COLORADO SPRINGS- It can be difficult to find an apartment in Colorado Springs. The experts will tell you the market is tight. The latest survey shows there’s only a 5% vacancy rate with roughly 2,000 apartments available.
“Everywhere you turn there are apartment buildings, so you think there is a place for everybody and that’s not the case,” said Colorado Springs resident Holly Swanson.
We first met Swanson after she paid $500 to submit paperwork for an apartment for a homeless man who was staying at the Springs Rescue Mission. The fee was described to her as “earnest money” and was collected up front in order for the homeless individual to be considered a future tenant. This doesn’t include the application fee that would follow. She says this is a prime example of the financial challenges people face to secure an apartment in Colorado Springs, especially those with lower incomes or poor credit.
“Not only are there not enough apartments, low income apartments, low rent apartments, but to acquire those apartment requires money up front that you may or may not have,” said Swanson.
Swanson isn’t homeless. However, she volunteers her time at the Springs Rescue Mission and has helped countless homeless people apply for housing and get off the streets. She claims that some apartment complexes catering to people with low incomes will gladly take the application and fees involved, even if they may not qualify. She says she has witnessed this first hand.
“We’ve already paid that $50,$60,$40 and then we’re told oh sorry didn’t I tell you? You needed to make two times the money in order to live here. Well, there you go. They’ll shake your hand and tell you thanks for coming,” said Swanson.
Until recently, apartments didn’t have to breakdown costs associated with application fees or refund any money.
“It’s the great apartment mystery,” said Swanson. “It’s a business and if you are in it to make money the people are going to come last,” said Swanson.
News 5 Investigates spoke with Laura Nelson. She’s the executive director for the Apartment Association of Southern Colorado.
To help tenants save money in the long run and make smart decisions, Nelson offers this advice:
“A person looking for a rental property should always ask for the rental criteria up front,” she said. “Most people have it listed either on the tour sheet, or the information sheet that they have on each unit.”
According to Swanson, that doesn’t always happen. She claims people are paying money for application fees and never seeing the keys to an apartment because they were not approved in the end. However, in the case News 5 Investigates profiled, Swanson’s application for the homeless man was approved after she paid the earnest money. However, after the homeless individual toured the property, Swanson said he didn’t feel “safe” and wanted to back out of the agreement.
When applying for apartments, it’s important to ask the rental company about your rights when it comes to “backing out” of a unit after you already paid certain fees up front. According to Nelson, the complex Swanson was dealing with only had a “72-hour” period to back out. Swanson contacted the company 6 days after leaving the money.
“The 72 hrs. is fairly typical, some are as low as 48 hours due to the high demand for units,” Nelson said in a follow-up email to News 5. “This is to protect the owner if they take it off the market for you and you don’t decide to rent.”
News 5 Investigates is not revealing the name of the apartment complex because this case is not a criminal matter. In fact, no crime had been committed. The complex was well within its rights to hold the earnest money, per their terms. However, after several phone calls, News 5 Investigates was able to assist Swanson with getting a refund.
Transparency with up front apartment fees:
State lawmakers recently came together and passed House Bill 1106. Gov. Polis signed it into law a few weeks ago, creating a set of rules landlords and rental companies must follow when it comes to charging and refunding application fees. Again, in Swanson’s case, the $500 she paid was “earnest money”—not an application fee.
“The transparency is good. I think with quality landlords the transparency should have always been there, but you weren’t required to give a receipt for the cost of your background checks,” said Nelson.
The passage of HB 1106 came following testimony wanting better transparency and accountability with charging up front fees.
However, Nelson says she has not heard of any cases in southern Colorado where a tenant has complained that a complex knowingly took money for an application they knew wouldn’t be approved beforehand.
Under the new law, application fees now have to be itemized and show tenants that the money is in-fact being spent on background checks.
Nelson says renters should expect background checks in Colorado Springs to be more expensive because they have to be more in-depth.
“Because we have a lot of military they are going to have to run multi-state because you have to charge the same for each resident,” Nelson said.
If you have any further questions about renting an apartment in Colorado Springs, you can ask questions and find information at The Apartment Association of Southern Colorado.
The Apartment Association of Southern Colorado tells News 5 right now there are 9,000 new apartments being proposed for the near future in Colorado Springs, but it can take years before they actually break ground. Realistically, the experts believe in the next year or two as many as 3,000 new apartments will be available to lease. The hope is having more options will start making it more competitive and help to ease the pressure on renters.