Renters of color saddled with more upfront costs

White tenants not asked to pay security deposits as often: Zillow

National /
Apr.April 07, 2022 07:00 AM

(iStock / Photo illustration by Priyanka Modi for The Real Deal)

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.

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.





    Related Articles

    arrow_forward_ios
    Zillow CEO Spencer Rascoff is stepping down as his co-founder takes over
    Zillow CEO Spencer Rascoff is stepping down as his co-founder takes over
    Zillow CEO Spencer Rascoff is stepping down as his co-founder takes over
    Placeholder image
    Zillow to pay $50M for StreetEasy
    Zillow to pay $50M for StreetEasy
    (iStock, Illustration by Kevin Cifuentes for The Real Deal)
    Some 40 million US homes at risk from extreme 2022 weather
    Some 40 million US homes at risk from extreme 2022 weather
    Hana Ranch in Maui. (Sotheby's International)
    Mammoth Maui cattle ranch hits market for $75M
    Mammoth Maui cattle ranch hits market for $75M
    One of the pools at the Brooklyn Tower. (TheBrooklynTower.com)
    Life Time Group to manage 120,000 square feet of amenities at Brooklyn’s +1,000-foot tower
    Life Time Group to manage 120,000 square feet of amenities at Brooklyn’s +1,000-foot tower
    The U.S. housing market sets new record for home sales and prices in July 2020. (iStock)
    Moody’s chief economist says housing correction — but not crash — is on the way
    Moody’s chief economist says housing correction — but not crash — is on the way
    Brokerages take different approaches to social media ads
    To automate or customize? Brokerages split on social media ad formulas
    To automate or customize? Brokerages split on social media ad formulas
    Skyline Tower in Hunters Point, Queens, and Downtown Brooklyn’s 11 Hoyt are the two largest condo developments in their boroughs. (Skyline Tower, 11 Hoyt, iStock)
    TRD Pro: Ranking Brooklyn, Queens condo pipeline hotspots
    TRD Pro: Ranking Brooklyn, Queens condo pipeline hotspots
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...