Just days after New York City implemented the FARE Act banning broker fees for tenants, rents have surged by a staggering 15 percent. What was hailed as a victory for renters has quickly sparked a backlash, with landlords reacting by raising asking prices. The new law, intended to bring transparency and affordability, has led to unintended consequences, including a sharp drop in listings and a rise in workarounds by brokers and landlords. The market response has frustrated renters and experts alike, leaving many questioning whether the law has helped or hurt those it aimed to protect.

Law Removes Broker Fees, Landlords React Fast

The FARE Act, which took effect on June 11, prohibits property owner–hired brokers from charging fees to renters. It also requires that any costs tenants must pay be clearly stated in listings and rental agreements. While the law was meant to protect tenants from surprise costs, landlords quickly responded by raising rents across the board to offset what they see as lost revenue.

Rent Spikes Hit 15 Percent in One Week

According to a report from UrbanDigs, the average rent in New York City rose from $4,750 to $5,500 in just one week after the law took effect. John Walkup, co-founder of UrbanDigs, described the market’s reaction as “sharp” and noted that landlords are likely rolling broker fees into monthly rents. This results in tenants paying more over time than they would have with a one-time fee.

Listings Drop by 30 Percent Overnight

The impact on the rental market was immediate. Listings on popular real estate site StreetEasy dropped by around 2,000 on June 11 alone. UrbanDigs also reported that available apartment listings fell by 30 percent overall. Brokers and landlords are believed to be holding listings back to avoid the restrictions imposed by the FARE Act.

The Rise of the ‘Shadow Market’

Real estate professionals have raised concerns about a growing “shadow market,” where apartments are no longer publicly listed. This makes it harder for renters to find available units and allows landlords and brokers to negotiate fees behind closed doors. Jason Haber, a broker and co-founder of the American Real Estate Association, said apartment hunting now feels like returning to the 1990s, relying on insider contacts rather than open listings.

Renters Face Price Manipulation

Since the law’s passage, renters have shared numerous stories about brokers offering two-tiered pricing. In some cases, landlords have proposed lower rents if the tenant pays the broker fee directly, or significantly higher rents if they do not. One Brooklyn apartment was offered at $6,800 with a broker fee or $8,000 without. Such practices violate the new law but are reportedly still happening.

Tenants Ask to Pay Fees to Avoid Higher Rent

Ironically, some renters now say they would rather pay the broker fee to avoid inflated rents. Bruno Ricciotti, principal at Bond New York, said his firm has been flooded with requests from prospective tenants asking to pay the broker commission in exchange for older, lower rent levels. However, under the new law, offering this option is illegal, even if both parties agree.

Hidden Costs Replace Transparent Fees

While broker fees were once visible and negotiable, the new landscape has shifted those costs into monthly rent, making them harder to detect. Walkup noted that transferring the fee into rent may be “less direct, but very real.” For renters, this means the total cost of renting over time may now exceed what they would have paid upfront under the old system.

Renters Express Frustration and Confusion

Many tenants say the law has created more problems than it solved. Kebenae Tadesse, who has been searching for a Brooklyn studio, said brokers openly admit the fees are being folded into the rent. “It’s so frustrating,” she said, adding that the process feels more confusing and expensive than before. Others echo her concerns, saying the promise of savings has turned into unexpected costs.