High rents, added fees prompt calls for transparency in Vegas rental market

It’s an issue prospective renters will be all too familiar with: the advertised rent on your dream apartment might not be telling the whole truth. Lurking behind the listing, fees are added on to that base cost.

These might be application fees, administration fees, mandatory trash collection fees and more.

The point in the application process at which these fees are revealed varies, experts say. While some companies might disclose it before a potential tenant invests time and money in submitting an application, others might wait until it’s time to sign — or even later.

At a community event in June, nonprofit workers advocated for an effort by the Biden Administration to eradicate so-called “junk fees,” defined by the Federal Trade Commission as “hidden and bogus fees that can harm consumers and undercut honest business.”

Local renters such as 38-year-old Amber Krawczyk showed up to learn more about the “junk” fees plaguing her experience apartment hunting, such as a mandatory trash collection fee even when an apartment’s dumpster sits feet away.

But are these apartment fees truly “junk” fees that need to be dumped? Some Nevada legislators and real estate agents argue that they can serve a valid purpose, and that the alternative may be more burdensome for consumers.

Need for transparency

In 2023, a senate bill called SB78 passed both chambers of the Nevada Legislature. The bill, spearheaded by Senator Fabian Doñate, would have regulated additional costs for renters, such as hefty application fees.

“When I was moving to Carson City last year, I faced a lot of hurdles myself,” Doñate said.

His experience relocating for the 2023 legislative session — which included being charged more for being a short-term renter — inspired him to take action against these fees.

“It was a very simple bill that I thought was balanced,” Doñate said. But despite passing both chambers, it was vetoed by Governor Joe Lombardo.

The senator, whose parents are landlords, said that landlords need to communicate openly with prospective tenants. “Tenants deserve to know how much they need to pay upfront,” Doñate said.

But if a landlord can prove that the additional fees are needed to cover the cost of a new tenant moving in, Doñate said he has no issue with them as long as they’re transparent.

Moving forward, Doñate is shifting his attention away from regulating fees and towards the availability of housing in the valley.

‘It’s hard out there’

Doñate said he will be introducing a housing bill next year that focuses more on increasing the volume and output of housing available to tenants. “I’ve seen the housing crisis firsthand,” the aspiring homeowner said. “It’s hard out there.”

This is a move backed by Azim Jessa, chair of the Nevada Association of Realtors Legislative Committee.

Jessa, who served as a source of advice for Doñate when he was drafting SB78, said the fees are an issue that has graced the committee floor. But while the committee does believe that rents are too high, its answer is more supply, he explained.

Jessa agreed that additional fees, which he was hesitant to refer to as “junk” fees due to the term being vague, can be a barrier to entry for renters.

But if housing is more widely available and competition goes up, he hopes that as prices come down, so will fees.

Best practices

Paul Rich, state chapter president of the National Association of Residential Property Managers, said that while he’s heard “rumblings” at a federal level that apartment fees are all junk fees, he said many don’t fit the bill.

Fees such as sewer and trash collection fees function as reimbursements for costs that landlords are often responsible for and might be charged a late fee for if payments are missed, Rich explained.

But he agreed that disclosure is paramount when it comes to best practices. “Many of us give that disclosure even in the application,” Rich said.

While the association advocates for best practices, Rich said no one can control what bad actors might do. But he is wary of the unintended consequences of regulating these fees.

“It’s going to be baked into the cake somehow,” Rich said. He fears that if fees are regulated, landlords will raise rent without disclosing what service the extra cost is providing.

“If you just raise the rent accordingly, there’s no transparency,” he said.

Are legislators giving up on advocating against fees?

Assemblywoman Cecilia González, who co-sponsored SB78, said that the conversation surrounding increasing housing options rather than regulating fees makes her feel “frustrated.”

“I move every year,” González said. “I definitely feel that strain.” She said that the Las Vegas valley needs more housing units due to physical and economic growth that is outpacing physical infrastructure.

But, “that doesn’t negate the fact that there are predatory fees when it comes to renting an apartment,” she said. “We don’t need to have one or another.”

The assemblywoman said she does feel that many apartment fees can be considered “junk” fees.

While González said she seeks the risk in a lump sum approach, she feels that this doesn’t mean landlords can’t still breakdown the cost of rent. “You can do both,” she said. “You don’t just abandon the issue.”