TAMPA, Fla. (WFLA) — If you’re a person of color and renting, a new Zillow survey says you’re more likely to pay a higher deposit on your apartment. Sometimes, $150 more, in addition to additional application fees that white renters may not have to pay.
According to the Zillow study, higher costs for minority renters isn’t just confined to the apartment they end up living in. “Renters of color typically submit more applications and pay more in application fees, before they secure a place to live than white renters do,” Zillow said.
When they move in, the company said they also pay higher security deposits, adding to what Zillow calls “a financial burden for renters.” With rent prices up more in the past year than ever before, Zillow said “priced-out renters” are instead looking to move when their leases end, instead of renewing.
“About 2 in 5 renters who moved in the past year say a rent hike influenced their decision to move, and renters of color are especially likely to have experienced rising rents,” Zillow reported.
The disparity between white renters and minorities is not a recent or new situation.
Previous reports, also by Zillow, showed minorities were spending a bigger portion of their income on rent than their white neighbors. In November 2021, Zillow said the disparity in housing affordability was not an issue that developed overnight. On average, Black and Latinx communities spent between 6% and 8% more of their paychecks on rent than their Asian and white neighbors.
Minorities also paid higher application fees and had to fill out more applications before successfully renting.
“The typical white or Asian American and Pacific Islander renter submits two applications, while a Black or Latinx renter typically submits three,” Zillow reported. “More than one-third of renters of color submit five or more applications during their home search: that’s true of 38% of Black and Latinx renters, 33% of Asian American and Pacific Islander renters, and only 21% of white renters.”
Already paying more and making less, proportionally, to afford rent, Zillow said minority renters also paid higher deposits, and paid deposits more often. The report found minority renters were typically younger than their white counterparts, with “fewer years of potential income growth.”
“About 9 in 10 renters paid a security deposit last year, with the typical deposit coming in at $700, a significant amount of a typical renter’s wealth,” Zillow said. “Renters of color paid a security deposit more often (93%) than white renters (85%), and among those who paid a deposit, the median amount for renters of color was higher, too — $750, compared to $600.”
Other reports from 2021 showed minority homebuyers were denied opportunities to finance mortgages more often than other demographics.
As the price of entry into the homeowners’ circle across the U.S. remains an obstacle for many first-home buyers, the gap between attempt and success is larger for minorities. In addition to competition with their neighbors, now homebuyers are having to compete with investors.
In Tampa Bay alone, investor purchases were up 52% at the end of the fourth quarter in 2021, according to real estate firm Redfin. For some residents in Tampa, it’s dragging out the process of finding a home.
On top of fighting investors and having to battle with bids against other prospective buyers, inventory is just low. Tampa’s housing inventory in February had dropped 30% compared to the year before.
With buying at times out of the question, the limited inventory of rentals has pushed prices up. Zillow broke down the differences in what different groups of renters are dealing with when looking for their next place to live.
The data showed Asian renters paid the most for their deposits and application fees, but Black and Latinx renters had to submit more applications. Asian and Black renters had the highest percentage of security deposits required to rent.
| Demographic | % who paid security deposit | Median deposit | Share of renter applications | Median number of applications | Median application fee |
|---|---|---|---|---|---|
| All Renters | 88% | $700 | 86% | 2 | $50 |
| White | 85% | $600 | 84% | 2 | $50 |
| Black | 93% | $700 | 90% | 3 | $65 |
| Latinx | 91% | $650 | 87% | 3 | $80 |
| Asian American or Pacific Islander | 92% | $1,000 | 90% | 2 | $100 |
For fee amounts, number of applications, and price for security deposits, white renters were the least burdened of all renter demographics.