New York Rentals: Price Correction and New Rules

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New York City’s rental market is undergoing a reset. Lower mortgage rates and softer demand coincide with the entry into force of a law that changes how broker fees are calculated and disclosed. Growth is cooling in the rental market overall, yet peripheral neighborhoods continue to post price increases.

Prices and Demand

The median rent for new leases in Manhattan in August was $4,600, down 2.1% from July but 8.4% higher than a year earlier, Bloomberg reports, citing data from Miller Samuel and Douglas Elliman. Analysts note that August is typically one of the most active months in NYC rentals: college graduates arrive, and families move before the school year.

This year, however, pressure eased as mortgage rates fell to an 11-month low. Weak labor indicators and expectations of policy-rate cuts could push borrowing costs down further, making home purchases more attractive for some renters.

Near-record Manhattan prices are also pushing renters to more affordable areas outside the core. Competition has intensified in Brooklyn and northwest Queens—including Astoria and Long Island City—where rents continued to rise, with multiple-bid situations increasingly common.

Brooklyn median new-lease rent rose about 8% YoY to $3,950, up $100 from July.

Northwest Queens median climbed nearly 7% to $3,775, up $25 month over month.

Miller Samuel President Jonathan Miller noted that new-lease activity in August fell versus July: “We are likely nearing the end of the sharp rent growth seen in 2025.”

The New Law

Vacant listings fell in August by 9% from July to 9,625. Some landlords temporarily pulled units after the Fairness in Apartment Rental Expenses Act (FARE) took effect, notes Outside Legal. The law prohibits brokers hired by landlords from charging tenants. All fees and add-ons must be disclosed upfront in ads and leases. Enforcement is handled by the Department of Consumer and Worker Protection (DCWP), with fines of $1,000 for a first violation and $2,000 for repeat offenses within two years.

Attempts to pause the law failed. A court rejected a lawsuit from REBNY and industry groups alleging violations of property and contract rights. REBNY President James Whelan voiced disappointment: “New Yorkers will soon feel the negative consequences of FARE when listings decline and rents rise. We will continue litigation and seek avenues for appeal.”

Andrew Lieb of Lieb at Law argues the changes add administrative burden and could deter investors from participating in the rental market.

Expert Views

StreetEasy economist Kenny Lee called FARE a “big win for renters.” By his estimates, eliminating broker fees can cut average move-in costs by nearly 42%—from $12,942 to $7,537 (first month plus a one-month security deposit). In buildings that already switched to no-fee leasing, asking rents rose just 5.3%, a mere 0.7 p.p. above the market average.

Lidor Bar-David, co-founder of Openigloo, notes that nearly half of NYC apartments are protected by rent-stabilization or “good cause” rules, where increases are capped at 8.8%—limiting the scope for sharp rent jumps. Still, brokers warn outcomes may be mixed.

Rachel Figler, co-founder of Pinpointe Group, says many owners her firm works with have already raised asking rents by 8–12% to offset added costs. Bill Kowalczuk of Coldwell Banker Warburg reports a Brooklyn studio recently rented for $4,150/month, a record for that building.

Higher asking rents tighten access. With an average rent around $3,900, tenants often need to show $150,000+ annual income or a guarantor earning $300,000+. Some owners are seeking workarounds: posting directly on StreetEasy or listing only a portion of units online. Jason Haber of Compass expects a partial shift back to less transparent channels—email lists, offline contacts, private databases—“which will work against the very people the law intended to protect.”