The White House plans to focus on repeated rental application fees, surprise “convenience fees,” and other hidden charges.
In addition to federal initiatives, rental housing platforms, such as Apartments.com and Zillow, will provide consumers full transparency, including upfront cost information. Plus, state governments will take legislative action to clamp down on rental housing fees.
The Senate Banking Committee’s Subcommittee on Financial Institutions and Consumer Protection hosted a hearing on junk fees, including in the rental housing market, on July 26.
During the hearing, Lindsey Siegel, a director of housing advocacy at the Atlanta Legal Aid Society, testified that a single mother found an online listing for an apartment in 2020 going for $1,400 per month. While the advertisement didn’t outline any monthly fees, the applicant spent $525 in additional charges, including a $300 screening fee, a $175 moving fee, and a $50 application fee. The landlord charged another $200 approval fee.
According to Ms. Siegel, the prospective tenant received and signed a copy of a 50-page lease that contained several other fees, such as pest control, trash removal, and a package locker, that added $83 to her monthly rent.
“The high demand for rental housing, especially at the more affordable end of the market, makes some landlords believe they can easily get away with unfair and deceptive lease terms and rental practices,” she said.
The challenge for renters is that they need to pay these application fees several times before finding a unit to rent, according to Ms. Siegel. Lawmakers also heard that these fees often exceed the cost of running reports such as credit checks.
![Sen. Raphael Warnock (D-Ga.) speaks at a press conference following a virtual weekly Senate Democratic Policy meeting at the U.S. Capitol in Washington on Jan. 4, 2022. (Photo by Anna Moneymaker/Getty Images)](/_next/image?url=https%3A%2F%2Fimg.theepochtimes.com%2Fassets%2Fuploads%2F2022%2F07%2F11%2FSenator-Raphael-Warnock-600x400.jpg&w=1200&q=75)
Sen. Raphael Warnock (D-Ga.) called these fees “a drag on the American economy.”
“And business school economists call this ’rent-seeking,'” said Mr. Warnock, who chaired the hearing.
Inflation Drivers
Sen. Thom Tillis (R-N.C.), the ranking Republican member on the subcommittee, questioned the administration’s motives behind these public policy pursuits to clamp down on junk fees.“It’s interesting that these fees, most of which had long been present in the economy, were suddenly identified as the drivers of surging inflation, though nearly $2 trillion President Biden opted to pump in the U.S. economy,” Mr. Tillis stated at the hearing.
Peyton Whitney, a research assistant at the Joint Center for Housing Studies, spoke on the importance of rental assistance and income-support programs. But Ms. Whitney also suggested the “clear need for strategies to increase the existing housing supply, which would keep housing costs in check and ultimately benefit households at all income levels.”
The competition for rental units has intensified amid low housing inventories among homebuyers, according to a June report by the National Association of Realtors and realtor.com.
![A 'Rent' sign is placed in front of a building in Miami Beach on Dec. 6, 2022. (Joe Raedle/Getty Images)](/_next/image?url=https%3A%2F%2Fimg.theepochtimes.com%2Fassets%2Fuploads%2F2022%2F12%2F25%2FMiami-rent-600x387.jpg&w=1200&q=75)
“Rising mortgage rates caused many households to be priced out from home buying and would-be buyers to remain renters,” Moody’s analysts wrote. “Apartment demand surged as a result and drove rates sky high. As the disparity between rent growth and income growth widens, Americans’ wallets feel financial distress as wage growth trails rent growth.”
Experts have also partially blamed the Federal Reserve for the housing situation.