MD Rahman

Sen. Rahman Introduces Legislation To Cap Rental Application Fees, Helping Lower Cost Barriers To Housing

Working to reduce housing access costs for Connecticut residents, especially young renters and those on limited budgets, State Senator MD Rahman (D-Manchester) has introduced legislation to cap the amount landlords may charge for application fees and tenant screening reports. The legislation would also require landlords to show proof of tenant screening reports. The bill in question is Senate Bill 878, “An Act Concerning Rental Application Fees and Tenant Screening Reports.”

“When we face housing shortages and are trying to retain young workers in our state, we need to do more to aid residents in being able to access housing,” said Sen. Rahman. “I’ve heard stories from constituents and colleagues that landlords and housing complexes are charging application fees, often non-refundable, valued as high as hundreds of dollars. This effectively serves as a financial barrier to housing, especially for someone applying to multiple properties. Additionally, if a landlord collects a tenant screening report, they should show proof of such a report, as landlords could potentially simply pocket a fee or charge more than the report’s value. In an environment where these factors can add to renters’ struggles to find housing, such changes can help reduce costs and prevent further restrictions on housing availability.”

Other states have already passed laws capping rental application fee costs; California, Delaware, New York and Colorado are among the states with such laws.

While the average rental application fee in the United States stands at around $30 per applicant, property managers and landlords can charge more. For prospective applicants, these fees can add up to hundreds of dollars with no guarantee of finding new or better housing. Such fees can be especially challenging for some; a 2022 Zillow survey found Black and Hispanic renters were nearly twice as likely to report submitting five or more housing applications. The survey further found people of color paid, on average, higher median application fees than white renters.

These increased fees are coming during a time of economic uncertainty, adding to an already challenging climate for Connecticut residents. This can have ripple effects that impact the state’s workforce negatively; for instance, the Connecticut Insider reported in 2022 that nearly 1/3 of “Gen Z” live at home with parents or relatives, and in 2020, nearly 3 million Americans moved in with relatives. In 2021, a quarter of adults ages 25-34 lived in multigenerational households; that’s up 9% from 1971. Any efforts to reduce costs will help reduce these burdens and aid renters.