Junk fees growing in Texas apartments, according to recent study

AUSTIN (KXAN) -- Sanford Garrett is a 59-year-old visually impaired veteran who lives off of what he calls a "broke income," but he makes it work.

"Every dollar and cent counts," Garrett explained. He has lived in the same two-bedroom apartment for the past 13 years, and has seen his complex change ownership multiple times.

Since the pandemic, though, he has noticed an increase in junk fees added on to his monthly rent payment. Things like valet trash and pest control fees. It used to be he had to work directly with the cable company if he wanted that service, now it's a mandatory fee he has to pay to the apartment complex, even if he does not want cable.

Garrett lives less just steps from the dumpsters where the trash is thrown. He would rather walk his trash to the dumpster than pay $25 a month on valet trash. He also does not understand why he's paying for pest control every month when he only uses the service a few times a year.

"Don't be charging people for that service when they're not using it," Garrett said.

Garrett is not alone when it comes to these mandatory "junk" fees. They are hidden fees that are not advertised on lease quotes or apartment brochures, but instead can be a surprise to tenants after they sign their lease.

Junk fees in Austin

The Housing Policy Clinic at the University of Texas released a report highlighting this issue of junk fees in Texas, and is calling for more transparency.

The report breaks down these junk fees into two categories: mandatory recurring fees and mandatory non-recurring fees. The recurring fees are services and amenities that tenants are not allowed to opt out of, such as valet trash.

Non-recurring fees are associated with the cost of applying to an apartment and can also be associated with tenant behavior. For example, an apartment complex charged an Austin man a $300 penalty for having a grill on their deck, according to the report.

"They're becoming much more widespread and the level of junk fees is becoming quite alarming," Heather Way, the director of the Housing Policy Clinic, said.

And the fees Way and her team found were odd. Some fees included boilerplate management fees, fire hydrant fees, and administrative fees.

"These kinds of fees that leave you scratching your head and wondering what's going on here," Way said.

The problem is the lack of transparency. The report found that the Altura apartments, where Garrett lives, failed to disclose some mandatory recurring-fees in a leasing quote. There are even examples in the report where some apartments added fees midway through a lease.

An even more alarming issue is some apartments in affordable housing programs are utilizing junk fees as a work-around to rent restrictions. For example, the report states that apartments in Hyde Park recently acquired by the city of Austin and the Austin Housing Conservancy were subjecting their tenants to add-on fees that were not disclosed in the lease quote.

"Tenants are already feeling the squeeze in this Austin housing rental market and then these fees are only making it that much harder for tenants to be able to afford living in the city," Way said.

Hope for fixing the issue

The report offers two solutions to this issue. One, a city and state-wide effort to require disclosure and transparency of these fees to tenants before they sign a lease. The second opportunity would be for the city's Housing Department to close loopholes in its affordable housing program to protect tenants from junk fees.

A spokesperson for the city's Housing Department said it is aware of the report. They added, "In the coming months, staff will again work with the development community and advocates to identify areas for improvement. The items discussed in this report will be part of that conversation. We look forward to a more transparent process and equitable outcome for all parties."