LeaseRunner spotlights rental application fees as regulators move to rein them in

LeaseRunner is pointing to a growing problem for renters as federal and state policymakers target so-called junk fees in housing. New research and proposed rules suggest application fees are adding hundreds of dollars to the cost of finding a home, especially for low-income renters and renters of color.

Why it matters: - Rental application fees can add hundreds of dollars to the cost of finding housing before a renter signs a lease. - The burden falls hardest on renters with fewer options, including low-income households, Black and Latinx renters, and people with prior eviction records, medical debt, or criminal justice involvement. - Federal and state efforts to curb fee practices could make the rental market more transparent and reduce upfront costs.

What happened: - LeaseRunner highlighted new research showing that application fees have moved from a basic screening step to a financial barrier for many renters. - The FTC addressed the issue in its 2024 review of unfair rental fees. - Congress introduced the End Junk Fees for Renters Act. - The FTC’s 2026 proposed rule on rental housing fee practices would require landlords to disclose all mandatory fees upfront and stop advertising prices that leave those charges out.

The details: - Rental application fees were originally meant to cover background checks, credit reports and employment verification, usually at $15 to $40 per applicant. - Renters are often charged $75 to $100 or more per application. - The FTC said many application fees have grown beyond their original purpose and now qualify as “junk fees.” - The End Junk Fees for Renters Act defines junk fees as charges that exceed the actual cost of the service. - In tight rental markets, renters often have to apply to multiple units, which multiplies non-refundable fees. - A 2023 Zillow survey found Black and Latinx renters submitted five or more applications at twice the rate of white renters. - A family applying to four properties at $75 per adult can spend hundreds of dollars before getting a single approval. - A 2023 Georgetown Law analysis found renters with eviction records, medical debt or criminal justice involvement face the steepest barriers and are most likely to lose non-refundable fees. - A peer-reviewed study of more than 1.3 million Craigslist rental listings found landlords often use upfront fees, large deposits and move-in costs to screen applicants by financial capacity before formal screening. - The End Junk Fees for Renters Act would also bar landlords from reporting unpaid junk fees to credit bureaus, limiting possible credit damage from disputed charges.

Between the lines: - The policy debate is not only about fee size. It is also about who gets screened out before a landlord even reviews qualifications. - Portable Tenant Screening Reports shift the cost burden by letting renters pay once and reuse a verified screening report across multiple applications. - Seven states have introduced laws supporting Portable Tenant Screening Reports: Colorado, California, Illinois, Maryland, New York, Rhode Island and Washington. - Where Portable Tenant Screening Reports are standard, the per-application fee problem is significantly reduced.

What’s next: - Federal regulation is still advancing, so the biggest changes may not reach renters immediately. - State-level adoption of Portable Tenant Screening Reports could provide faster relief in some markets. - LeaseRunner says its Portable Tenant Screening Report is designed as a direct response to the application fee problem. - LeaseRunner also continues to offer tenant screening, lease agreements, rent collection and income verification as part of its broader property management platform.

The bottom line: - Rental application fees are becoming a policy target because they can function as a barrier to housing, not just a screening tool.