Junk Fees, Like Junk, Pile Up
How landlords add on extra charges raise the cost of housing

By Caroline Nagy, Senior Policy Counsel for Housing, Corporate Power and Climate Justice

Does paying a $20 “convenience fee” each month on top of your rent just to pay your rent sound reasonable to you? What about paying your landlord a “January fee” just because it happens to be January? Or paying an extra $40 a month for a mandatory “valet trash service” you never wanted in the first place? As unfair and infuriating as these scenarios may seem, paying outrageous, indefensible junk fees is an increasingly common reality for renters in this country.

Junk fees are the additional, unexpected, and indefensible costs that corporations impose on people on top of the agreed upon price. They can be pretty steep and often have no real relationship to the cost of the so-called service that fee purportedly covers. Junk fees include pricey “service fees” on concert tickets or “resort fees” guests pay to use their hotel’s facilities. Corporate landlords impose mandatory junk fees renters  on top of their agreed-upon rent for basic services that should be included in their rental payment or for extra services they should be able to opt out of. Junk fees may be buried in the lease fine print or not disclosed at all. Renters are stuck with them even if they don’t want the service.

Rental junk fees are not just a random occurrence, they are a result of the increasing dominance of corporate landlords in the U.S. rental market. These landlords increase profits by raising rents and imposing junk fees on tenants. Junk fees are heavily promoted by RealPage, a company that markets algorithmic rent-setting services to corporate landlords. The Justice Department filed suit against RealPage this month for a price-fixing scheme that raises the rent for millions of families. This systemic issue is driving up housing costs and contributing to record levels of housing unaffordability: today, half of all tenants spend over 30 percent of their income on rent, with 27 percent spending over 70 percent of their income on housing costs alone.

For struggling tenants, junk fees are not just an annoyance; they can mean the difference between paying the rent on time, buying adequate food or medicine, or joining the record numbers of people experiencing homelessness in the United States. For big landlords, on the other hand, junk fees fuel their oversized profits: in the first quarter of 2024, the six largest publicly traded apartment companies saw their combined net incomes climb by nearly $300 million.

Junk fees are deceptive and harm U.S. families, adding up to billions a year. The Federal Trade Commission and the Consumer Federal Protection Bureau have rightly targeted junk fees as a top consumer protection priority by regulating excessive credit card late fees and proposing to ban charging hidden fees that aren’t clearly disclosed as part of the total cost upfront.

But there’s more to be done: the FTC can and should use its enforcement power to investigate and sanction corporate and private equity landlords that charge unfair and unreasonable junk fees as unfair or  deceptive practices. Enforcement priorities should include improperly disclosed junk fees, junk fees for legally required services (like trash collection), junk fees that charge more than the service actually costs, or junk fees that prevent competition by requiring tenants to choose a particular internet or other service provider. The FTC should also finalize a strong rule to ban junk fees in rental housing as an unfair and deceptive practice and require websites that advertise rental properties to fully disclose all fees upfront. States can also crack down on junk fees: Maine, for example, recently banned tenant application fees above the actual cost of conducting background or credit checks.

Consolidated corporate power allows airlines, banks, hotels, landlords, and more to jack up prices by imposing junk fees on top of the agreed upon price. These fees nickel-and-dime families and make it harder to stay afloat or get ahead. The Biden administration’s attention to these unfair fees is welcome and long-overdue, including the recent antitrust suit against RealPage. Eliminating junk fees in rental housing should be at the top of this agenda. It’s a nightmare to get gouged for concert tickets, it’s a crisis to get slammed with junk fees on top of your rent.