Big Banks, Big Insurance, Big Pharma & Big Housing: Corporate America Is Burying Us in Fees

Thanks for the poverty

Working for a living is hard. You have to get out of bed early, get dressed… maybe even put wear a silly uniform that you were required to purchase… drop the kids off at school, drive around to find parking or sit on a bench waiting for the bus, rush to work to be on time, and repeat in reverse after work a few hours later. If you are forced to work multiple jobs to make ends meet, the complexity and aggravation of daily life grow exponentially … one grueling day after another.

Decades ago, Wall Street bankers learned that making money off of other people by charging fees for absolutely everything their accountants can think of… and then charging late fees upon those fees… is an fast route to Easy Street. Banks and other lending institutions are masters at making money from fees (as opposed to real work).

The Fee Game is now pervasive across Corporate America. As a result, We the People are getting fleeced at every turn. People complain about high taxes from the government, while Corporate America is slipping billions of dollars out of our pockets in service fees, administrative fees, application fees, late fees, nonpayment fees, stop payment fees, online payment fees, nonrefundable deposits, usurious interest rates,  junk health insurance, unaffordable health insurance premiums, co-pays, coinsurance, and the list goes on. It’s no wonder people are strapped for cash. We’re being nickel and dimed into bankruptcy by Corporate America, while Congress and state Legislatures bend over backwards to be “business friendly.” For more about The Fee Game and how lucrative it is… read on…

The Fee Game

In recent years, we have witnessed millionaire CEOs hop from one corporation to another, vulture capitalists buy up smaller businesses and diversify into related industries, local governments privatize services and offer tax breaks, and bipartisan “business friendly” deregulation flourish. In this climate of privatization, deregulation and vulture capitalism, The Fee Game proliferated rapidly beyond Wall Street. The result has been a flood of corporate fees, tight deadlines, hidden costs, and contractual tricks to extract money from weary Americans. It’s as if big corporations unleashed an army of accountants and data miners to analyze every mortgage, lease, insurance policy, and loan to find every turn where a fee can be charged.

Seeing how successful Wall Street was at The Fee Game, Big Pharma and Big Insurance jumped in years ago. These two industries are notorious for charging high prices, fixing consumer prices to profit margins (not public health), and adding ever-increasing fees, premiums, co-pays, coinsurance, etc. to products and services. The result is that many uninsured or underinsured Americans are forced to choose between living in ill health or going bankrupt from medical bills.

Corporate America’s fee-based get-rich-quick plan works particularly well when they convince consumers that the “convenient” way to pay bills is to give them your checking account number and let them take your money when they want to. (Obviously, this allows for three additional levels of fees… the “insufficient funds” fees from the corporate creditor and from your local bank and “stop payment” fees from the bank if you try to prevent being over drawn.) Sigh. (The system is rigged against us.)

Big Housing

Cadence one bedroom apartment
This one-bedroom apartment at the Cadence rents for $1235 per month. (Rent and floor plans subject to change, according to their website.)

Now Big Housing has entered The Fee Game in a big way– often with tax breaks, lax regulation, and favorable zoning help from local and state governments. The US is in the midst of an affordable housing crisis. Unfortunately, most of the apartments that are being built in Phoenix and Tucson are luxury apartments or student housing. (Details in this post.) Student housing units are rented by the bedroom or bed/bath suite, not by the apartment. Monthly rent in a downtown student housing complex like the Cadence or the District on 5th hovers around $800-900 per month for a bedroom/private bath area in a shared suite with one to five other people; a 500-square-foot one bedroom apartment is approximately $1200 per month.

You can’t drive through the University area or downtown Tucson without noticing the huge new apartment buildings and new apartment construction projects that are dotting the area, where small older homes used to sit. Several years ago, the Feldman Neighborhood was devastated by “Mini-Dorms”, large, new houses with four to seven bedrooms with individual bathrooms, a shared living space, and a shared kitchen. Whole blocks of historic homes were bulldozed by developers to make way for mini-dorm student housing. (Video tour from 2011 here.)

Neighborhood backlash against the mini-dorms forced the Tucson Mayor and Council to create a special district which allowed the construction of larger privatized student housing buildings (AKA Maxi-Dorms) and apartment buildings in the University area. The prevailing thought was that established neighborhoods and historic homes would be saved if fewer– but much larger and taller– student housing structures replaced the mini-dorms and were built on major streets.

Not long after that zoning change, large student housing complexes popped up on 6th Street near 4th Ave. , on Speedway near Park and on Congress Street. The rapid pace of construction of new student housing buildings,  apartment buildings, and luxury hotels in the downtown/University area has accelerated since then– leaving many of us  wondering. Do we really need so many overly expensive tiny apartments and bedroom rentals in a low wage town? Why is the city offering tax breaks to build expensive apartments, when Tucson needs more affordable housing and more low income housing? What is the vacancy rate for student housing and apartments? What is driving this rapid expansion? Is this a false economy created by luring renters from other parts of town– or is Tucson growing that much?

Apartment Life

This four-bedroom suite at the Cadence rents for $779 per bedroom per month. That is more than $3000 + taxes and fees for 1347 square feet of space, half of which is taken up with closets and individual bathrooms. You could rent a house that size with a yard in Midtown for half of that. (Rent and floor plans subject to change, according to their website.)

I know the answer to only one of the above questions: What is driving this rapid expansion? Money. Tax breaks to cut costs and financial risk during construction and the early years. Lucrative resale deals. Millions in high rents and fees.

Corporate apartment complexes and privatized student housing are big business in this country. I have been a homeowner in Tucson since 1984. Except for hearing complaints from my grown children and their friends about black mold, flooding, application fees, lost deposits, and unresponsive absentee landlords, I was out of touch with how much the rental process, rents, and fees had changed with the advent of the Maxi-Dorms and corporate apartment buildings.

My eyes were opened in 2017, when I rented my first corporate apartment in a very large complex on Van Buren in Downtown Phoenix. If you look at this corporation’s national website, you’ll see that they have apartment complexes in 19 cities; in metro Phoenix, they have 11 apartment complexes. My 2020 corporate apartment in Midtown has hundreds of complexes nationwide. Obviously, these are big operations! Both apartments are one-bedroom with covered parking, common area amenities (exercise room, pool, sidewalks) and security gates. The base rent is high, in my opinion, at around $1000–1200 per month + electric and Internet.

Besides the high rent, the fees drive me crazy. Tenants pretty much have to pay their rent using the corporate online payment system– which charges you a fee whenever you pay your rent, even when you pay on time. If you want to pay your rent ahead of time, these corporate apartment complexes don’t show the total amount you owe on their websites before the due date, and the amount you owe may not be the amount that is on your lease– thanks to added fees.

Corporations don’t like late payments, so they pile on the fees if you miss the 2-3 day on-time payment window. Back in 2017, I paid my rent early one month. Since the amount I owed on the first of the month was not displayed on the website, I paid the rent as it was listed on the lease. On the second of the month, I got an email notice stating that my rent was past due and if I didn’t pay the balance by 5 p.m. in the office, I would be charged a late fee. I hung up from my conference call, called the apartment complex office, and explained that I paid my rent early. The apartment manager said that they posted an additional fees to my account on the first of the month (after I had paid the rent) and that unless I paid those fees before 5 p.m. that day, I owed a $50 late fee on top of the additional fees that I had just learned about. Since I didn’t have my checkbook in Phoenix, I logged onto their website to pay the additional fees and the online/on-time fee (which was, at least, less than $50 late fee). That 2017 apartment had an additional ~$200 in monthly fees, besides the late and on-time payment fees and application fee. Yes, I opted into the pet fee to have my cat, Little Uma, with me, but I was also charged for valet recycling, the special valet recycling plastic bags, an “association” fee, a pest control fee, their renters’ insurance, mandatory full Cox Cable package (although I want only Internet), and more.

My current apartment has a similar structure… but worse. Besides the high rent, the $200 nonrefundable deposit or the $400 maybe refundable deposit, the $200 application service fee (which was waived due to a move-in special), $50 application fee, the $50 late fee + $10 per additional day after a 48-hour window to pay your rent, there are these mandatory fees:

  • $5/month “service” fee from Conservice, a corporation that calculates the tenants’ portion of the common amenities (ie, water, sewer, outdoor lighting, etc.); like the rent, this is due on the first and past due after the second, and like the rent it carries with it a separate late fee of $25;
  • $4.95/transaction fee every time a tenant makes an online payment using the landlord’s payment system; with these two fees, everyone pays an extra $9.95 per month when they pay their rent on time with the corporate landlord’s website;
  • $75 fee for each returned check or rejected electronic payment;
  • $25/month valet garbage fee (even though my apartment is about 25 feet from the dumpster);
  • $50 replacement cost for the tall kitchen can the complex provides for the valet garbage;
  • $25 fee per bag or per container if the valet trash container is put out at the wrong time;
  • $40/month “smart apartment” package which allows the tenant to unlock the door with a smart phone (and thus allow data collection on your whereabouts and personal habits); signing the lease gives the “smart apartment amenity provider” the right to collect, store and use the tenant’s personal data, including personally identifiable data;
  • $5/month pest control fee;
  • $2.20/month package deliver fee, which provides a secure box for delivery of my online purchases;
  • $12/month to purchase their renter’s insurance– this fee and the pet fee are the only two I was allowed to opt in or out of.

Obviously, this is a ridiculously long list of fees. Some of these fees, I can control with my behavior– like the late fees and the lost garbage can. The other nonrefundable costs– $82.15 in mandatory fees, plus the $200 nonrefundable deposit and the $250 to apply add up to $532.15. That’s excessive. For example, I don’t want the smart apartment technology tracking me, and I don’t need the valet garbage or the package service; that’s $67.20 per month in fees for amenities I don’t want. And why do I have to pay $9.95 in fees to pay my rent?!

Now you probably think I am a whiner, but let’s do the math on these fees. Multiply $532.15 in mandatory fees and nonrefundable deposits times thousands of tenants nationwide, and you will realize what a money maker fees are. My corporate landlord lists about 400 apartment complexes across the country, including two or three others in Phoenix. If every complex has 500 tenants, that’s 200,000 tenants multiplied by $532.15, which totals $106.4 million just in mandatory monthly fees, one-time fees, and nonrefundable deposits. That doesn’t even include the rent, all of the late fees, the pet fees, and differential pricing for short-term leases!

This complex is billed as being great for Grand Canyon University students. How many college students read the entire lease, including the 30 pages of appendices to find the embedded tricks– like the $25 late fee on the $5 fee or the $25 per bag or can fee for putting your trash out at the wrong time or the $50 replacement fee for the $15 tall kitchen can?  Obviously, this lease is designed to trip up the tenants and pile on charges.

Truth in Renting

It wouldn’t be so bad if corporate landlords were upfront about the fees and if tenants could opt out of the “amenities” that they don’t want or need, but that is not the case.

Arizona needs a truth in renting law. Landlords should be required to list the rent and all fees on their websites. When I checked a few large apartment complex websites in Phoenix and in Tucson,  there was no mention of any fees. On one website, it was really difficult to figure out the rent and square footage without starting an application. (Applications can cost hundreds of dollars, so limiting the number of applications you make is a wise strategy.)

I have heard many complaints from constituents about not getting their deposits back, regardless of how clean the place was left. I, too, have had this experience in Phoenix. I think landlords should be required to give an itemized list of damages that are being charged against you deposit.


If you want to see Tucson’s gentrification future, visit the Downtown and Midtown areas of Phoenix. This is where Tucson is headed.

The new luxury apartment buildings (or perhaps condos) in the Roosevelt area are very stylish… and look super expensive. Along the tree-lined streets littered with well-dressed joggers and dog-walkers, trendy restaurants and bars are interspersed with the apartment buildings. It’s lovely and convenient to downtown and the Capitol. I would totally live there if I could afford it and didn’t need a parking space.

Just beyond the boundaries of the newly redeveloped areas of Downtown/Midtown Phoenix, there are some real rough patches of high poverty and heart-wrenching homelessness.  On my way to the Capitol each day, I pass through the 15th Ave. and Van Buren intersection. We live in one of the richest, most technologically advanced countries in the world and in a state that touts low unemployment and a robust economy.  Why do we force people… anyone… to live on the streets?

A fellow Legislator told me that homelessness in Downtown and Midtown Phoenix has increased 75% since the rise of the corporate apartment buildings and related gentrification. At the recent Arizona Tax Research Association (ATRA) meeting, one of the speakers said homelessness in Arizona has increased 200% since 2013.

Why is government turning a blind eye toward high-cost corporate apartments, gentrification and the link to housing insecurity?