A new law intended to protect renters has inadvertently pushed rent-stabilized apartments underground, according to Rachel Fiegler, Co-Founder of Pinpointe Group, who says landlords are increasingly moving listings off public platforms.
“Rent stabilized apartments aren’t being advertised online anymore because they can’t bake in the broker fee,” Fiegler says, describing an unintended consequence of New York’s FAIR Act that took effect in June. The law requires landlords to pay broker fees for publicly listed properties, but Fiegler argues this has created a shadow market for affordable units.
The Hidden Market Emerges
According to Fiegler, rent-stabilized property owners, who are restricted in how much they can raise rents, have found themselves in a bind. “They can’t afford to pay a broker fee if they’re not going to get money for it,” she explains. Instead of listing properties publicly, landlords are quietly distributing availability lists to brokers.
“They’re just saying, ‘here is what we have. If you have clients, bring them to us,’” Fiegler says. This shift means renters often can’t find these units through traditional online searches. “A lot of times clients ask, ‘Can you send me a listing?’ I cannot. We have to go see it,” she notes.
Market Access Barriers
The development raises concerns about access to affordable housing. While the FAIR Act aimed to reduce costs for renters, Fiegler suggests it may have made finding rent-stabilized units more difficult. “People have to hire a broker to get access,” she says, noting that in these off-market scenarios, tenants still end up paying the broker fee since they initiated the search.
Industry Solutions
Fiegler’s firm, Pinpointe Group, has adapted by maintaining direct relationships with landlords to access these hidden listings. “We have clients that are looking for things, and then we say, ‘Okay, we have these. We can show you, but we can’t advertise them,’” she explains. The boutique brokerage focuses on transparency, even when it means explaining these complex market dynamics to frustrated clients.
