Renters looking for a more affordable place to live are spending hundreds of dollars applying for apartments, prompting Democratic lawmakers to set limits on how much landlords can charge for these applications.
A bill to cap apartment application fees cleared the House Finance committee on Monday by a 7-6 vote along party lines. The bill would cap the fee at the actual cost to screen the applicant.
There is no legal limit on how much landlords can charge for applications. Rep. Chris Kennedy, D-Lakewood, a lead sponsor on the bill, said he wants to make sure landlords are not profiting off these fees. He also said renters should have more rights.
“It’s tackling just another facet of the affordability problem,” Kennedy told The Colorado Independent.
Housing costs in the state are rising as population growth in the Front Range outpaces the construction of new housing. Nearly half of Colorado renters spend more than a third of their income on housing, according to the Bell Policy Center, a Denver-based economic think tank. Low-income residents pay an even larger share of their income, according to the group’s report on economic mobility.
This means falling behind on rent for people like Jenee Donelson, who said she was evicted in 2012. As she paid off the eviction, she said she applied to several apartments, spending about $400 total on applications, which dipped into her grocery budget.
“Most of the places I applied to never called me back,” Donelson told the committee.
The bill would require landlords to tell unsuccessful applicants why their application was denied in writing. It would also require landlords to provide an itemized receipt of the costs to process the application.
But these provisions are drawing pushback. The Colorado Apartment Association said it would increase the administrative burden to process applications. This then could increase the cost of housing, according to Drew Hamrick, an attorney with Tschetter Hamrick Sulzer, P.C., who spoke for the trade group.
“All costs to the service provider end up being paid for by the customer,” Hamrick told the committee.
Enforcement would be complaint-driven; if the landlord fails to meet any of the requirements set out in the bill they could pay a fine equal to twice the cost of the application fee in addition to the applicant’s court and attorney fees.
The bill, which does not have any Republican sponsorship, will have trouble clearing the Republican-controlled Senate if it makes it through the House. It is scheduled to be considered next by the House.
There are other bills in the Capitol dealing with the issue of affordable housing: A bill to expand a program that offers tax credits to companies that build affordable housing cleared the Senate Finance committee last month and a bill that would give tenants more time to settle up on unpaid rent before being evicted is under consideration in the Senate.
Another bill that would place a fee on plastic bags to shore up money for affordable housing grants died in committee last month.