Some people have an easier time finding an apartment than others, and it has nothing to do with their ability to pay rent.
According to a new Zillow analysis, renters of color are disproportionately more likely than white renters to pay an application fee when they are searching for a new home, even when researchers controlled for age, income and other factors.
“I think there’s no getting away from the possibility that some of this disparate impact originates from prejudice or suspicion or a greater sense of risk from certain types of renters who don’t look like them,” said Jeff Tucker, an economist with Zillow.
According to the real estate analytics company, four in five Asian renters and three in four blacks and Latinos pay application fees compared to slightly more than half of white renters.
Zillow’s research was national in scope. But, Tucker said, particularly in tight housing markets like the Bay Area, renters often submit several applications or more before they land an apartment — meaning what starts as a $50 application fee could multiply into several hundred dollars.
Even if landlords aren’t explicitly or consciously discriminating against black, Latino and Asian renters, their actions can create barriers. For instance, if a landlord has “a lack of trust” of a potential tenant based on race, said Bay Area tenants’ rights attorney Leah Simon-Weisberg, they might impose an application fee and look more thoroughly into the person, instead of thinking, “Oh, you fit into what I imagine a neighbor should look like.”
Or, as Tucker put it, “It’s a lot of people making judgment calls.”
And there’s often no clear way to control those calls. Still, some places are taking steps to prevent upfront costs, if not to explicitly limit discrimination. Massachusetts, for instance, bans application fees or credit check fees altogether — although some companies seem to flout the rules. New York recently effectively barred broker’s fees, but a lawsuit almost immediately put that ban on hold.
Implementing a ban on application fees in California, said Michael Trujillo, a staff attorney with the Law Foundation of Silicon Valley, “would be ideal.”
Merika Reagan, a black resident of Oakland and a member of the anti-displacement group ACCE, isn’t shocked by the findings.
“I’m not surprised by it at all,” Reagan said. “This is old news.”
Reagan said she’s paid an application fee for each apartment she’s lived in — and for a fair number of apartments she didn’t get.
“You pay an application fee and you could get turned down,” she said. “It’s not like if you don’t get it, they give it back.”
And, Reagan said, she thinks racism is a factor. Landlords, she said, have sometimes asked her leading questions about whether her job is stable, seemingly under the assumption that because of her race, she may be a less reliable tenant.
Angie Watson-Hajjem of ECHO Housing, which provides counseling to low-income tenants and other housing services, said her team runs tests that regularly reveal bias. When two women — one black, one white — attempted to apply for a home in Contra Costa County, she said, the black woman was charged a higher application fee. In another case, a woman with a white-sounding name received a response to an emailed inquiry about a property, while a woman with a black-sounding name did not.
Racism, Watson-Hajjem said, “is still a real problem.”
Because people of color are less likely on average to have access to as much family wealth as white people and renters generally earn less than homeowners, Tucker said, “it’s often the people with the least financial means to get through those unexpected one-time expenses who are being forced into dealing with it more often.”
When there are barriers to moving into a new home, like application fees and hefty security deposits, people already struggling to find a place to live can find themselves couch surfing or sleeping on the streets.
“For folks on the edge,” said Lupe Arreola, executive director of San Francisco-based Tenants Together, “those application fees could potentially stand in the way of being able to look for an apartment.”
“It’s a bit of a game of musical chairs,” Tucker said of the current housing market, adding that when competition is fierce for housing, as it is in the Bay Area, the balance of power tips squarely to the landlord.
Trujillo agreed, adding that his office has seen a number of clients in Milpitas pay unexplained “convenience fees” or other charges without pushing back because of concerns about their immigration status being revealed or jeopardized.
“I think it reflects just the vastly unequal bargaining power between landlords and tenants,” Trujillo said.
As a consequence, he continued, tenants might not report problems with the apartment or other issues for fear of being pushed out.
“People are staying in situations that they don’t actually want to be in,” Arreola said, “because of the lack of choices and the lack of opportunity to rent a reasonably priced, habitable place.”
And in general, said Simon-Weisberg, there’s “an extraordinary amount of discrimination that continues,” from requiring people who might not have reliable internet access to apply for apartments online to requirements that tenants earn three times the rent to qualify.
The added upfront costs might also deter someone from moving by choice, Zillow pointed out, to take a new job or make a life change. The extra costs make one of the supposed benefits of renting — more mobility than a homeowner — harder to access.
Anil Babbar, vice president of public affairs for the California Apartment Association, said in an email that the group “urges all property owners to follow all applicable local, state, and federal fair housing laws and regulations and treat every applicant equally and fairly.”
According to Zillow, 35 percent of renters said paying the upfront costs of moving is the biggest hurdle to landing a new apartment.
Zillow’s director of economic research, Skylar Olsen, said in a statement he hopes the findings, ultimately, will help pinpoint blind spots where the market “fails to provide a level playing field.”
