Lawmakers say capping rental application fees could help struggling tenants

Supporters say the bill could help address the ever-increasing cost of housing in New Jersey. (Photo by Dana DiFilippo | New Jersey Monitor)

Lawmakers are weighing new limits for rental application fees in what they say is a bid to address the ever-increasing cost of housing.

A bill that would prohibit landlords from charging application fees greater than the cost of a credit check and limit the cost of rental property applications to $50 advanced out of the Senate Community and Urban Affairs Committee Monday. Two Hudson County Democrats, Sens. Brian Stack Raj Mukherji, introduced similar bills that were merged into one Monday.

Stack, who also serves as the mayor of Union City, said he knows some tenants who have applied for different apartments and paid as much as $150 for each application.

"It's a major financial issue for these tenants that are looking for apartments," he added.

The state's consumer affairs director or attorney general would enforce the bill, and landlords could face $1,500 for violations. One- and two-family homes would be exempt from the legislation, Stack said.

The New Jersey Builders Association and New Jersey Apartment Association opposed the measure. Jeff Kolakowski of the builders association said tenants would pay in some other way, potentially with increased rent.

"I think it's laudable, I just don't think it's the right housing policy to get to our housing affordability crisis," he said.

Nicholas Kikis of the New Jersey Apartment Association noted apartment owners incur many costs, including annual fees to register their units. When screening applications, they run costly credit and criminal background checks, and there's a growing need for fraud prevention services, he said. Landlords and building owners have to manage the "cost and complexity" that goes into new fees, he said.

Stack said landlords need to meet in the middle with tenants who are facing financial hurdles just to find housing. Landlords may have one apartment available but still accept 30 applications for it, he said.

"Twenty-nine families are not getting that unit," he said. "And many of them know it and continue to take the application, and many times, there's nothing even done. There's no proof back to the tenant what was done with the fee."

Sen. Holly Schepisi (R-Bergen) agreed with some concerns from building owners, but stressed that the apartment application process has to be revamped. She suggested looking into creating a "common application," similar to what universities use, so that landlords and tenants don't have to pay for multiple credit checks.

The bill advanced out of the committee by a 4-0 vote, with one abstention from Schepisi. The Assembly companions to the bill have not yet advanced.