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What’s With All the No-Fee Apartments in New York City? - The New York Times

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The share of no-fee rental listings in New York City is rising, with 75 to 85 percent of all listings in Manhattan and Brooklyn eschewing broker’s fees during the month of August. That’s a substantial increase from about 50 percent in pre-pandemic January, according to data provided by TextLuke.com, a service that scans apartment listings and makes recommendations based on a user’s requests and responses.

The city’s high broker fees — customarily 15 percent of an apartment’s annual rent, paid by the renter — seemed to be on their way out after New York State passed groundbreaking legislation in June 2019, shifting the responsibility for those fees from the renter to the landlord in many cases. But as the law is being challenged in court, that money is still coming out of renters’ pockets.

So why are no-fee offerings on the rise? It’s the pandemic, of course. The well-documented exodus from the city in recent months has resulted in higher vacancy rates, especially in Manhattan, where the rate reached 4.3 percent in July, the highest in at least 14 years. As a result, landlords are resorting to marketing their units directly, without fees, or cutting their own deals with brokers to cover the fees.

How much could this save you in the real world of Manhattan real estate? For a median-priced one-bedroom Manhattan rental ($3,350 a month in July, according to the Elliman Report), the standard fee would come to $6,030. Add in the other customary charges — first month’s rent and a one-month security deposit — and the outlay required to land that median-priced one-bedroom comes to a whopping $12,730. Without a broker’s fee, it’s a mere $6,700.

In line with high vacancy rates, the laws of supply and demand have caused rents to fall, too. Combine that with more no-fee listings, and 2020 suddenly looks like a golden moment to get a good deal on a rental … if you’re willing to weather the pandemic through a daunting New York City winter.

Share of No-Fee Listings

Apartment listings classified as “no fee” have increased as the pandemic has progressed, based on an examination of all listings for New York City rentals.

January

February

March

April

May

June

July

August

51%

47%

59%

66%

66%

72%

74%

81%

Downtown

Manhattan

62

57

68

76

73

78

79

86

Midtown

Manhattan

57

46

56

60

63

72

75

82

Upper

East Side

66

49

55

59

55

67

67

76

Upper

West Side

47

55

57

71

65

68

73

78

Upper

Manhattan

58

63

68

75

71

75

76

80

Brooklyn

Near

Manhattan

Share of No-Fee Listings

Apartment listings classified as “no fee” have increased as the pandemic has progressed, based on an examination of all listings for New York City rentals.

Jan.

Feb.

Mar.

April

May

June

July

Aug.

Downtown Manhattan

51%

81%

47%

59%

66%

66%

72%

74%

Midtown Manhattan

62

86

57

68

76

73

78

79

Upper East Side

57

82

46

56

60

63

72

75

Upper West Side

66

76

49

55

59

55

67

67

Upper Manhattan

47

78

55

57

71

65

68

73

Brooklyn Near Manhattan

58

63

68

75

71

75

76

80

Downtown Manhattan: Up to 30th Street; Midtown Manhattan: 31st Street to 58th Street; Upper West Side: 59th Street to 110th Street; Upper East Side: 59th Street to 97th Street; Brooklyn Near Manhattan: From Greenpoint, in northwest Brooklyn, extending south, up to and including Red Hook, Park Slope, Crown Heights and Bushwick.

Source: textluke.com

By The New York Times

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