The upfront costs required to move into a new apartment have rose 29% since the pandemic disrupted the city’s housing market.
According to a report from StreetEasy, the average New Yorker doled out $10,454 in upfront costs in 2023, including the first month’s rent in advance, a security deposit and a broker fee.
The calculation didn’t include additional charges such as pet fees, amenity fees and move-in fees.
The company said broker fees can significantly increase upfront rental costs. Only about half of rental listings on the market last year were marked as no-fee, meaning no broker fee, but those tended to have higher monthly rents and were found in luxury or new buildings with upscale amenities like doormen, in-unit laundry and fitness centers.
“Broker fees typically range from one month’s rent to 15 per cent of the annual rent, but can be higher when there is more competition among renters,” StreetEasy stated.
“As the broker fee amount is tied to the rent on the lease, upfront costs have been ballooning along with rising rents since the pandemic began.”
The company said these skyrocketing costs are causing a “lock-in effect” preventing renters from being able to leave their current apartments. This is more pronounced for lower-income New Yorkers.
“Unlike other cities, NYC renters are often required to cover the broker fee even though they did not formally engage the broker on their own prior to touring a unit — rather, the landlord did so,” StreetEasy explained.
“While the agent is ultimately providing services to the landlord, the landlord is able to have the fee passed along to the renter through what is called ‘single agent dual agency,’ whereby the agent is theoretically representing both the landlord and renter in the transaction. “
StreetEasy would like to see legislation passed requiring agents to only get paid when hired by a tenant, and ban the practice of single agent dual agency.
