New bills to assist Philadelphia renters will take effect on Tuesday.

Philadelphia Implements New Rental Legislation to Alleviate Housing Burden

With the holiday season approaching, Philadelphia renters have reason for optimism as two significant pieces of legislation aimed at reducing housing costs for renters take effect. Starting Tuesday, new laws cap rental application fees and allow tenants to pay security deposits in installments, both initiatives designed to ease the financial strain on those seeking housing in a challenging market.

The legislation, introduced by City Councilmember Rue Landau, addresses the pressing affordability crisis that has plagued Philadelphia. Nearly half of the city’s residents rent their homes, and according to a recent report by a leading real estate brokerage, the Philadelphia region ranks as one of the least affordable metropolitan areas in the United States for renters relative to their incomes.

A notable program, FreshStartPHL, was launched earlier this year to provide assistance covering up to three months’ rent and moving costs for eligible tenants. However, the city had to halt new applications due to a lack of sufficient funds to meet the high demand. City officials are currently considering bolstering the program’s budget as part of Mayor Cherelle L. Parker’s H.O.M.E. initiative, which aims to build or preserve 30,000 housing units across the city.

One key aspect of the new legislation is the cap on rental application fees. Effective immediately, landlords in Philadelphia are prohibited from charging more than or the actual cost of conducting background and credit checks, whichever is lower, within a twelve-month period. This legislation also mandates that landlords cannot conduct credit inquiries that impact applicants’ credit scores, and they must provide copies of any checks performed.

For prospective tenants applying to multiple units, landlords with more than one rental property can only charge a single application fee. Prior to this legislation, many renters were facing charges exceeding 0 per application, significantly increasing their financial burden as they sought housing.

The second significant change allows certain landlords to offer payment plans for security deposits exceeding one month’s rent, which aligns with state law permitting deposits of up to two months’ rent. Renters will now have the option to pay any costs beyond the initial deposit in equal installments over a three-month period, providing much-needed flexibility.

While this ordinance does not apply to landlords with one or two units, the new measures are still expected to significantly reduce barriers for many who struggle with the upfront costs associated with renting. Landau emphasized that high security deposit requirements often leave tenants stuck in inadequate living situations, underscoring the ongoing need for comprehensive solutions to the housing crisis.

As the nation continues to grapple with affordability issues, Philadelphia’s recent legislative actions represent a critical step forward in addressing the needs of its residents during this challenging period.