020 - Economy & Business

New York aims to break brokers' stranglehold on rentals

Illustration: Sarah Grillo/Axios

Renting an apartment in New York is ridiculously difficult and expensive, in no small part because of the dominance of a curious tribe of people known as "rental brokers." As the NYT explains, these creatures "have near absolute control over apartment listings, viewing appointments and leases."

Driving the news: In a widely applauded yet unexpected move, New York state regulators have decreed that renters can no longer be charged broker's fees.

How it works: Rental brokers charge astonishing sums for simply bringing together landlords and renters. The standard fee is 15% of the first year's rent, payable up front — that's $6,300 on an apartment costing $3,500 per month.

  • Brokers can charge that much because while they're hired by landlords, the landlords don't pay them, and are therefore price-insensitive. Meanwhile the renters, who have to make the payment, have no real choice but to pay whatever the broker charges.

What's next: If landlords want to continue to use brokers, they will have to pay them themselves. Brokers are warning that the broker's fee will then end up showing up in higher rent. But now landlords will have a clear financial incentive to use cheaper brokers. That should help drive prices down across the industry.

Go deeper: The new housing crisis

Go deeper

Trump country's housing crisis

Data: Joint Center for Housing Studies of Harvard University. Cartogram: Andrew Witherspoon/Axios

The rent is too damn high across huge swaths of conservative states, and it's getting worse fast.

Why it matters: The housing crisis gripping coastal cities has now gone national.

Where American city-dwellers want to move

Photo: Smith Collection/Gado/Getty Images

A fascinating new project from the rental search platform Apartment List pulls together piles of data to show where renters in every U.S. metro are moving to and from.

The big picture: Americans are moving at the lowest rates since the Census Bureau began tracking domestic relocations in 1947. Fewer than 10% of Americans moved to new places in 2018-2019.

Go deeperArrowJan 29, 2020

The new housing crisis

Illustration: Sarah Grillo/Axios

Rising house prices don't cause lenders to lose money, or economies to implode. But the bottom rung of the housing ladder has now ascended beyond the grasp of millions of Americans, regardless of whether they want to rent or buy.

Why it matters: When house prices fall too much, the rich and powerful lose money. That, in turn, means central banks around the world will swing into action to try to save the economy. When home prices rise too much, on the other hand, there's no such urgency on the part of policymakers.