The Biden Administration announced in Mid-July that it has enlisted the help of several real estate platforms in taking on so-called “junk fees” in rental housing in order to “lower costs for renters.” These partnerships include Zillow, Apartments.com, and Affordablehousing.com. The statement concludes by saying that in the coming months the Biden Administration will work with Congress, state leaders, and the private sector to address these so-called “rental junk fees” in an effort to build “a fairer rental housing market.”

Below is an except from the White House’s release:

July 19, 2023

FACT SHEET: Biden-⁠Harris Administration Takes on Junk Fees in Rental Housing to Lower Costs for Renters

Major rental housing platforms and several states join the President’s effort to crack down on rental housing junk fees for consumers and increase transparency.

Today, President Biden is announcing a new front in his crackdown on junk fees: rental housing. From repeated rental application fees to surprise “convenience fees,” millions of families incur burdensome costs in the rental application process and throughout the duration of their lease. These fees are often more than the actual cost of providing the service, or are added onto rents to cover services that renters assume are included—or that they don’t even want.

Rental housing fees can be a serious burden on renters. Rental application fees can be up to $100 or more per application, and, importantly, they often exceed the actual cost of conducting the background and credit checks. Given that prospective renters often apply for multiple units over the course of their housing search, these application fees can add up to hundreds of dollars. Even after renters secure housing, they are often surprised to be charged mandatory fees on top of their rent, including “convenience fees” to pay rent online, fees for things like mail sorting and trash collection, and even so-called “January fees” charged for no clear reason at the beginning of a new calendar year. Hidden fees not only take money out of people’s pockets, they also make it more difficult to comparison shop. A prospective renter may choose one apartment over another thinking it is less expensive, only to learn that after fees and other add-ons the actual cost for their chosen apartment is much higher than they expected or can afford.

Today, the President will outline several new, concrete steps in the Administration’s effort to crack down on rental junk fees and lower costs for renters, including:

• New commitments from major rental housing platforms—Zillow, Apartments.com, and AffordableHousing.com—who have answered the President’s call for transparency and will provide consumers with total, upfront cost information on rental properties, which can be hundreds of dollars on top of the advertised rent;
• New research from the Department of Housing and Urban Development (HUD), which provides a blueprint for a nationwide effort to address rental housing junk fees; and
• Legislative action in states across the country—from Connecticut to California—who are joining the Administration in its effort to crack down on rental housing fees and protect consumers.

 

Article by Brad Beckett, Director of Education & Outreach, Real Estate Investing Today, National Real Estate Investors Association (NREIA).