Brokers Are Ready to Fight for Their Fees

Photo: Alex Kent

The Real Estate Board of New York had threatened that 1,500 brokers would show up to rally against City Councilmember Chi Ossé’s broker’s fee bill and sure enough, they did, turning City Hall Park into a sea of blazers and Corcoran pullovers on Wednesday morning. They held up “Agents Are Tenants Too” signs and chanted “No!” It had the air of a networking mixer, except one where everyone was incredibly mad. What Ossé is proposing — requiring the person who hired the broker to pay the broker’s fee, rather than the tenant — wasn’t just unfair, it was absurd, agents told me. “I’ll run on no more broker’s fees,” Paul Magyar, a broker at Mirador Real Estate, said. “It’s like, I’ll run on free ice cream.”

This was Ossé’s second go at reforming New York’s outlier system that often requires tenants to pay what can be more than a month’s rent just to get in the door of an apartment. (According to StreetEasy, the average New Yorker spends $10,454 in upfront moving costs, the largest portion of which is broker’s fees.) When the bill was first introduced last year, it died without a vote — but this year, it’s got some momentum. In response, the real-estate industry has gone a little apoplectic. “I don’t know who he’s even trying to help,” Dana Goldman, a broker at Douglas Elliman, said of Ossé. “I think he’s just trying to make a scene.” The substance of the bill was troubling, but the tenor of the discourse around it was even more upsetting, others told me. They insisted that anyone who thought their jobs were pointless, or worse, parasitic, had it wrong. “It’s pretty insulting,” Janna Raskopf, another Elliman broker, told me. “We don’t just open doors.” Others called the problem of their reputation a matter of a few bad apples: “The barrier to enter the industry is very low so many people doing it aren’t trained properly,” Jed, a realtor at City Connections Realty, told me, adding that this was just “a very small percentage” of brokers. (At Ossé’s competing rally, just a few hundred feet away, tenants shared stories of no-shows, bait-and-switch listings, and broker-initiated bidding wars. “Broker’s fees are expensive, it makes it difficult to move apartments, and it also makes me talk to brokers, which is honestly terrible,” one tenant in support of the bill told me.)

Chi Ossé heading up the rally in support of the bill. Photo: Alex Kent

Photo: Alex Kent

As the rally portion of the morning’s events concluded, people began angling to get inside the chambers to testify. “Brokers, get in!” one woman in an Elliman shirt shouted as security guards started admitting people from the line, which wrapped around the block. Once inside, the crowd remained worked up, despite the instruction from City Councilmember Julie Menin, chair of the Department of Consumer and Worker Protection, to have “decorum.” There were all the cheers and boos you might expect, and at one point, a slew of brokers gave the thumbs-down to a City Council member speaking in favor of the bill. Gary Malin, chief operating officer of the Corcoran Group, argued that the bill was “an attack on the brokerage community.”

But not all the brokers present were against the reform effort. Anna Klenkar, a broker at Sotheby’s who has written about why she supports the bill, said that REBNY had contacted her manager when they found out she was going to testify. “It feels less like we’re protecting ourselves and more like we’re protecting landlords, whom REBNY also represents,” Klenkar said. Which, while an unpopular position in the industry, might explain some of the fervor among the bill’s opponents. If landlords have to pay the fees, many of the realtors I talked to feared they just … won’t. Part of the reason the current system exists as it does is because landlords don’t want to pay broker’s fees, either. They just have the leverage to get what they want. Which at least some of the brokers I spoke to seemed to acknowledge. “The fact is we’re able to charge up to 15 percent,” one told me, “but with landlords they’re going to end up supplying just a month’s rent, reducing our fee.”