Renters of color saddled with more upfront costs

On the heels of a finding that rental applicants of color were more likely to be ignored than white ones, a Zillow analysis shows when they get the apartment, they typically must pay more upfront.

The report found renters of color  were obligated to pay security deposits more frequently than their white counterparts. Moreover, their deposits were $150 more than those paid by white renters.

Additionally, Black and Latinx renters submit more applications than white and Asian American and Pacific Islander renters, perhaps because that is necessary for them to land an apartment.

“Renters of color are especially likely to experience rising rents, and when they shop for a new rental, generally report higher upfront costs — restricting the mobility that is often held up as a benefit of renting,” said Zillow population scientist Manny Garcia.

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According to Zillow, about 9 in 10 renters fork over a security deposit. But renters of color paid a security deposit 93 percent of the time, compared to only 85 percent for white renters. When white renters did pay a security deposit, the median cost was $600, compared to $750 for renters of color.

Zillow found the typical renter has $3,400 in savings, and 38 percent have less than $1,000, making every additional dollar of a security deposit a meaningful one.

Application fees were a similar story. White renters who hit with fees paid the lowest median cost last year, $50. Black renters’ median fee was $65. The typical cost was even higher for Latinx renters ($80) and Asian American and Pacific Islander renters ($100).

Factors besides racism that could contribute to the disparities include income and geography. For example, white renters are more likely to rent in rural areas, which tend to be less expensive than big population centers on the coasts, Zillow noted. The standard security deposit is one month’s rent.

The extra costs add up even more when considering the extra legwork many renters of color must do in today’s tight rental market.

Last year, 61 percent of all renters applied for multiple properties, an increase of 5 percentage points from 2020. But while the typical white or Asian American and Pacific Islander renter submitted two applications, the typical Black or Latinx renter submitted three, and 38 percent of them submitted at least five.