A bill that would largely shift the burden of paying broker fees from renters to landlords has locked in support from a majority of the City Council — a development that comes after an influential real estate group tried to tank the measure via a backroom deal with the head of a key Council committee, according to four government sources familiar with the matter.
The bill, introduced in June by left-leaning Brooklyn Councilman Chi Ossé, would not ban broker fees outright. Rather, it would require that whoever hires a broker pays for his or her fees.
That’s a change from current rules, which allow landlords to hire brokers and then require renters to pay for them. There are no caps on what brokers can charge for their services, and their fees and commissions often range in the thousands of dollars.
On Wednesday, Ossé — whose legislation is dubbed the FARE Act — told the Daily News that 25 of his Democratic colleagues in the Council have signed up as co-sponsors on his bill, reaching the simple majority threshold of support required to pass it in a Council floor vote.
The lefty lawmaker said the current system “makes no sense” and noted New York is an outlier among major U.S. cities in allowing landlords to shift broker costs onto tenants.
“Too often, families are forced to pay for a service they did not contract,” he said. “The FARE Act is profoundly necessary as it is shockingly simple: ‘You get what you pay for, and you pay for what you get.'”
Ossé’s announcement comes as the Real Estate Board of New York, which represents hundreds of landlord and broker firms in the city, is in the midst of a full-court press to advocate against the bill, citing concerns that it would be bad for both renters and brokers.
In a previously unknown wrinkle, the politically powerful board struck a private deal with Bronx Councilwoman Marjorie Velazquez earlier this summer where she committed to block the bill from being heard in the Consumer and Worker Protection Committee, which she heads, according to the sources familiar with the discussions who spoke on condition of anonymity for fear of angering Velazquez. REBNY has had a warm relationship for years with Velazquez, who faces a fierce Republican challenger in the November general election.
“She gave [REBNY] basically her assurances that she would slow down or stop it,” one of the sources told The News of the bill.
If the legislation isn’t scheduled for a committee hearing, it can’t be put up for a vote, meaning it “dies” in the committee, the sources said.
Velazquez, a centrist Democrat who represents parts of the eastern Bronx rich with homeowners, disputed the notion that she made a “deal” with REBNY. However, she did not dispute speaking with the group’s reps about the Ossé bill and confirmed she’s not looking to hold a hearing on it any time soon.
“That’s a good question. I’ll look at my calendar, but it’s not this year,” she told The News after an unrelated news conference in the Bronx Wednesday when asked whether her committee will hear the legislation.
Asked what her relationship is like with Ossé, she said: “We’re good friends.”
Ryan Monell, vice president of government affairs at REBNY, would not comment specifically on the board’s conversations with Velazquez, but said: “REBNY has, and will continue to, engage thousands of agents to contact all City Council members to oppose this deeply problematic bill.”
REBNY has extensive political ties to a number of Council members, and Velazquez is among the group’s top allies.
Records filed with the city clerk’s office show REBNY raised $11,500 for Velazquez’s reelection campaign between July and August.
While raising money for her campaign, REBNY’s in-house government relations firm was also lobbying Velazquez and a number of her colleagues, including Council Speaker Adrienne Adams (D-Queens), on opposing Ossé’s bill, records show.
The board has argued Ossé’s legislation would be bad for tenants because landlords would shift the cost of broker fees onto renters anyway by jacking up rents. The board has also said it would make it too hard for brokers to make a buck.
In addition to its backroom moves, the board sent an email to dozens of Council members earlier this summer urging them to vote against the bill — prompting Ossé last week to disseminate a “corrected” version of the message to his colleagues rebutting its points, as first reported by The Real Deal.
Ossé has contended that, in addition to helping renters, his bill would benefit brokers, especially those hired by tenants.
As a result of the resistance from Velazquez, Ossé is attempting to get his bill heard in the Housing and Buildings Committee instead, according to Council insiders.
Switching the bill’s committee assignment would likely require support from Speaker Adams. It was not clear Wednesday if the speaker would back such a move.
A spokesman for the speaker’s office would only say that “as with every bill, it will go through the legislative process.”
Ossé declined to comment on his push to move the bill into the Housing Committee.
Should Ossé’s measure pass the Council, it would likely still need Mayor Adams’ support to become law. A spokesman for Adams said Wednesday his office is reviewing the bill.
With Michael Gartland
