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Cities and states are trying to limit high application fees for renters

JUANA SUMMERS, HOST:

Across the U.S., people face sky-high rents and a housing shortage. But for many, the first barrier is the rental application fee. It can add up to hundreds of dollars. As NPR's Jennifer Ludden reports, states and cities are trying to limit the fees, but it's proving tough.

JENNIFER LUDDEN, BYLINE: In Spokane, Wash., James Lopez spent months looking for another house to rent. He and his wife have three children at home, including a young adult daughter. And like most everywhere, that means each place they apply, all three adults must pay an application fee, and it typically covers a background and credit check.

JAMES LOPEZ: And that fee can run anywhere from $35 each up to, I've seen, $85 apiece. Like, right now we are not able to put that money out.

LUDDEN: Lopez already pays half his income for rent. He holds two jobs and a side gig with DoorDash to make it work. And he's had to stop his housing search for now. He says it's frustrating that application fees are not refundable, even when dozens apply for the same place.

LOPEZ: It's like, wow, they're taking all these people's money knowing that they're not going to have a chance to get it. And do you really need that money?

LUDDEN: Spokane's City Council is debating a measure to limit application fees. And this month California became the latest in a string of states and cities to enact such a law. Assembly member Chris Ward, who represents San Diego, says the state's rental market is incredibly tight.

CHRIS WARD: And we've heard reports for people applying for up to 10 or 12 units or more in order to secure their one place to live.

LUDDEN: Ward says the new California law he sponsored can save renters money by letting them get their own basic screening from a third party that's good everywhere for 30 days. It would include income, rental history and any evictions.

WARD: The renter would just have to do that one time and then, by procuring this very secure document, would be able to use that when approaching a would-be landlord to rent that unit.

LUDDEN: Recent reusable screening laws in Maryland and Washington state also include a credit check. Last year Eugene, Ore., took a different approach. It capped rental application fees at $10. Tenant activist Kevin Cronin with the nonprofit Housing Oregon says it's part of a broader push to keep people from falling into homelessness.

KEVIN CRONIN: You can lose 10 bucks and move on, right? It's not the end of the world. But losing 75 bucks, you know, three or four times, you're out of cash to look for a place.

LUDDEN: All these measures face strong opposition from landlords. Nicole Upano is with the National Apartment Association.

NICOLE UPANO: We never agree that there's a one-size-fits-all solution for any housing policy.

LUDDEN: She says screening is important for tenant safety and to avoid future evictions. Landlords may want more data, say, if a reusable check does not include criminal history. And she says they should be able to charge a reasonable fee for it.

UPANO: They have to make those determinations about the screening company, what they use to create their policies. And they need that discretion to figure out how to do that well.

LUDDEN: But even where laws to limit application fees do exist, they're hard to enforce. In fact, it turns out Vermont banned the fees in 1999. Yet Legal Aid attorneys there say they are still widespread. Same in New York, which more recently set a $20 cap and allowed reusable screenings. Stephanie Rudolph of the Legal Aid Society in New York City says there's not been a lot of education, so some landlords and tenants may be unaware. And the law does not spell out damages if they don't comply.

STEPHANIE RUDOLPH: But then there's also just the fear that if you don't do exactly what the broker or the landlord tells you, you are not going to get the apartment.

LUDDEN: That's not wrong, she says, which is why even she advises many clients to just pay the fee, even if it's not legal. Jennifer Ludden, NPR News.

(SOUNDBITE OF JAY-Z SONG, "COMING OF AGE") Transcript provided by NPR, Copyright NPR.

Jennifer Ludden helps edit energy and environment stories for NPR's National Desk, working with NPR staffers and a team of public radio reporters across the country. They track the shift to clean energy, state and federal policy moves, and how people and communities are coping with the mounting impacts of climate change.