Giving Compass' Take:
- Robert Davis discusses how limiting junk fees imposed by landlords can enhance housing affordability and reduce homelessness for low-income renters.
- How can you most effectively support efforts to improve housing affordability for renters in your community?
- Learn more about key issues in homelessness and housing and how you can help.
- Search our Guide to Good for nonprofits focused on homelessness in your area.
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Laws limiting the fees that landlords can charge prospective tenants, also known as junk fees, are growing nationwide. New research from the National Low Income Housing Coalition suggests that the laws could help reduce future cases of homelessness by making it more affordable for low-income renters to seek new housing.
Junk fees include application fees, processing fees, pet fees, and other administrative-related fees that landlords charge their tenants. These fees can range from as little as $5 up to $100 in some cases and can make affordable housing units out of reach for the lowest-income households.
NLIHC analyzed the effectiveness of laws limiting junk fees in Rhode Island and Connecticut. Rhode Island’s laws primarily addressed application fees for prospective tenants, while Connecticut’s legislation included rental deposits, screening fees, and late fees.
The two case studies “highlight the qualitative impact of these protections for tenants and how such laws can be critical in mitigating the threat of housing instability,” NLIHC said.
Junk Fees Exacerbate Rising Housing Costs and Increased Homelessness Risk
People earning the lowest incomes often face the highest risk of experiencing homelessness because they are likely to spend more than the recommended 30% of their income on housing-related costs like rent and utilities. These risks were significantly heightened during the coronavirus pandemic as rents skyrocketed nationwide.
The pandemic also exploded some existing fissures in local housing markets. For instance, the number of available units in Providence, Rhode Island, declined by 30% between 2018 and 2021, NLIHC found. That was one reason why rents increased by roughly 25% between February 2019, before the pandemic began, and February 2023, the 12-page report says.
The combination of decreasing available units and increasing rents contributed to Rhode Island’s increase in homelessness over the last year. As of January 2023, more than 1,300 people were experiencing homelessness in Rhode Island, and about 25% of those individuals lived unsheltered. That total represents a 13.8% increase year-over-year, accounting for more than 160 people overall.
Read the full article about limiting junk fees by Robert Davis at Invisible People.