New York rents settle after the FARE Act, but inventory is the real story

A year after the FARE Act reshaped how New Yorkers pay for brokers, the dust has settled, and the market has not behaved as either side predicted. Tenants expected lower move-in costs and found them, but asking rents in many neighbourhoods edged up as landlords priced in the fee they now pay. Landlords feared a drop in demand and instead saw applications continue at their usual pace.

What matters more than the fee change, in our view, is that the city is still short of apartments. Vacancy in rental stock has stayed below four per cent, well under the level the city treats as a housing emergency, and every month brings fewer new rental completions than the year before.

Where rents moved

Median asking rent in Manhattan rose by about two per cent from January to June, a gentler pace than in 2024. Brooklyn gained slightly more, with Williamsburg and Park Slope leading the borough, helped by new buildings that came to market with concessions that were later withdrawn as they filled.

Net effective rent, the amount a tenant pays after concessions such as free months, tells a different story from advertised prices. In lease-up buildings, one month free on a 13-month lease has become standard, and we are seeing fewer of the two-month offers that appeared in late 2023.

Why supply stays tight

New rental construction has slowed because of higher borrowing costs and the expiry of the 421-a tax incentive. The replacement programme, 485-x, has attracted projects, but they will not reach the market for years. Meanwhile, rent-stabilised apartments change hands rarely, and owners hold on to them.

The consequence for tenants is that the usual playbook still applies. Strong applicants who are ready with documents and can move quickly win apartments, and first showings routinely generate multiple applications. Those with weaker credit or a lower income-to-rent ratio are turning to guarantors or guarantee services.

• Have your documents ready before you view: pay stubs, tax returns, bank statements, ID
• Compare listings by net effective rent over the full lease term
• Ask whether the broker is paid by the landlord, as the FARE Act requires
• Check the building’s violation history on the city’s public database

What landlords should do

For landlords, the main change has been in how they market apartments. Professional photography, clear lease terms and a fast response to enquiries reduce vacancy more than price cuts. Owners who relied on tenants paying the broker are now factoring a one-time cost into their yearly budget, usually less than the vacancy a poor listing creates.

Landlords should also check their compliance with New York’s rules on security deposits, application fees and heat and hot water, since enforcement activity has grown. Our property management team in New York can audit a building’s leasing practices and update lease templates.

Looking ahead, we expect the second half of the year to look much like the first: steady rents, tight vacancy and small but persistent increases in the cost of a good apartment. The one wildcard is the pace of lease renewals as the new rules bed in. If more tenants renew rather than move, the number of available apartments could shrink further, and that would favour landlords in the neighbourhoods where demand is deepest.

Anyone planning a move this autumn should start early, set a firm budget including moving costs and talk to an agent who will tell them plainly what a given budget can and cannot buy in each neighbourhood. Marcus Bell’s New York team offers a free rental briefing for newcomers to the city.

The figures in this article are illustrative observations from Halvenor’s fictional demonstration desks and are not real market statistics.