Over opposition from the Austin Apartment Association, City Council passed a resolution Thursday designed to protect renters from unexpected fees tied to lease agreements.
The agenda item, sponsored by Council Member Ryan Alter, directs the city manager to work with relevant stakeholders in preparing an ordinance that would apply to landlords owning five or more rental dwellings.
The ordinance would require property owners and managers to provide potential tenants with a list of all costs, ranging from application fees to utility connections, and all recurring fees such as fees for pest control, facilities, trash collection and insurance.
Fees related to lease violations or repairs for damages caused by tenants would not be included in the ordinance.
The resolution states that the Texas Apartment Association’s lease template includes a space for additional fees to be provided to prospective tenants, but there is no requirement that the fees must be disclosed to tenants before signing a lease.
Theresa Ebner, president of the Austin Apartment Association, told Council that the fee disclosure requirement would present challenges as it relates to third-party vendors that provide for trash collection, pest control and internet service, among other things.
“It is standard practice in the industry to offer general cost summaries, but real-time fees can fluctuate due to the change in the third- party service providers,” she said. Such an ordinance, she added, “could unintentionally lead to more stringent regulations” as well as increased liabilities for property owners.
Another Apartment Association representative, Emily Blair, said that the U.S. Department of Housing and Urban Development has recognized the Texas Apartment Association’s lease template as a model approach for transparency of rental fees and that it has become an industry standard since 2022.
The resolution further points to a recent meeting President Joe Biden convened as part of his administration’s efforts to eliminate hidden fees in rental housing, and that the Federal Trade Commission proposed a rule last year to prohibit hidden fees, or “junk fees,” in business and rental housing operations. At the state level, the resolution states that the Legislature has considered legislation that would prohibit hidden fees.
“When you talk about affordability, it’s not just about the price of a home for renters,” Alter said before the unanimous Council vote on the consent agenda. “It’s about what they’re paying monthly. And when these fees are hidden, whether it’s at the leasing stage or popped on somebody months in, that’s unfair and a lot of people can’t afford it.”
Council Members Vanessa Fuentes, Zo Qadri, Chito Vela and José Velásquez co-sponsored the resolution, which calls for the city manager to return to Council with an ordinance by June 2025.
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