Zillow’s latest market report reveals Black, Latinx and Asian American Pacific Islander renters spent $15 more per application than their white counterparts. Renters of color also face higher denial rates, with the typical Black and Latinx renter applying five times before being approved.
In these times, double down — on your skills, on your knowledge, on you. Join us Aug. 8-10 at Inman Connect Las Vegas to lean into the shift and learn from the best. Get your ticket now for the best price.
Renters across the board face higher housing costs with rent growth reaching 6.0 percent year over year in March to $1,996 per month for the typical one bedroom, according to Zillow’s latest market report.
However, renters of color are bearing the brunt of exorbitant initial rental costs due to costlier application fees, higher denial rates and greater security deposits.
“Monthly rent prices are nearly the highest they’ve ever been, and unfortunately for so many people, finding a place to rent comes at an even higher cost,” Zillow Population Scientist Manny Garcia said in a written statement. “We so often hear about the benefits of renting and the flexibility it offers, but disparities persist, and many renters of color aren’t granted the same mobility as others because of higher upfront costs.”
The data, gleaned from Zillow’s latest Consumer Housing Trends Report published last July, reveals Black, Latinx and Asian American Pacific Islander (AAPI) renters face 43 percent higher application costs than their white counterparts. The typical renter of color spends $50 per rental application, while the typical white renter spends $35 per application.
Black and Latinx renters (38 percent) are also nearly twice as likely than white renters (21 percent) to submit five or more applications before securing rentals — equaling a total application spend of at least $250. Meanwhile, the typical white renter spends $35 on rental applications and 48 percent of the time can secure a unit after making two submissions — equaling a total application spend of $70.
In addition to higher application fees, renters of color also tend to have more expensive security deposits.
Eighty-five percent of renters provided a security deposit in 2022, with the typical deposit ranging between $500 and $999. However, 61 percent of Latinx renters and 73 percent of AAPI renters reported spending at least $500 for their deposits — with nearly a third of each group spending at least $1,000.
“This means that for renters who are already struggling financially, such as the 38 percent who said they couldn’t afford an unexpected expense of $1,000 in 2021, security deposits could be a significant obstacle to signing a new lease,” the report reads.
Beyond racial demographics, the July report also highlights the role of sexual and gender orientation on renters’ experiences. Similar to renters from communities of color, LGBTQ+ renters reported higher application fees and greater denial rates. LGBTQ+ renters also move more frequently than their cisgender heterosexual neighbors — something that results in a higher lifetime cost of renting.
“LGBTQ+ renters were more likely to report paying an application fee: 66 percent of LGBTQ+ renters said they paid one – higher than 57 percent of cisgender heterosexual renters,” according to the report. “LGBTQ+ renters are also more likely to submit a greater number of applications: 68 percent submit two or more – compared to 57 percent for cisgender heterosexual renters.”
“And 19 percent submit 5 or more – just above 15 percent for cisgender heterosexual renters.”
Garcia encouraged renters of color and renters from other marginalized backgrounds to educate themselves about fair housing and if their states protect renters with a different source of income (e.g. housing choice vouchers, etc.). At last count, 18 states and more than 90 cities and counties offer source of income protections.
In 2021, the U.S. Department of Housing and Urban Development said sexual orientation and gender identity are now protected under the Fair Housing Act, which prohibits discrimination based on race, color, religion, national origin, sex, familial status and disability — an important step toward granting unilateral protections for LGBTQ+ Americans through the still-stalled Equality Act.
“Given these affordability constraints, it’s especially important for renters to be aware of their rights in the communities where they are searching. Zillow rental listings display available local legal protections, including source of income and LGBTQ+ anti-discrimination laws,” the report reads.
“While source of income protections do not currently exist in all 50 states, Zillow believes families who depend on alternative sources of income, including housing choice vouchers, should be able to secure a comfortable home, free from discrimination.”