Skip to comments.Security Deposits Are the Bane of Many Renters. Lawmakers Want to Change That.
Posted on 01/18/2020 4:03:24 PM PST by karpov
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 months 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 ...
A growing number of legislators ...
... that live in their mother’s basement...
We get a lot of young people with limited credit history. I have a policy on this. If history is too short or too low I will allow them in with an extra deposit. Most are happy to accept that bargain. And, at their next place they will have enough history to avoid an extra deposit.
Anyone who thinks a two month deposit is high should try making a 20% down payment on a purchased house.
Rent control is a certain path to shortage of rental apartments. I can posit that from having witnessed rent control first hand.
AT least we aren’t talking about shutting down the fiat currency production, ever increasing debt and constant devaluation of the American Dollar
Liberals don't believe in the Law of Unintended Consequences.
Of course this is going to diminish the supply and availability of rental housing.
“You have to pay a security deposit when you rent a car”
I never have.
Thanks. It was the “all cash” thing I got hung up on.
Its not unusual for some to sell appliances a tear out valuable copper and sell it for scrap, and then disappear- section 8 especially.
“Lawmakers” versus reality.
I see the law of unintended consequences rearing its ugly head again. Just like the $15 an hour minimum wage, this is going to screw the people they claim to be helping. Perhaps the next brilliant idea is going to be to outlaw credit checks on potential renters.
I think a total lack of common sense must be a prerequisite to be an elected official.
Lots of businesses require deposits. Utilities too.
If they don’t strike ALL security deposits- it’s ex post facto IMHO, though probably not legally.
I do know landlords who make ‘other arrangements’. Sometimes it works out, sometimes it don’t.
It is held apart in a separate bank account until the tenant moves out.
At that point it may or may not become income depending on the terms of the lease. If the tenant leaves unpaid utility bills, has trashed the place, has unpaid rent due or has vacated without notice then all or part of the money becomes income at that point.
The interest on the account is income and is accounted for to the IRS.
this is another example of government creating a problem (making it harder to evict people) and then trying to FIX the problem, but in the process only making it worse.
If you remove their ability to collect more security deposits they think are necessary.. They will simply raise the rent to make up the difference!
“Does the ?Left want less rental housing...?”
Yes- less privately funded rental housing anyway. Taxpayer funded housing is what they want.
Tack on fees, starting with a monthly inspection fee of $100 if you don’t get the whole deposit up front or to keep the gov’t from forcing Sec 8’s on you w/o paying for their damage. Everyone else adds “fees” now—lawyers, airlines, banks, utilities, telecoms—why not landlords?
I once moved to another city, to go to school, and didn’t have a job in that city. In looking for apartments, they wanted to see pay stubs and run credit checks. I had to explain I didn’t have a job.
In the end, I found a place to live, but was asked to pay a bigger deposit, plus an additional month’s rent in advance.
Some landlords think the security deposit is an end of lease bonus and nickle and dime the tenant into giving up collecting it.
The article referred to “all cash”. Me, I always paid by check.
Went and checked and found out they had been using regular dish washing detergent in the washer.
Please do not do this.
Had another who complained that their toilet was clogged. Found out they had been flushing their cat's dropping encrusted with clay kitty litter.
Please do not do that either.
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