Security Deposits Are the Bane of Many Renters. Lawmakers Want to Change That
A growing number of legislators are trying to eliminate a practice that has prevented many lower- and middle-income people from renting an apartment: the steep, all-cash security deposit.
With low-cost housing hard to come by in many states, state and city lawmakers are introducing bills that would give younger renters and others strapped for cash the choice to replace security deposits with insurance policies or installment plans paid overtime. These payments are usually equivalent to one or two months’ rent, which landlords require as a guarantee against damages.
Cincinnati on Wednesday became the first U.S. city to require that landlords accept alternatives to a cash deposit, including payment plans and insurance.
New York state lawmakers recently passed a measure limiting deposits to no more than one month’s rent. A member of the Virginia House of Delegates submitted a bill to give tenants options for how they pay deposits last week. Legislators in Connecticut, Alabama and New Hampshire say they plan to introduce similar bills.
Laws to ease costs associated with security deposits are part of a growing effort by lawmakers in a number of states to address the shortage of affordable housing and rapidly rising rents. Over the past year, California, New York and Oregon have introduced new limits on rent, while others have enhanced protections against evictions.
Average rents rose 36% nationally over the past decade, though rents rose more than twice that amount in hot markets such as Denver and Seattle, according to data provider Yardi Matrix. About a quarter of American renters pay 50% or more of their income in rent, according to listings platform Apartment List.
Many landlords are already pushing back against the security-deposit legislation. They say collecting all-cash security deposits at move-in is necessary to protect their assets
(Excerpt) Read more at wsj.com
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