New legislation to assist Philadelphia renters goes into effect on Tuesday.

The Philadelphia City Council has enacted new legislation aimed at alleviating the financial burdens faced by renters, introducing measures that will become effective starting Tuesday. The newly passed bills will cap rental application fees and allow for the installment payment of security deposits, providing much-needed relief for many residents as they navigate the increasingly expensive rental market.

Councilmember Rue Landau, the legislation’s proponent, emphasized that the primary objective is to address the significant unaffordability challenges that tenants encounter when moving into homes. With rental costs surging significantly, many residents find themselves struggling to keep pace with rising prices as their incomes remain stagnant. This situation is particularly pressing in Philadelphia, where nearly half of its population are renters. According to a January report by the real estate platform Redfin, the Philadelphia region ranks among the least affordable metropolitan areas in the United States for renters when assessed against median income levels.

The FreshStartPHL program, launched by the city earlier this year, aimed to assist renters by funding three months’ worth of rent and moving expenses for eligible candidates. However, the initiative had to suspend new applications due to a lack of sufficient funding to meet demand. The city has indicated a willingness to expand the program’s budget as part of Mayor Cherelle L. Parker’s H.O.M.E. initiative, which seeks to create or preserve 30,000 housing units.

The newly enacted cap on application fees will limit landlords to charging no more than or the actual cost of conducting requisite background or credit checks, whichever is lower. This measure aims to prevent excessive fees that could deter potential tenants from applying to multiple rental opportunities. Additionally, landlords are prohibited from performing credit checks that negatively impact applicants’ credit scores.

Furthermore, the legislation allows landlords to offer payment plans for security deposits exceeding one month’s rent, enabling renters to pay the additional deposit in equal installments over a three-month period. This ordinance will not apply to landlords with one or two rental units, a concession made to accommodate small property owners who may face significant financial constraints.

These legislative changes come at a critical time, as many Philadelphians are grappling with mounting financial pressures and housing affordability issues. By reducing entry costs into rental housing, City Council aims to provide greater access and security for vulnerable populations within the city, including historically marginalized groups who face systemic barriers to securing housing. As these measures take effect, they reflect an ongoing commitment to improving the rental landscape in Philadelphia and addressing the pressing needs of its residents.

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