It’s no secret that the American housing market has shifted dramatically since the onset of the pandemic. Amid what was initially a buying boom, there was a temporary reduction in rents, especially in large cities seeking to prevent a mass exodus. Two years later, we are witnessing record-breaking rental rates—a 16 to 30 percent hike, in some major cities—coupled with historically low rental inventory, resulting in what the leaders of at least one major U.S. city has called a “housing affordability crisis.” And, as is true of many American crises, including the pandemic, people of color are the most adversely affected.
As reported by Business Insider: “Black, Latin, and Asian Americans face much tougher hurdles in today’s rental market than their white peers, according to a new report from real-estate giant Zillow. By having to pay larger application fees and security deposits, renters of color have to fork over an extra $294 on average just to secure housing.”
As BI’s report indicates, the disparities occur at every level of the rental process. For starters, there can be a significant up-charge on application fees for Black, Latinx, and Asian-American renters, compared to the average $50 fee for white renters. That median rate is actually double for Asian-American renters, while Black and Latinx renters regularly encounter application rates of $65 to $80, respectively. This becomes even more egregious when coupled with the fact that Black and Latinx renters typically submit an average of three applications during a housing search, compared to an average of two for white renters.
Security deposits are also often inflated for renters of color. While white renters pay an average of $600—or, in 15 percent of cases, none at all—90 percent of Latinx, Black and Asian American renters can expect to pay an average deposit of $650, $700 and $1,000, respectively, according to BI. In a competitive rental market with historically low vacancies, there is no predictable cap on either rental rates or the cost to simply apply. And experts don’t expect a more balanced housing market anytime soon, pointing to a stagnation in sales due to rising prices and mortgage rates that might further bolster the demand for rentals.
And even once a rental is secured, the cost of renewing a lease may be too prohibitive to stay, another issue disproportionately impacting renters of color. As BI reports: “Forty-one percent of Asian American renters said they experienced a price hike at their previous rental before moving out, according to Zillow. That share rose to 56% for Black renters and 63% for Latin American renters. Just 38% of white renters faced such price increases.”
Story Credit: Maiysha Kai/thegrio
Photo Credit: Adobe stock/thegrio
