Biden Administration Takes Aim At 'Junk Fees' For Rental Housing

In a bid to lower costs for renters and increase transparency, the White House is calling on landlords and rental housing platforms to cut down on what it calls “junk fees” for rental applications services like mail sorting, trash collection and online rent payment.

“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,” the White House said in a statement. “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.”

These fees are typically charged on top of monthly rent, making it difficult for renters to get a clear picture of what it costs to live in a unit, according to the Wednesday statement. The U.S. Department of Housing and Urban Development also released an accompanying research brief, promoting transparency in rental fees.

One of the brief's targets is application fees, which can range from $50 to several hundred dollars and are intended to cover the cost of background and credit checks. In a tighter rental market nationally, the percentage of renters applying to two or more properties has increased, the brief states, meaning fees could easily add up to hundreds of dollars.

The brief recommends eliminating application fees or capping them at a reduced amount. It also recommends allowing prospective renters to supply their own screening report, or allow single application fees to cover multiple applications through the same platform.

The National Multifamily Housing Council quickly responded to the recommendations, saying it believes transparency is positive for renters and housing providers, though it disagrees “with the characterization that rental housing residents are pervasively being taken advantage of by housing providers.”

“We are aware of no credible evidence to support this assumption,” the statement said. “If there are bad actors who are taking advantage of prospective residents, they should be dealt with through appropriate legal channels.” 

Major rental housing platforms including Zillow, Apartments.com and AffordableHousing.com have responded to the Biden administration call, announcing their intentions to make the cost of renting a unit more accessible. Zillow, for instance, this week launched a tool that offers users the ability to determine the total cost of renting an apartment, including all monthly costs and one-time costs, like security deposits and application fees.

Since March, when the White House convened hundreds of state legislative leaders to help crack down on fees, seven states have enacted legislation to increase transparency around rental housing costs and fees, according to the White House's statement.

Other states already had legislation on the books. Vermont, for one, has banned rental application fees altogether. 

The NMHC statement said that this issue is already “largely and appropriately regulated at the state and local levels which can be more responsive to the unique needs of local communities and their housing markets.”

The Biden administration has been on a months-long campaign to eliminate other so-called junk fees from industries like hotels and resorts, airlines, event ticket sales and early cancellation of services such as phone, internet and cable.