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People of color face higher rental costs than White Americans, Zillow finds

Why rents are increasing across the U.S.
Why rents are dramatically increasing across the United States 02:18

Black and Hispanic Americans are paying extra money to secure rental housing in the U.S. compared with Whites, according to Zillow.

In a report this week, the real estate data firm said that, regardless of race, Americans paid an average of $700 in security deposits when renting an apartment. Yet renters of color paid $750 while White renters paid $600. White renters typically paid $50 for a rental application fee while Black Americans paid $65; Hispanic applicants paid $80 and Asian Americans paid $100. People of color also typically must submit more rental applications in order to find a place to live as well as pay more in related fees than white renters, Zillow concluded.

Zillow attributed the higher fees and number of housing applications for renters of color partially to their age, noting that they tend to be two years younger than the median White renter. White Americans also are more likely to rent in rural areas and in the Midwest, which are typically cheaper.

But racial disparities in rental costs also suggest many landlords often violate federal law, said Dan Corbitt of Housing Opportunities Made Equal, a nonprofit in upstate New York that fights housing discrimination. For example, some housing providers can sidestep fair housing laws by charging higher application fees for people with subpar credit sores, which tends to disproportionately affect lower-income renters.

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Zillow said it decided to look into price discrimination among renters so that lawmakers will craft better housing policy.

"Everyone deserves to find a home they love," Zillow researcher Manny Garcia, who produced the report, told CBS MoneyWatch. "Yet far too many people seeking housing encounter barriers at seemingly every turn while renting, buying, getting a mortgage and more."

Making them fall in line

Noting the long legacy of racism in U.S. housing, such as redlining, Nikitra Bailey of the National Fair Housing Alliance said some landlords continue to engage in practices "rooted in this unfounded association between race and risk" in which people of color are viewed as likely to consistently pay their rent.

Corbitt and other housing advocates said bias in housing persists in part because people who may be subject to discrimination often do not report it, adding that victims often never discover they are paying higher fees or face a higher rate of rejection than White renters, he added.

Anyone who paid more money for housing during an unequal application process can sue the provider and have the money refunded, Corbitt said. However, that often involves a lengthy, expensive court battle. 

"For most people, especially folks who are just desperate to get a roof over their families head, that's really not an option," he said. 

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Still, it's important for rental applicants to report discrimination because that allows agencies like the U.S. Department of Housing and Urban Development (HUD) to prosecute the offenders, Bailey said.

HUD has the legal authority to make even housing providers stop unfair practices. 

"And once you go after the larger fish, the rest of them fall in line," Corbitt said.

People of color appear to be paying more upfront costs at a time when rents have skyrocketed across the nation. The average monthly rent rose 10% in 2021 and is projected to grow another 7% this year, according to 

Rents are soaring because the U.S. hasn't built enough housing and millions of millennials are now ready to move into their own place, creating high demand but very little inventory, Redfin chief economist Daryl Fairweather recently told 60 Minutes.

Rental costs are just one barrier people of color face in finding housing. A separate Zillow report found that Black Americans are denied a mortgage 84% more often than White applicants. Black Americans said a low credit score often prevented them from securing a home loan, according to Zillow.

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