NO JUNK IN THE TRUNK

White House takes aim at rental housing junk fees.

By Gina Erwin, HAA Legislative Chair, with Bradley Pepper, Vice President of Government Affairs

IN LATE JULY, President Joe Biden announced several steps that his administration is taking to help limit “junk fees” in rental housing. This follows a promise he made during the State of the Union address earlier this year to target unexpected fees that are paid by consumers on a variety of purchases across the economy.

These fees are tacked on to things like plane and concert tickets, hotel rooms, hospital and cellphone bills and banking transactions.

Rental housing junk fees referenced included application fees, “convenience fees” to pay rent online, fees for things like mail sorting, trash collection and pet fees.

The White House said that repeated rental application fees and surprise “convenience fees,” cause millions of families to incur burdensome costs in the rental application process and throughout the duration of their lease. Adding that 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.

President Biden said that junk fees are costing the American people billions of dollars a year. The administration claims that rental housing fees can be a serious burden on renters.

The administration says that rental applications can be up to $100 or more per application, and, importantly, they often exceed the actual cost of conducting the background and credit checks. Their concern is that that prospective renters often apply for multiple units over the course of their housing search and these application fees can add up to hundreds of dollars.

In an effort to crackdown on rental junk fees and lower costs for renters, the President outlined several actions that were being taken by both private business and government. Included are commitments from major rental housing platforms – Zillow, Apartments.com, and AffordableHousing.com – who will provide consumers with total, upfront cost information on rental properties, which can be hundreds of dollars on top of the advertised rent.

According to the release, these companies made the following announcements in conjunction with the Administration’s roll out:

• “Zillow is launching a Cost of Renting Summary on its active apartment listings, empowering the 28 million unique monthly users on its rental platform with clear information on the cost of renting. This new tool will enable renters to easily find out the total cost of renting an apartment from the outset, including all monthly costs and one-time costs, like security deposits and application fees.”

• “Apartments.com is announcing that this year it will launch a new calculator on its platform that will help renters determine the all-in price of a desired unit. This will include all up-front costs as well as recurring monthly rents and fees. The Apartments.com Network currently lists almost 1.5 million active availabilities across more than 385,000 properties.”

• “AffordableHousing.com, the nation’s largest online platform dedicated solely to affordable housing, will require owners to disclose all refundable and non-refundable fees and charges upfront in their listings. It will launch a new “Trusted Owner” badge that protects renters from being charged junk fees by identifying owners who have a history of adhering to best practices, including commitment to reasonable fee limits, no junk fees, and full fee disclosure.”

In addition to those announcements, HUD released a new research brief that provides an overview on rental fees and highlights state, local, and private sector strategies to encourage transparency and fairness in the rental market. This is intended to be a blueprint for both local governments and landlords to follow to increase transparency and reduce fees.

While the Biden-Harris Administration has touted these actions as important steps to helping limit fees, it is important to note that there has still not been any Executive Orders or Congressional action taken to further require any change in practice of owners and operators.

These included capping or eliminating rental application fees; allowing prospective renters to provide their own screening reports; allowing a single application fee to cover multiple applications; and clearly identifying bottom-line amounts that tenants will pay for move-in and monthly rent.

There is every indication that the administration will continue to push for further rental housing reform as they appeal to voters for the 2024 election. NAA continues its federal advocacy efforts to educate them on the rental housing industry and encourage adoption of balanced and sustainable housing policies that promote the preservation and development of housing at all price points as well as effective property management and operations.

Recently, NAA staff met with the White House and senior leadership at HUD to talk about fees, screening and renter protections broadly. HAA will continue to work with NAA to support advocacy on these federal regulatory actions.

If you have a regulatory problem or question, call the HAA main line at 713-595-0300 and ask for Government Affairs. If a particular code requirement or issue concerns you, let us know by emailing Bradley at bpepper@haaonline.org.