Mamdani targets broker fees to cut CityFHEPS costs

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Hey there, let’s get into today’s news at the intersection of policy and real estate:

• The Mamdani administration plans to cut broker fees as it looks to rein in CityFHEPS spending.
• Albany’s state session is winding down today, but the dealmaking is far from over. 
• Legislature extends NYC’s green roof tax break.

In this edition we mention: Human Resources Administration Administrator Scott French, state Sen. Brian Kavanagh, Assembly member Sarahana Shrestha, State Sen. John Liu, Assembly member Nily Rozic and others.

We Heard

• Broker fee squeeze: The Mamdani administration is taking aim at a key CityFHEPS expense: broker fees. The city plans to slash payouts to brokers who place tenants through the controversial city housing voucher program, which helps New Yorkers who are or at risk of homelessness cover rent. State law requires the city to pay broker fees for public assistance recipients who cannot secure housing on their own. Between January 2022 and February 2025, the city paid $22.6 million in broker fees to 1,288 brokers — about $17,500 apiece on average — according to a January audit by state Comptroller Thomas DiNapoli. Now, the city’s Human Resources Administration is changing the math. HRA Administrator Scott French told City Council members that broker fees will be “significantly less than in the past,” on Thursday during a budget hearing. Under current rules, brokers can collect up to 15 percent of a household’s annual rent, provided they are not the landlord or affiliated with the property owner. HRA instead plans to cap fees at one month’s rent. The move is part of a broader cost-containment push as CityFHEPS spending continues to soar; HRA says it has enacted new procedures aimed at ensuring the city isn’t overpaying for a unit. The program’s costs have tripled over the past three years and is projected to hit $1.7 billion this fiscal year, according to the Citizens Budget Commission. A 2024 report from the Real Estate Board of New York and Women In Need, the city’s largest family shelter operator, argued that voucher holders fare better when brokers help navigate the often cumbersome process of securing housing through CityFHEPS. To “ensure agent participation,” the groups recommended maintaining fees at the market-rate standard of 15 percent of annual rent.
• Final hours: The clock is winding down on the state’s legislative session, but Albany’s dealmaking is far from over. Much of the action unfolded behind closed doors the first half of the day with lawmakers in conference negotiating bills. The debates will likely last late into the night, and legislators are expected to return to the Capitol to wrap up tomorrow. We’re keeping tabs on a number of bills that impact the real estate industry, including the contentious Rent Emergency Stabilization for Tenants (REST) Act. Housing Justice for All and its allies have spent the session’s final days ramping up pressure on lawmakers, staging rallies and delivering a letter signed by 76 elected officials from cities, counties, towns and villages across the state urging legislative leaders to pass the bill. Meanwhile, a slew of landlord groups have lobbied against the measure, including the Real East Board of New York, the Homeowners For An Affordable New York and the Western New York Property Owners Coalition. State Senate housing committee chair Brian Kavanagh and Assembly member Sarahana Shrestha, the bill’s sponsors, have whipped the backing of progressive lawmakers. But the bill appears to lack broad support in both chambers to pass the Legislature this session, according to two people familiar with the situation not authorized to speak publicly. Among the other bills we’re watching is a bill to hold banks accountable for so-called zombie homes, legislation that would limit listing agreements to no more than two years, and a measure would reduce the administrative burden for rent-controlled property owners to receive certain rent increases. More coverage soon on where bills poised for an impact on the industry land.
  
• Greenlight: Albany is giving New York City’s green roof tax break another four years of life. The Legislature passed a bill sponsored by State Sen. John Liu and Assembly member Nily Rozic extending the program through 2031. The tax abatement, currently set to expire in July 2027, offers property owners a one-time incentive to install vegetative roof systems. Green roofs are designed to absorb stormwater, reducing pressure on the city’s sewer system and helping curb flooding. They can also lower building temperatures and offset the urban heat island effect — elevated temperatures in cities due to dense development and limited greenery. Property owners can claim a tax break of $10 per square foot of green roof space, or $15 per square foot in certain neighborhoods, with benefits capped at $200,000 per roof.

Have a tip or feedback? Reach me at caroline.spivack@therealdeal.com. 

Bill Tracker

The Catch-Up

A Brooklyn homeless shelter provider is set to receive nearly $200 million in new city contracts two months after federal prosecutors charged its leaders with bribery and embezzlement, reports Gothamist.

Gov. Kathy Hochul gave her blessing on a legislative deal to protect Resorts World, New York City’s new casino, from paying upward of $150 million a year to the state’s horseracing industry, reports New York Focus.

Six years after the pandemic shuttered businesses across New York, the city’s commercial corridors have not quite recovered, reflected in persistent storefront vacancies, reports the City Reporter.

For the fourth year in a row, spending to influence state government officials and lawmakers set a record last year, with lobbyists and their clients reporting more than $384.8 million expended, reports the Times Union. 

The Kicker

“This is the end of the shaded boxes,” state Senate Majority Leader Andrea Stewart-Cousins told reporters Thursday, referring to the legislative calendar and signaling that lawmakers won’t get extra days to wrap up unfinished business.

Read more

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The Daily Dirt: Tenants say it’s time for REST