Washington, D.C. — As Congress advances critical bipartisan housing legislation focused on increasing housing supply, a new policy proposal from the Center for American Progress argues policymakers should also pursue reforms that lower costs for renters right away. The report proposes capping rental application fees at $5, saving renters in competitive markets hundreds of dollars in nonrefundable fees just to apply for housing.
A Fannie Mae-commissioned survey found that nearly half of renters identified “affording the upfront costs” of moving—including application fees and security deposits—as a top challenge during the rental process. Among renters who identified up-front costs as a challenge, 40 percent specifically pointed to rental application fees in 2023, up from 35 percent two years earlier. Excessive application fees can also make it less likely that an individual or family attempts to move to a new neighborhood to be closer to work or children’s school.
“Everyone can relate to the frustration of forking over hundreds of dollars just to be considered for a new place,” said Chad Maisel, senior fellow on the Economic Policy team at CAP and author of the report. “Capping rental application fees would provide immediate, concrete relief for renters while making it easier for families to move to better jobs, neighborhoods, and schools.”
The report finds that capping application fees at $5 per applicant would:
- Save renters hundreds of dollars during apartment searches. A couple applying to six apartments at $50 per person per application would pay $600 under the current system, compared with just $60 under CAP’s proposed cap.
- Reduce barriers to economic mobility. Research cited in the report shows that up-front housing search costs can discourage families from moving to higher-paying jobs or higher-opportunity neighborhoods.
- Create a clear, enforceable federal standard. The proposal would replace inconsistent state-by-state systems with a bright-line rule that renters, landlords, and regulators can easily understand and enforce.
Read the analysis: “Capping Rental Application Fees at $5” by Chad Maisel
For more information or to speak with an expert, please contact Christian Unkenholz at [email protected].