The proportion of royalty-free rental listings in New York City is increasing. 75 to 85 percent of all listings in Manhattan and Brooklyn forego brokerage fees in August. This is a significant increase of about 50 percent in January before the pandemic. This comes from data from TextLuke.com, a service that scans apartment listings and makes recommendations based on a user's inquiries and responses.
The city's high brokerage fees – typically 15 percent of the tenant's annual rent for an apartment – seemed to be on the way out after New York State passed groundbreaking laws in June 2019, shifting responsibility for those fees from renter to landlord in many cases. However, with the law being challenged in court, that money is still coming out of the tenants' pockets.
Why are free offers increasing? It's the pandemic, of course. The well-documented exodus from the city in recent months has resulted in higher vacancy rates, particularly in Manhattan, where the rate reached 4.3 percent in July, its highest level in at least 14 years. As a result, landlords market their units directly with no fees, or do their own deals with brokers to cover the fees.
How much could this save you in the real world Manhattan real estate? For a one-bedroom Manhattan rental at average price ($ 3,350 per month in July, according to the Elliman report), the standard fee would be $ 6,030. Add in the other usual fees – the first month's rent and a month-long security deposit – and the hassle of landing that one bedroom at average price is a whopping $ 12,730. Without the brokerage fee, it's only $ 6,700.
In line with the high vacancy rates, the laws of supply and demand have also led to a decline in rents. Combine that with more free offers and 2020 suddenly seems like a golden moment to get a good deal on a rental … when you're ready to weather the pandemic through a daunting New York City winter.