States target ‘junk fees’ that burden rental households
Kentaroo Tryman
The White House gets behind innovative state and local programs committed to increasing transparency in housing fees.
As if looking for a rental home in a tight housing market weren’t stressful enough, prospective renters can also rack up hundreds of dollars in application fees and hidden charges. But now with the Biden administration joining states in their war on so-called junk fees, renters may soon see housing searches are a little less expensive.
On Wednesday, the White House announced new efforts to improve transparency in the rental market, including commitments from sites like Zillow and Apartments.com to share with users the total cost of fees added to monthly rent costs, such as security deposits and application fees. The administration also released a new research brief highlighting state and local policies that have helped reduce renters’ burdens by capping rents and requiring landlords to share all costs up-front.
Landlords have fees for just about everything, according to a report from the National Consumer Law Center, a nonprofit focusing on economic justice. A housing advocate in Washington cited in the report said that landlords sometimes charge fees for tenants’ guests who stay longer than a certain period of time. Another source reported fees for inspections performed by the landlord. In Texas, a landlord reportedly charged tenants for mail sorting, and in Minnesota, advocates found “January fees,” which appear to only mark the start of a new year. And those are just the fees levied after a tenant moves in.
Renters are often faced with steep charges even before signing a lease. Rental units are quick to go in the current market, prompting prospective tenants to submit multiple applications for different units, racking up tens or hundreds of dollars in application fees in the process.
These fees are meant to cover the costs of background and credit checks, but often exceed the sums required for such processes.
They disproportionately harm Black, Hispanic and Asian renters, who are more likely to be charged application fees, according to a report from the U.S. Department of Housing and Urban Development published Wednesday.
Several states have recently mobilized to keep renters from shelling out more than they need to.
In June, for instance, state legislatures in Connecticut and Rhode Island enacted laws that cap screening fees to the actual cost of those processes. Virginia and Washington similarly limit on application fees, and Vermont did away with them altogether. Other states, including California, Maryland and Washington, allow renters to provide their own screening reports, and state laws outline what must be included.
To encourage transparency in rental fees, some states have issued regulations for landlords. In Minnesota, for instance, all mandatory fees and deposits must be clearly spelled out on the first page of a lease.
While many states have proposed such measures, not all have become law. The Montana Senate approved a bill that would have required landlords to refund application fees to prospective renters, except for what was used for background checks. That bill ultimately died in the House. A California bill that would have prohibited some fees while requiring landlords to disclose others passed the Senate, but has yet to move forward.
The Biden administration's Wednesday announcement is its latest bid to ease the burdens on renters as the affordable housing crisis stretches on. Earlier this year, the White House published a “Blueprint for a Renters Bill of Rights,” which, among other things, emphasized the importance of fair and clear leases that are void of illegal and hidden fees.
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