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(Bloomberg)—Renters of color are more likely to pay security deposits than White people, according to a new report from Zillow Group Inc. They also pay a higher security deposit, at an average of $750 compared with $600 for White people, and were tasked with paying application fees more often.
Renters of color also have to apply for more apartments to secure a home. The average number of rental applications for White or Asian American and Pacific Islander renters is two, while Black or Latinx renters average three. More than one-third of Black or Latinx renters report submitting five or more different applications.
That can quickly add up. The typical White renter pays a median application fee of about $50, while a typical Black renter paid $65, a typical Latinx renter paid $80 and a typical Asian American and Pacific Islander renter paid $100, according to the Zillow report.
One reason for the discrepancy is location. White people are more likely to rent in less expensive rural and midwestern markets, an area that a December report from the National Bureau of Economic Research found to be the most hostile region to potential Black renters. Meanwhile, Asian American and Pacific Islander and Latinx people more often rent in the west, home to many of the more expensive real estate markets.
Over half of Black and Latino-led households rent their homes, according to a Pew Research Group analysis of Census data. Black, Native American, and Latino renters are also more likely to have incomes at or below the federal poverty level, the National Coalition for Low-Income Housing found. No state currently has an adequate amount of rental housing available for extremely low-income residents.
Rental prices are shooting up across the country as the housing market continues to explode in almost every state. Rental prices for single-family homes jumped an average of 7.8% in 2021. Almost 70% of Americans — a record share — think rents will keep rising this year. And that is already causing people to seek new housing: According to the Zillow study, 63% of Latinx renters, 56% of Black renters, and 41% of Asian American and Pacific Islander renters said they were prompted to move due to a rent spike in their existing rental, compared with 38% of White renters.
To contact the authors of this story: Claire Ballentine in New York at [email protected]
Ella Ceron in New York at [email protected]
© 2022 Bloomberg L.P.
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