The unrelenting surge in US housing costs has brought a pressing concern to renters: the proliferation of so-called 'junk fees'. These add-on charges, imposed by landlords with little transparency or accountability, are not only exacerbating an already dire situation but also creating a power imbalance that threatens tenants' very homes. The latest salvo in this battle is the Federal Trade Commission's (FTC) review of regulations on these fees, sparked by hundreds of public comments submitted by renters and advocacy groups.
For individuals like Farah Momin, who rents in Seattle, the issues run deep. "Landlords can impose fees through take-it-or-leave-it lease terms, and the cost/disruption of moving means that tenants may absorb unfair charges rather than leave," she explained to the FTC in April. Her words reflect a widely held concern that federal baseline protections are essential to prevent exploitation by landlords and create a more equitable environment for renters.
A Guardian analysis reveals that nearly 400 commenters out of 471 explicitly supported regulation or highlighted issues with these 'junk fees'. Meanwhile, over 60 industry representatives expressed opposition, arguing that new regulations would restrict reasonable fees and inflate base housing costs. They maintain that fees are an integral component of pricing structures within the rental sector.
The expansion of the property management industry has coincided with this surge in additional fees. This sector, which frequently uses fees to enhance profit margins, now accounts for 47% more of the US rental market than it did a decade ago, according to a Guardian analysis of census data. Professional management is particularly prevalent in larger complexes, specifically those with 50 units or more, where over half of all units are managed.
The renewed push for regulation follows years of debate and legal action. In 2022, the FTC considered regulating junk fees across multiple sectors but ultimately narrowed its scope to event tickets and short-term rentals due to industry opposition. However, significant FTC settlements in 2024, including a $48 million agreement with Invitation Homes and a $24 million settlement with Greystar over allegations of unfair fee practices, have reignited the rulemaking process.
The apartment industry groups express support for transparency but are strongly opposed to policies that would restrict their use of fees. This fundamental disagreement highlights a critical issue: what role should these additional costs play in the rental market?