As affordability challenges persist, AG Brown urges FTC rulemaking on unfair and deceptive rental housing fees

Washington AG Nick Brown and a bipartisan coalition of 27 state attorneys general today are asking the Federal Trade Commission (FTC) to move forward with a proposed rulemaking on hidden and deceptive rental housing fee practices.

Last month, the FTC published an Advance Notice of Proposed Rulemaking (ANPR), seeking input from the public about whether a rule is needed to prevent unfair or deceptive fee practices in connection with rental housing. The coalition of state attorneys general filed this comment letter in support of the FTC moving forward with a notice of proposed rulemaking.

As the chief enforcers of their states' consumer protection laws, the attorneys general commended the FTC for considering action on this growing and worsening problem as the country grapples with an affordability crisis in the rental housing market. The attorneys general also stress in the letter that any rulemaking by the FTC must preserve the authority of states to regulate and supervise rental markets.

"Housing affordability is one of the top concerns among Washingtonians, which is made worse when people deceive tenants about costs or undermine competition in the housing market," Brown said. "The federal government can help our residents by adopting rules that rein in such unfair and deceptive practices."

The letter, which can be read here, outlines the harms to consumers and fair competition as a result of unfair and deceptive rental fee conduct. For instance, many renters face "bait-and-switch" tactics: advertised rents appear low, but mandatory fees and charges are revealed only late in the process or after move-in.

These practices aggravate the housing affordability problem by hiding the true cost of rent and trapping consumers in higher rent payments than they expected. They also distort competition, placing honest landlords at a disadvantage.

States report the problem has intensified in recent years, underscoring the urgency of federal action.

The attorneys general also identify actions being taken by the states to curb unfair or deceptive rental fee practices, including legislation that caps certain fees and mandates up-front disclosures about fees. The letter also lists state enforcement actions that target illegal rental fee conduct by landlords and property managers.

In the letter, the attorneys general recommend that federal rulemaking:

• Require clear disclosure of total housing costs, including mandatory fees, in all advertising and listings;
• Prohibit deceptive or unfair practices related to the amount, purpose, or legality of rental fees; and
• Establish a minimum federal standard to promote transparency and fair competition nationwide.

At the same time, the letter also urges the FTC to adopt rules that preserve the longstanding regulatory authority of states in this space. In the letter, the attorneys general urge the FTC not to displace states' decisions to regulate and address certain aspects of landlord-tenant relationships.

The letter explains that federal rulemaking would help reinforce state enforcement and put large landlords operating in multiple states on notice that this anti-consumer, anti-competitive behavior will no longer be tolerated.

The attorneys general signing onto this comment letter include: New Jersey, Tennessee, Colorado, Pennsylvania, Alaska, Arizona, California, Connecticut, Delaware, District of Columbia, Hawaiʻi, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Virgina, and Wisconsin.

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