Finding a place to rent is more difficult than ever since 1984, as the low number of available units means that each available unit sees multiple applicants. While the Fair Housing Act prevents discrimination based on race, sex, national origin, or religion, minority tenants still face additional scrutiny during the application process by having to submit more than average applications and deposits. higher security fees when they purchase a unit.
these dates comes from Zillow through its 2021 Consumer Housing Trends Reportwhich surveyed more than 2,000 renters about their experiences applying for and securing a place to live over the course of the year.
In general, the typical renter who moved in last year is a 33-year-old white male in a 2-bedroom, 2-bath apartment between 500 and 999 square feet. Two-thirds of renters (65%) are under the age of 40 and 56% are white or Caucasian.
But as rental prices continue to rise (17% last year according to Zillow), so do application fees and security deposits, adding additional cost burdens for already financially strapped buyers. But even then, those stressors aren’t applied evenly across the board.
According to Zillow research, renters of color apply more, thus paying more in fees, than their white counterparts and also pay more for security deposits after purchasing a unit.
Renters generally don’t have the financial cushion that a landlord would; the typical renter has $3,400 total in their checking/savings and retirement or investment accounts. A third (38%) reported that they couldn’t afford a surprise $1,000 expense.
9 out of 10 renters paid some kind of security deposit in order to move in, with the average deposit costing $700, which is a significant portion of the typical renter’s wealth. 93% of minority renters reported paying a security deposit, while 85% fewer white renters paid a security deposit before moving out.
“In addition to paying higher and more frequent security deposits, renters of color report filing more applications and paying higher fees for those applications than white renters. In 2021, 61% of all renters applied for two or more properties, an increase of 11 points from 2019 and five points more than in 2020, likely due to the tight rental market,” Zillow said. “The typical White or Asian American and Pacific Islander renter files two applications, while a Black or Latino renter typically files three. More than a third of renters of color submit five or more applications during their housing search: that’s true for 38% of Black and Latino renters, 33% of Asian American and Pacific Islander renters, and only 21% of white renters.”
Again, application fees for tenants can add up quickly when some tenants apply at multiple locations. Zillow found that the average application fee is $50. Among renters who paid an application fee for the home they rent, the median white renter reported paying $50, while black renters paid $65, Latino renters paid $80, and Asian Americans and Pacific Islanders paid $100.
“The higher rates and number of applications for renters of color are likely partially due to their age, income and geography. The typical renter of color is two years younger than the median white renter, which means two fewer years of potential income growth,” Zillow said. “White renters are also more likely to live in rural markets and the Midwest, which are generally less expensive. Asian American, Pacific Islander and Latino renters, in particular, are more likely to rent in the West, which includes many of the most expensive and competitive rental markets in the country.”
Zillow suggests that expanding access to credit could alleviate some of these problems for minority renters. Credit checks are part of many rental applications, and African Americans and Latinos are more likely to be “credit invisible” and more often live in counties with high levels of credit insecurity.