AUSTIN, Texas — Austin City Council members will look at increasing transparency around rental fees for prospective tenants in the city.
An item on Thursday's agenda would start the process of requiring landlords to disclose any application or administration fees.
It would also reveal mandatory fees for things like trash, facilities, or utilities, as well as fees for optional services or amenities like parking or cable to prospective renters when they apply.
District 5 Council Member Ryan Alter said that some landlords are not upfront about their fees, leading to people paying hundreds more every month than expected.
"Too often, someone will show up, and they might pay a few hundred dollars to apply just to live there, and then find out when they get their lease, they're going to have to pay hundreds more per month that they don't even know about," Alter said.
Other times, Alter said landlords might disclose those fees to renters but hide them away somewhere in the lease. Alter wants the fees to be displayed more clearly and transparently.
"What we want to do is bring transparency, make it easier for people looking for a place to live, to be able to make a true comparison about the most affordable place for them," Alter said.
The Texas Apartment Association's lease template, which several landlords use, includes a space for additional fees to be reported, but there is no requirement that the fees be communicated to residents before they sign a lease.
According to the U.S. Census Bureau, more than half of Austin residents rent as opposed to own.
Alter said hidden fees have become more commonplace in recent years.
"As there's been greater competition, we've brought more housing to the market, and so you see rents fall, but unfortunately, you've seen landlords try to sneak in some of these fees to make up for some of those rental decreases," Alter said. "We want to make sure that is not something that continues going forward."
A University of Texas School of Law study published in January 2024 looked at what they called "junk fees" in the Texas rental housing market. The study said that obscuring the actual cost to the prospective renter prevents renters from being able to compare shops and creates barriers to accessing affordable housing.
"I think this is both an issue of affordability and fairness," Alter said. "It's not fair for someone to be surprised with fees, whether that's during the leasing process or once they've already signed the lease to move in. If we want to make this a fair, affordable place to live, we need to require this kind of disclosure so as not to surprise people with additional costs."
In October 2023, the Federal Trade Commission proposed a rule prohibiting hidden fees in business and rental housing operations. President Joe Biden recently held an event at the White House to discuss hidden fees in rental housing.
The resolution calls for the ordinance to apply to landlords who own five or more dwellings.
This is the first step in the process of requiring landlords to disclose these fees to renters. If city council members give the green light, they will ask City Manager T.C. Broadnax to explore the feasibility of the ordinance and gather feedback on the proposed regulations from stakeholders.
Alter said he wants to get this item passed before a lot of people's leases come up this summer. The resolution asks Broadnax to bring a proposed ordinance up before council by the the end of June.