by Matthew Russell Lee, Patreon Book Substack
SDNY COURTHOUSE, May 2 – New York City's new rental broker fee law, which has landlords paying brokers instead of tenants paying, has been sued by the Real Estate Board of New York.
On May 2 a hearing was held by U.S. District Court for the Southern District of New York Judge Ronnie Abrams. Inner City Press live tweeted it. From the thread:
City: "upfront fees are a significant barrier to entering rental market." Rebuttal by REBNY: "the City cannot justify this speech restriction."
Judge Abrams: Doesn't the TikTok decision support these restrictions?
REBNY lawyer: TikTok is owned by a foreign sovereign and there are national security concerns...
Judge: Let's move to the contracts clause issue REBNY lawyer: This impairs landlords' contracts Judge: What about tenants who can't afford the high up-front fee? REBNY lawyer: On affordability, on the 40 times rule, a person making $125,000 [a year] could afford a $3000 rent. If this drives up the rent, people are hurt.
NYC lawyer: A renewal of a contract is a new contract- so fewer and fewer are covered by the contracts clause.
Judge: What about the City Councilmembers' statements REBNY quotes?
NYC lawyer: The statement by Speaker Adams, it referenced the testimony of opponents Judge: So would rents go up?
NYC lawyer: That may be... The statement was that we are not trying to stop rents from going up with this bill. It's that tenants don't have the market power to fend off these broker fees, so people can't move
Judge Abrams: Thank you, I'll reserve
The case is Real Estate Board of New York, Inc. et al v. The City Of New York , et al., 1:24-cv-9678 (Abrams)
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