A Win for Renters

With over 2,300,000 renters in New York City, it’s a good bet most of them had to pay exorbitant brokers’ fees to land their apartments. Those brokers charged a fortune – natch, because with a 2023 city rental vacancy rate of 1.41 percent, they could set their fees sky high. But on November 13, the city council approved a new law with a veto-proof majority to make landlords fork over those fees. According to the New York Times that day, “the fee is typically more than one month’s rent, and right now the median rent is roughly $3,4000.” So up-front costs to get a new place in Gotham were often over $10,000. How ‘bout them apples?

Make no mistake: this new law protects tenants, as the screams of outrage from their predators attest. Those screams were duly recorded in a second Times article November 16, though the article did note that “New York City is one of only a few cities in the United States where tenants pay for a broker they do not hire themselves.” That didn’t stop said brokers from absurdly alleging to the newspaper that this win for renters will in fact harm them and from one agent shedding crocodile tears that “it’s an absolute mess for tenants.” Why? Because, he claims rents may rise, so tenants will avoid those supposedly life-saving brokers and thus “have to do all the dirty work themselves.” Of course, he sagaciously omits that those altruistic brokers will therefore lose their fees.

Outside the big apple, how agents get paid saw changes this year. “A group of homeowners in Missouri successfully sued the National Association of Realtors,” the Times reports, “and some of the nation’s largest brokerages.” This ruling and the new city council act have engendered much frantic hyperbole from brokers: “It feels like we’re under attack,” one hyperventilated to the Times. “I feel like people are overlooking what we actually do on a daily basis.” Yeah, like gouge them for thousands of dollars.

These brokers shrieking and tearing their hair also like to preen over how they “suppress” rents and how this new law means those rents will rise. They might, maybe, in an alternate universe run by real estate moguls and their fixers. And that’s a big maybe. NYC councilman Chi Osse, who sponsored the bill, views it differently: “It will place downward pressure on rents…As tenants will be free to leave their current unit without encountering a large forced broker fee in a new unit, they can negotiate for better terms.” The Times even quoted one broker who fully agreed. So wiping out brokers’ fees for tenants does NOT necessarily lead in a straight line to higher rents, those middlemen’s mendacious howls of dissent notwithstanding.

And at a time when credit card debt soared to a record $1.7 trillion, tenants NEED cheaper rents. Credit card debt jumped 8.1 percent over the past year, while overall, according to the Washington Post November 15, “mortgages, auto and student loans and credit card debt – increased by $147 billion to $17.94 trillion.” Rents skyrocketed under Joe “War Is My Legacy” Biden, but to be fair, they rose rapidly for decades before he fulfilled his lifelong dream of reaching the oval office and embroiling the U.S. in a potentially nuclear war with Russia. My point? He’s not concerned with high rents or average Americans dispossessed by inflation, due to his sanctions and the billions he so profligately ships to his proxy war. Nevertheless, whether he cares or not, household expenses are exploding. And they could get worse, as Trump’s likely head of Medicare, Mehmet Oz, may want to ditch it. Fortunately, he has indicated interest in at least hanging on to Medicare Advantage. That’s not great, but it’s better than nothing.

But if Oz entirely erases Medicare, the average elderly prole can just forget going to the doctor. And if he or she has a car accident or stroke, they better avoid the hospital, too. Your ordinary citizen can’t afford American medicine, because it’s a bankruptcy mill: hospital stays and medical treatments – you know, frivolous stuff like chemo – boot Americans into destitution tout de suite and in large numbers. If Oz really goes this route, those numbers will balloon, with lots of impoverished senior citizens.

So the 50 percent of Americans who can’t afford a sudden $1000 expense are looking down the barrel of a gun: the cost of medicine could skyrocket and rents are not affordable. That’s why an occasional good law, like the one on brokers’ fees in New York City, is a breath of fresh air. So, not surprisingly, mayor Eric Adams has “concerns” about it. Of course he does. He’s closely linked to real estate bigwigs, though he claims this bill will hurt small landlords.

“The bill requires whoever hires a broker to pay the fee. Landlords and their agents would be required to disclose fees in listings and rental agreements…” the Times reported November 13. “The new rules apply to market-rate rentals and to rent-stabilized apartments.” Now there’s something most Americans can only dream about: rent stabilization. Or, even farther beyond their wildest fantasies – rent control. A better, more enlightened era put both in place in New York City, and the real estate industry has denounced and chipped away at them ever since. But elsewhere in Amurica, no such sanity exists. The miserable realm of providing and finding shelter abides by the law of the jungle, which is why we have over three million homeless people and roughly 15 million empty homes – empty because even uninhabited they are a good investment for the wealthy few who need some place to park excess cash.

When domiciles become these sorts of investments, that boosts rents, because it squeezes actual, available, affordable housing out of the market. And as rents soar, hordes of people lose a roof over their heads. If Trump really wants to help solve this crisis, the federal government should back building about seven million townhomes. Those are cheaper than single family dwellings, even though mortgage rates remain high. In other words, the millions of people who can’t afford a starter home, maybe could purchase a townhome. That, in turn, would free up apartments for those too strapped for cash to buy. If apartment vacancy rates rose, rents just might fall.

The other advantage of building townhouses is that they cost less to construct than big apartment buildings, and also less than tracts of unattached dwellings. The Washington Post put forth this notion of mass construction of townhomes October 21, as a way to plug the hole in middle class housing. It would have ripple effects, benefitting those drowning in the lower economic depths, as it saves Americans from the pernicious plutocratic practice of snapping up abodes and then leaving them empty.

Of course, this townhouse remedy does not apply to a dense, already built-up city like New York. But there they’ve evidently got some decent people on the city council, politicians looking out for their constituents instead of their donors – now there’s something you don’t see every day, certainly not in our bought and paid-for inside the Beltway government. But with any luck, real-estate tycoon Trump will find a mass housing construction plan of interest when he moves to the white house. Voters would be grateful, because everybody knows – the American housing mess is a national scandal.

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