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Potential renters of color pay up to twice the application fee that white people do—and that’s just the beginning of the racism

April 7, 2022, 7:47 PM UTC

This year’s market has been unforgiving for renters—even more so for renters of color.

Black and Latino renters are more likely to pay higher security deposits and application fees than white applicants for a new home, according to a new report by online real estate company Zillow.

Security deposits can run renters of color $150 more on average than what white applicants, and nearly twice as many Black and Latino applicants find themselves needing to file more than five applications when compared to white applicants. 

Application fees can quickly add up, regardless of the amount. While white people who paid an application fee typically shelled out $50, Black renters paid $65, Latino applicants paid $80, and Asian American and Pacific Islanders paid as much as $100 for a single application.

A tight renting market

The average rental property in the U.S. right now costs 11% more than it would have last year. This largely boils down to the same factors that have turned the real estate market red hot in 2022: low supply and high demand.

In many cities, more properties were rented out last year than new ones entered the market, leading to an extremely strained supply. The Zillow report notes that the national vacancy rate is the lowest it’s been since 1984. 

Meanwhile, many small-to-medium-sized towns in the country saw huge population booms as the pandemic fueled a mass exodus from larger coastal cities. Combined, these factors mean that just like the home-buying market, renting is extremely competitive right now.

The surging rent prices are pushing many households to consider moving, but the Zillow report shows that people of color are facing many more obstacles than the average renter would expect. 

A history of discrimination in renting

The trouble for potential renters of color doesn’t end at higher upfront fees. Renters of color tend to be younger than white applicants, meaning they have less disposable income to handle the higher costs. People of color are also less likely to be looking for rents in smaller and cheaper rural markets, where white renters dominate.

The Zillow report is the latest reminder that discrimination based on race in the rental market is still with us.

A report last year by the National Bureau of Economic Research (NBER) found that racial discrimination against Black and Latino renters was pervasive in the majority of U.S. cities. And in a number of places where white populations heavily outnumber people of color—such as the Midwest—Black applicants are even more likely to be outright ignored by landlords.

Nearly 60% of Black households and more than half of Latino households were renting their homes last year, according to a Pew poll, but these groups are the most likely to encounter difficulties in getting an affordable lease—or even finding one at all. The NBER report found that renters of color were 17.3% less likely to find a home at all after an ignored inquiry.

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