The Biden-Harris administration announced on July 19 actions to “crack down on junk fees” in rental housing. Rental housing junk fees include application fees, convenience fees for online payments, and fees for trash collection. The new actions follow an open call issued by HUD Secretary Marcia L. Fudge for rental housing providers to create a fairer and more transparent rental market (see Memo 3/13). In response, Zillow, Apartments.com, and AffordableHousing.com have each announced new steps to provide information about fees for tenants before they sign a lease.
To promote efforts to crack down on fees, HUD released a research brief on rental fees that highlights state, local, and private sector strategies to encourage transparency and fairness in the market. Likewise, the White House has praised recent state actions to address hidden rental fees in response to the publication of a March resource for states addressing how they can reduce junk fees across sectors. The new White House announcement, which also flags an upcoming July 26 Subcommittee on Senate Banking, Housing and Urban Affairs hearing on rental fees, is another indication of the Biden-Harris administration’s support for renters, exemplified in its Blueprint for a Renters Bill of Rights (see Memo 1/30).
Junk fees in the rental market are hidden, duplicative, and unnecessary fees that create a financial burden for low-income renters. Renters must often apply for several units, incurring many non-refundable costs, such as rental application fees, administrative fees, and other processing fees, which can add up to hundreds and even thousands of dollars. These fees are a significant burden for renters and are often used to pay for tenant screening reports that may provide landlords or rental companies with inaccurate information. The process can prevent renters from being selected for a unit, deplete their funds, and complicate and delay their ability to find affordable housing. Eliminating unnecessary rental fees is a part of NLIHC’s HoUSed campaign to expand renter protections, which includes requiring landlords to disclose any and all fees in advance of lease signing.
NLIHC took issue with rental junk fees in a comment letter sent to the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) in response to a request for input on tenant screening practices (see Memo 6/5). “Landlords and property managers can profit immensely off charging non-refundable rental application and screening fees to prospective tenants, even knowing that only one applicant will ultimately be selected,” the comment letter stated. “For individuals and families with extremely low incomes, application fees can be an insurmountable barrier to affordable housing. Extremely low-income households – those earning 30% or less of Area Median Income (AMI), or less than the federal poverty guideline – have limited money available to spend on repeated application fees, which can quickly add up and drain any available savings.”
While the commitments from Zillow, Apartments.com, and AffordableHousing.com are voluntary, they signal an effort by rental housing industry providers to provide more transparency regarding junk fees and to work with HUD and the Biden-Harris administration to reduce surprise fees affecting access to vital housing. “Too often, renters are hit with unexpected fees on top of their rent,” said HUD Secretary Marcia L. Fudge. “Today’s announcement shows the Biden-Harris administration’s commitment to lower costs for renters and build a fairer, more transparent rental housing marketplace.”
Read the White House announcement on rental junk fees at: https://tinyurl.com/fs78xb7y
Read the HUD press statement at: https://tinyurl.com/388u87zp
Read HUD’s research brief on rental fees at: https://tinyurl.com/53z7kkwn