It's an insurance premium of sorts. They are statistically much more likely to have a problem, so they adjust they rent to make the deal a positive expected val

It's an insurance premium of sorts. They are statistically much more likely to have a problem, so they adjust they rent to make the deal a positive expected value again. Urine soaking into a subfloor can easily cost more to repair than the security deposit, and recovering damages in court is hard and expensive in its own right (if the person even has money to take). Not to mention, even when there's no apparent damage, a pet apartment can require extra cleaning to get rid of odors and dander. It just makes sense for the landlord to price in a potential headache.