Latest news with #RealEstateBoardofNewYork
Mint
27-06-2025
- Business
- Mint
NYC developers gripped by hysteria after Mamdani's sudden rise
New York City's developers and landlords are in a mad scramble to block from City Hall the socialist who wants to freeze rent. Zohran Mamdani struck fear across the business community after his Tuesday night surprise victory against former New York Gov. Andrew Cuomo, who conceded in the city's Democratic primary for mayor. In the days since, phones across the real-estate industry are ringing almost nonstop as panicked executives scrape together their contingency plans. Most want to back the more business-friendly incumbent, Eric Adams, who is running for mayor as an independent, or draft another candidate for November's general election. Others are making preparations in the event he does become mayor, like lobbying state lawmakers to serve as a brake on parts of Mamdani's housing agenda. Some say they will simply flee the city if that happens. 'We've got to do something," said Greg Kraut, chief executive of New York office landlord KPG Funds. The real estate hysteria is an early sign of just how hard Mamdani will have to work to win over New York's economic establishment, while maintaining the support of young, economically frustrated voters who fueled his primary campaign. Financiers and other business people in the city fear that Mamdani, a democratic socialist, will be antagonistic. But few find themselves as directly in his crosshairs as apartment building owners. Mamdani is pushing for a host of housing changes to try to ease costs for renters. While he seems to have softened his stance toward working with private developers more recently, at the top of his list is still a controversial rent freeze on the city's roughly 1 million rent-stabilized apartments. Landlords say this would suffocate their operating revenue and kill new investment to the city, even though the law wouldn't apply to newly constructed housing units. They are already dealing with the pressure of a 2019 law that capped rent increases on stabilized units and is projected to cost the city up to $2 billion in property tax losses annually, according to the Real Estate Board of New York, the industry trade association. A Mamdani administration 'would be the death penalty for the city," said Danny Fishman, CEO of real-estate investment firm Gaia Real Estate. 'And it would be the best thing to happen to Miami and Palm Beach since Covid." Fishman said he is exiting the New York market and expanding in Florida. Miami real-estate agent Danny Hertzberg said he received nonstop calls and texts from New York clients in the finance and real estate community after Mamdani's victory. 'I have active clients who have been on the fence about leaving New York," said Hertzberg, founding member of the Jills Zeder Group. 'They're calling me to say that this may be the straw that broke the camel's back." The rent freeze proposal has cast a shadow over Mamdani's other housing plans that tend to be favored by the industry, such as expediting land-use reviews, opening public land for development and rezoning for more residential projects. Developers are also thinking about how to get Mamdani to moderate his platform. Nonprofit developer Bart Mitchell plans to double down on the New York market even if Mamdani is elected. Policies like fast-tracked reviews, reduced parking ratios and more affordable housing resources 'are exactly the things that make it possible to develop," he said. The city's most recent report about rent-stabilized units says landlords' profit was up 12.1% between 2022 and 2023. Mamdani's rent freeze proposal is already triggering alarm bells in the stock market. Shares of big office owners, like SL Green Realty, BXP and Vornado Realty Trust, plummeted on Wednesday on news of Mamdani's win, though they made up much of those losses on Thursday. Shares of Flagstar Financial, the embattled regional bank with heavy exposure to rent-stabilized multifamily properties in New York, have dropped roughly 5% since last week. Paul Rahimian, chief executive of the private real estate lender Parkview Financial, said his firm may take a more cautious approach in the New York market over the next few months. 'We might think twice" about certain deals there if regulations were to change, he said. Those who want to stay are opening their checkbooks and shopping around for a new candidate to rival Mamdani in the November general election. Kraut of KPG Funds said he plans to set up meetings with Adams and the head of the Republican Party to find 'another viable path" instead of Mamdani. 'You're going to see a ton of money coming into the race from all levels literally against this one person," said Kraut. If Mamdani wins, the real-estate industry will take the fight against policies like tax increases to state lawmakers in Albany, said New York developer Scott Rechler. 'We would actively work to make sure the state was muscular in protecting the long-term values and vitality of the city," he said. Kenny Burgos, the head of the New York Apartment Association, one of the city's largest landlord trade groups, said he is turning to social media. He spends hours each day making TikTok and Instagram videos and going on radio and television shows to speak out against harsh rent regulations. He also started his own podcast. 'I've taken the approach that I've found to be most successful," said Burgos, who went to high school with Mamdani and served in the state assembly with him. 'It's social media." Real estate leaders held an emergency postmortem on Wednesday organized by New York City power broker Kathryn Wylde to discuss supporting another candidate in the November election. About 15 people participated representing some of the city's largest real estate and financial businesses, Wylde said. The room was deeply worried about the prospect of Mamdani as mayor but no decision was made on how to proceed, according to a person at the meeting. Not everyone in real estate is in crisis mode. Some are open to finding common ground. 'There's an opportunity to do effective real estate deals with Mamdani," said Travis Terry, a consultant who in part advises real-estate developers on how to work with the New York City government. 'The key thing will be who he surrounds himself with." Write to Rebecca Picciotto at and Peter Grant at
Business Times
13-06-2025
- Business
- Business Times
New York real estate industry appeals broker-fee case ruling
[NEW YORK] Real estate groups are challenging a ruling by a federal judge that allowed New York City to begin enforcing a new law requiring landlords, rather than their tenants, to pay fees for hiring listing brokers. US District Judge Ronnie Abrams on Tuesday (Jun10) denied a request by the Real Estate Board of New York, the New York State Association of Realtors and others to pause the law while their lawsuit proceeds. The ruling was another setback for the industry's legal fight against the measure, which went into effect on Wednesday (Jun 11). The groups on Thursday filed an appeal of Abrams' decision to the US Court of Appeals for the Second Circuit. The City Council adopted the measure in November to end the longstanding practice of tenants being forced to pay costs incurred by landlords to hire the brokers who list their properties, which can add thousands of dollars to housing costs. The real estate industry argued the new law branded brokers as villains and would force landlords to raise rents to cover the costs of hiring them. New York City renters who settle on apartments that have broker fees pay an average of almost US$13,000 to secure the keys to a property, which frequently includes thousands of dollars in fees for brokers hired by landlords to secure tenants, according to an analysis by StreetEasy released last year. Roughly 40 per cent to 50 per cent of listings on StreetEasy have required lease signers to pay the commissions of agents hired by their new landlords, which have typically ranged from one month's rent to 15 per cent of the annual bill. The Real Estate Board contends that the law, known as Fairness in Apartment Rental Expenses Act, or FARE Act, interferes with exclusive agreements that landlords sign with brokers to list their properties and find tenants, in violation of the Constitution's bar against state laws impairing private contracts. It also argues the law violates the free-speech rights of landlords and brokers who publish real estate listings and then seek to receive compensation from tenants for the cost of the listing service. The industry's lawsuit alleges that the law will make rent-stabilised apartments too costly to operate and force landlords to raise rents to cover the cost of broker fees. The industry says tenants usually pay less over the life of a lease when commissions are paid separately, and that some are already refusing to pay broker fees even though the law hasn't taken effect yet. A state-approved broker-fee ban was briefly in place in February 2020, just before the first Covid lockdown brought the rental market to a near halt. By the time renter demand began rising the next year, a court had struck down the state law and brokers were eager to capitalise on what quickly became a very competitive market where prices have continued to rise. The law could dramatically change the dynamics of the city's highly competitive rental market, where prices have soared since pandemic restrictions began easing in 2021. The median cost of new Manhattan leases was US$4,571 in May, reaching another all-time high, according to appraiser Miller Samuel and Douglas Elliman. Prices have also set records in the outer boroughs. BLOOMBERG
Hindustan Times
13-06-2025
- Business
- Hindustan Times
New York real estate industry appeals broker-fee case ruling
(Bloomberg) -- Real estate groups are challenging a ruling by a federal judge that allowed New York City to begin enforcing a new law requiring landlords, rather than their tenants, to pay fees for hiring listing brokers. US District Judge Ronnie Abrams on June 10 denied a request by the Real Estate Board of New York, the New York State Association of Realtors and others to pause the law while their lawsuit proceeds. The ruling was another setback for the industry's legal fight against the measure, which went into effect on June 11. The groups on June 12 filed an appeal of Abrams' decision to the US Court of Appeals for the Second Circuit. The City Council adopted the measure in November to end the longstanding practice of tenants being forced to pay costs incurred by landlords to hire the brokers who list their properties, which can add thousands of dollars to housing costs. The real estate industry argued the new law branded brokers as villains and would force landlords to raise rents to cover the costs of hiring them. New York City renters who settle on apartments that have broker fees pay an average of almost $13,000 to secure the keys to a property, which frequently includes thousands of dollars in fees for brokers hired by landlords to secure tenants, according to an analysis by StreetEasy released last year. Roughly 40% to 50% of listings on StreetEasy have required lease signers to pay the commissions of agents hired by their new landlords, which have typically ranged from one month's rent to 15% of the annual bill. The Real Estate Board contends that the law, known as Fairness in Apartment Rental Expenses Act, or FARE Act, interferes with exclusive agreements that landlords sign with brokers to list their properties and find tenants, in violation of the Constitution's bar against state laws impairing private contracts. It also argues the law violates the free-speech rights of landlords and brokers who publish real estate listings and then seek to receive compensation from tenants for the cost of the listing service. The industry's lawsuit alleges that the law will make rent-stabilized apartments too costly to operate and force landlords to raise rents to cover the cost of broker fees. The industry says tenants usually pay less over the life of a lease when commissions are paid separately, and that some are already refusing to pay broker fees even though the law hasn't taken effect yet. The law could dramatically change the dynamics of the city's highly competitive rental market, where prices have soared since pandemic restrictions began easing in 2021. The median cost of new Manhattan leases was $4,571 in May, reaching another all-time high, according to appraiser Miller Samuel Inc. and Douglas Elliman. Prices have also set records in the outer boroughs. The case is Real Estate Board of New York v City of New York, 24-CV-9678, US District Court, Southern District of New York (Manhattan). -More stories like this are available on ©2025 Bloomberg L.P.
Yahoo
13-06-2025
- Business
- Yahoo
Renters Face Sneaky Price Hikes in New York City
New York City renters know when it's time to find an apartment, it's always going to be an expensive venture. Even with a new broker-fee ban, it looks like renting will still be a costly option. The Fairness in Apartment Rental Expenses Act (FARE Act) went into effect on June 11 and does not allow a landlord's real estate agent to charge a fee to the tenants which was often 12-15 percent of the annual rent. That law will greatly reduce the costs for people to move into an apartment, but Bloomberg is pointing out how landlords are trying to find other ways to pass the costs onto their tenants by rolling it into their rent. On average, it costs a person $12,942 to move into a new apartment with a security deposit, first month's rent, and the dreaded broker fees, per StreetEasy. Now, that price is expected to average $7,537, it is a significant relief for those hoping to reside in one of the five boroughs. Still, the Real Estate Board of New York (REBNY) pushed back on the bill, and they are sending a warning to renters. "New Yorkers will soon realize the negative impacts of the FARE Act when listings become scarce, and rents rise. We will continue to litigate this case as well as explore our avenues for appeal," REBNY President James Whelan said, per ABC7 New York, in court after a judge denied their attempt to stop the FARE Act. History disagrees with REBNY though. Apartments with a broker's fee had "an average increase in rent around 5.3% compared to the rest of the market, which saw an increase of 4.6%, according to StreetEasy Senior Economist Kenny Lee. REBNY will continue to appeal the judge's ruling, but people are celebrating the financial relief in the housing sector. Living in New York City has always come with a premium price, but the FARE Act will make a Face Sneaky Price Hikes in New York City first appeared on Men's Journal on Jun 12, 2025
New York Post
10-06-2025
- Business
- New York Post
Apartment broker fee ban to begin Wednesday after federal judge nixes suit to stop the new NYC law
The city's new law banning broker fees will go into effect tomorrow, after a federal judge shot down a real estate lobby lawsuit to block the ban. Judge Ronnie Abrams ruled Tuesday that a federal lawsuit challenging the Fairness in Apartment Rental Expenses Act was mostly rooted in policy disagreements — not constitutional questions. 3 A new law banning broker fees starts tomorrow after a federal judge tossed a last-minute effort to pause the ban. Helayne Seidman 'Plaintiffs' discontentment with the Act, however, stems not from its effects on their constitutional rights, but from a fundamental disagreement with its underlying policy,' Abrams ruled. Her decision tossed all but one claim from the lawsuit, and denied a request to pause the law as the case plays out. The FARE Act — passed in City Council with a veto-proof majority of 42-8 on Nov. 13 — prohibits agents representing property owners from charging prospective renters a 'broker fee.' 3 The Real Estate Board of New York and other groups claimed that banning broker fees would 'destroy' the rental market, according to their suit. Helayne Seidman The lawsuit, filed a month later by the Real Estate Board of New York, a broker's association and various property groups, claimed that banning broker fees would 'destroy' the rental market. Abrams said the suit was asking 'the court to act as a 'superlegislature'' to nix laws they disagree with. 'The court declines that invitation,' Abrams wrote, adding that the 'remedy is through the political process, not in court.' 3 Judge Ronnie Abrams said the suit was asking 'the court to act as a 'superlegislature'' to nix laws they disagree with. Kbarnofsky/Wikipedia But while the judge said the act could result in higher prices for landlords, they were better positioned to absorb the cost by increasing rents. 'Tenants, by contrast, cannot pass the cost of brokers' fees to landlords,' she wrote. REBNY President James Whelan said he was 'disappointed' that their motion to pause the law was kiboshed. 'New Yorkers will soon realize the negative impacts of the FARE Act when listings become scarce, and rents rise. We will continue to litigate this case as well as explore our avenues for appeal.'
