For Chicago renters, added fees mean people end up paying more for apartments
Application fees. Credit check fees. Move-in fees. Move-out fees. Such fees are pushing the true cost of renting an apartment in Chicago far above the listed price for rent.
When she rented her two-bedroom apartment last summer, a Northwest Side resident says she was told there was a $52 monthly “resident benefits package” fee, but it was optional.
But after she signed the lease for the $1,500-a-month apartment, she found out the fee wasn’t optional after all. It was required to be able to get access to an online portal to pay rent, request maintenance and obtain other services.
The renter — who asked that she be identified only by her first name, Monique, out of fear of retaliation from her landlord — already had shelled out the cash for a $1,500 security deposit and a $100 nonrefundable “administrative” fee. And she could also face hundreds more in other fees that were in her lease.
Application fees. Credit check fees. Move-in fees. Move-out fees. Even fees to be able to use a maintenance hotline. These days, such fees are pushing the true cost of renting an apartment in Chicago far above the listed price for rent.
The added charges are at an all-time high, housing advocates say. They say these “junk” fees can add hundreds to a renter’s monthly bill and make it hard for people to comparison shop and budget.
This is happening as apartment rents in Chicago reached a median monthly rental price this month of $1,950, up from $1,825 one year ago, according to Zillow.
“If I weren’t in such a stressful time in my life when I had applied to my apartment, I would probably have contested it or refused,” Monique says. “But I was at a point where I didn’t care.”
Other Chicago renters talk of feeling stuck at having to pay fees to secure an apartment in a competitive rental market. Some say they had no power to push back, knowing that another prospective renter would swoop in to grab the apartment.
Across the country, these types of rental fees are coming under increasing scrutiny. In July, the Biden administration announced a crackdown on rental fees, part of a broader campaign against add-on fees such as service charges, resort fees and overdraft fees. Such surprise fees cost Americans “tens of billions of dollars per year,” according to the Federal Trade Commission.
The rise of corporate landlords is fueling some of the rise in apartment fees, says Marie Claire Tran-Leung, senior attorney for the National Housing Law Project.
“There have been more fees as we’ve seen more corporate and big landlords taking over, especially in the multifamily space,” she says.
In a tight rental market, smaller landlords are mimicking the big players, housing advocates say.
Last summer, having moved to Chicago for a job, Katie LaBella was scrambling to find an apartment. The two-bedroom apartment she found in Bucktown, which she shares with a roommate, was listed at $1,995 a month. But she also had to pay a $237 application and credit check fee and a $700 move-in fee. And now she pays a $45 monthly fee for “bundled services” for trash and snow removal and access to a 24-hour maintenance hotline.
“I think I just figured that was how it is, but I also think I was very quick to just accept fees and stuff because I was more in a rush to find somewhere,” LaBella says. “Like administrative fees. It does make you wonder what is this actually going toward.”
And when LaBella and her roommate move out, they could face fees ranging from $15 for a missing light bulb to $150 an hour if the kitchen isn’t clean, under the terms of their lease.
Sampling of fees faced by one renter during the move-in and move-out process
‘Should be illegal’
Michelle Gilbert, legal and policy director of the Law Center for Better Housing, a nonprofit Chicago organization, says some fees seem disconnected from any real cost to the landlord. Like a fee to renew a lease or another to submit a maintenance request.
“That, to me, is the most outrageous I’ve seen,” Gilbert says. “You budget a certain amount for what your rent is going to be, and then it’s a couple hundred dollars more.”
For Monique, the fee if she renews her lease would be $100. Her lease also includes a $50 after-hours maintenance fee, issued on a case-by-case basis, and a $100 charge if she directly contacts the property owner. She’d also have to pay $175 if the management company issues a notice to vacate over a late rent payment.
Danny Wenz, who lives in Irving Park, says he managed to fend off an additional fee from his landlord, who wanted tenants to pay $50 if they installed cable or internet. This was in addition to the installation fee a provider would charge Wenz.
“I just think they should be illegal,” Wenz says of such add-on fees.
Landlords defend up-front fees
Landlords say it isn’t fair to describe what they say are necessary charges to keep their properties running as junk fees.
Roman Viere, vice president of Urban Alternatives, which owns and manages about 1,000 units in Chicago, the south and west suburbs and northwest Indiana, says the $30 application fee the company charges covers a vendor fee for a credit check and his staff’s time to process the paperwork.
If prospective tenants pay the application fee but miss out on a particular apartment, Viere says the company will find another unit or keep their applications active for six months.
As for the nonrefundable move-in fee, Viere says that’s easier than requiring a security deposit. He says turning over a unit after a tenant leaves can cost up to $2,000, making move-in fees necessary.
When there is a security deposit, the city of Chicago requires landlords to return the money, with interest, within 45 days of when a tenant moves out, minus the cost to cover any damages.
Viere says that he’s never charged a repair hotline fee — calling it “nonsensical” — but he does charge late fees.
“We get a little frustrated when we get thrown into a bucket where there’s some caricature of us lighting a cigar made of hundred-dollar bills,” he says.
Corey Oliver, chief executive officer of Strength in Management, says his company doesn’t charge some of the other fees that are in “super-posh” neighborhoods. It owns and manages several hundred apartments on the South Side and West Side.
“We’re very cognizant of our tenants’ budgets,” he says.
Oliver says his company’s $50 application fee — which includes a $29.99 credit check — helps weed out applicants who aren’t serious about renting.
“I don’t look to make a profit off of application fees,” he says.
Some tenants say they’d rather pay a security deposit, which they could recover with interest.
An Albany Park resident who asked that she be identified only by her first name, Rachel, says she wanted to move when her building’s new owner raised her rent by $300, but she knew that then she’d end up having to pay a hefty move-in fee to another landlord.
“It’s the principle of the thing,” she says. “What is the move-in fee for? I’m the one moving. Why am I paying you to move into a place?”
Eric Sirota, director of housing justice for the Chicago-based Shriver Center on Poverty Law, says upfront costs like application and background check fees can pose a barrier to potential renters, especially for people leaving incarceration and those living in poverty who are trying to find safe, stable and affordable housing.
“People are more likely to be rejected if they say they have a criminal record or an eviction record,” Sirota says. “So they wind up having to pay for more places and thus expend more application fees or background check fees. They often don’t know what the screening criteria is, so people sort of wind up paying for inevitable rejection.”
Paying late costs more
William Bernstein and his girlfriend found what they thought was the perfect Lake View apartment — near an L stop and restaurants. They paid a $600 nonrefundable move-in fee for the two-bedroom apartment with monthly rent of $1,850.
But due to what they say was a miscommunication about how to pay their rent, they were hit with a $77.50 late fee — the maximum allowed for their unit under Chicago’s city code. Their landlord requires rent payment to be mailed. Bernstein thought the couple would be fine as long as the payment was postmarked by the first of every month.
Not wanting to argue with their new landlord, Bernstein says they paid the late fee to ensure they started off their relationship on the right foot.
“We had found a good place that fits our budget, and we don’t want to jeopardize that,” he says. “And understanding that it’s a bummer, that there isn’t a lot of leverage that we have, but you gotta do what you gotta do.”
Cook County revised its landlord-tenant ordinance in 2021 to cap late fees at $10 plus 5% of the amount of monthly rent above $1,000. That means the maximum late fee for a $1,500 apartment is $35.
In Chicago, which has its own landlord-tenant ordinance, an older formula is used: $10 plus 5% of the monthly rent above $500, which would make the maximum late fee for a $1,500 apartment $60.
Gilbert says Chicago’s $500 threshold should be updated to more accurately reflect Chicago’s rising rents.
She’d also like to see a limit on move-in fees in Chicago. The Cook County ordinance allows move-in fees only if they’re in line with landlords’ “reasonable” costs.
Nationally, there’s a push to rein in rental fees that includes the proposed End Junk Fees for Renters Act, introduced last summer by U.S. Reps. Jimmy Gomez, D-California, and Maxwell Alejandro Frost, D-Florida. That bill, which is stuck in committee, would ban application and screening fees, prohibit credit score screening during the application process and require more transparency to rental pricing. It also would require that any late fees be applied to the following month’s rent as a credit.
In Minnesota, a law took effect Jan. 1 that requires landlords to disclose all non-optional fees. Landlords must provide a list of those fees — and the monthly grand total — on the front page of leases.
Connecticut recently banned application processing fees and set a limit on late payment fees.
The piling on of fees is more than an annoyance, says Tran-Leung, of the National Housing Law Project: “It not only puts the families in a more vulnerable position financially, it also puts them at risk of losing their housing.”
