Cincinnati native and resident Jeneya Lawrence dreams of
living in a house with a garden big enough to fit a trampoline for her two
young children, on a street with neighbors from diverse communities.
The 28-year-old community health worker and single mom is
determined to stay in Cincinnati, near family and friends, despite
gentrification and seeing average rents double over the past decade. When
Lawrence found a rental unit earlier this year with separate bedrooms for her
12-year-old son and 9-year-old daughter, close to good schools and her work,
she couldn’t believe her luck. Then the landlord asked for a $1,300 security
deposit in advance.
“I just did not have that. I asked him if I could split it
over two payments but he said no,” explained Lawrence, who then had to wait
another six months to find a rental in a less-convenient location where she
could afford the deposit.
Lawrence’s story is a familiar one for many lower-income
renters across the U.S., who have found it increasingly difficult to find homes
as the housing crisis tightens its grip on cities across the country.
But Cincinnati is trying to do something to ease the burden.
In April this year, it became the first city in the U.S. to require landlords
to accept alternatives to a security deposit. Cincinnati’s bold move has been
hailed as a way to disrupt a broken system for renters. Other cities and states
are now also offering deposit alternatives to make housing more accessible to
The new program, dubbed “renters’ choice,” came into effect
too late for Lawrence to benefit from it when she was last looking to move. But
she hopes it will make it easier for her and other lower-income renters to find
homes in the future.
The program could also level the playing field for the city’s
homeless population, said Kevin Finn, president and CEO of Strategies To End
“On any given day, we have 200 families that have a first
month’s rent but they still can’t find an apartment,” he said. “Having a more
realistic arrangement for what the deposit looks like will make it much easier
to get those households into an apartment.”
Homelessness in Cincinnati disproportionately affects the
city’s Black community (62% of the homeless population) and people under the
age of 35 (55% of the homeless population). And the number of unhoused people
is expected to increase this year and next due to the effects of COVID-19 on
job losses and evictions.
Even before COVID-19 hit the U.S., millions of low-income
renters were struggling. Nationwide, there should be at least 7 million more
homes for those who earn the least. “For every 10 of the lowest-income renters,
there are fewer than four apartments that are affordable and available to
them,” Diane Yentel, president and CEO at the National Low Income Housing
Coalition, told HuffPost.
The pandemic has exacerbated the situation. More than 40% of
low- and moderate-income households in the U.S. said they had no emergency
savings, while over 12% would not be able to pay for a $400 emergency expense,
according to an April survey published by Brookings.
The Coronavirus Aid, Relief and Economic Security (CARES)
Act, passed in March, added a weekly $600 federal supplement to unemployment
payments and implemented a federal eviction moratorium. But both provisions
expired in July.
More than 1 in 5 renters were behind on payments in July,
and widespread evictions are expected unless states extend moratoriums or
introduce rental assistance. The replacement lost wages benefit ― reliant on
joint funding with states ― offers claimants a maximum $400 a week.
Cincinnati resident Seth Weber lost his job in March when
the restaurant he worked at was shuttered due to COVID-19. He got work at a
bakery — but the bakery burned down in August. He’ll be counting on
unemployment benefits to make his monthly rent of $700. But Cincinnati is
looking at an eviction crisis, and he’s aware that this fate could be just
around the corner for him.
“That’s the worst thing a tenant can face,” said Weber, a
volunteer for Cincinnati Tenants’ Union. “Once you have an eviction on your
record, you’re only going to be able to get into substandard housing.”
Many renters avoid getting an eviction on their records by
downgrading their housing ― perhaps moving from a two-bedroom to a one-bedroom
― but doing so requires having enough money saved to put down a security
deposit. “The new legislation will help them be able to get into less-expensive
housing and avoid getting an eviction on their record,” said Finn.
The new legislation could come in handy if Weber has to move
soon to avoid eviction.
Councilmember P.G. Sittenfeld (D) introduced the legislation
last November after reaching out to local tenants and landlords to address the
city’s need for more affordable homes. He says renters’ choice will give
low-income renters greater access to housing in a city where median household
monthly income is around $2,800, and a two- or three-bedroom apartment can cost
$1,000 or more.
“The ‘north star’ for me throughout the crafting of this
legislation was how can we remove an upfront barrier that is the traditional,
steep, cash security deposit?” he said. “And can we replace it with something
that lets people get into the housing they desire, while also still giving
landlords the protection they need?”
For many people, especially those on limited incomes, it has
long been all but impossible to find the cash for security deposits — often,
one or even two months’ rent — that landlords require upfront but which aren’t
covered by a tenant’s Section 8 housing support voucher.
“When you have such limited income, any extra expense ― such
as security deposits or requirements to pay the first and last month’s rent
upfront ― can be an insurmountable hurdle to finding an apartment you can afford,”
Cincinnati’s renters’ choice legislation applies to all
landlords with 25 units or more and offers three options: an insurance premium,
in which the tenant pays a small monthly, nonrefundable fee instead of an
upfront deposit; an installment plan to spread the deposit equally over six
months (or more if the landlord agrees); or a reduced security deposit, paid
upfront, of no more than half the monthly rent.
Sittenfeld says security deposit insurance could mean a
tenant paying just $5 a month to protect the landlord against damages or rent
default, instead of a $1,000 security deposit. “I don’t pay $100,000 a year in
health insurance premiums anticipating that I’m going to have a catastrophic
heart attack. You pay a little bit each month, then it’s pooled risk.”
The “ongoing economic repercussions” of the pandemic — with
thousands out of work or underemployed — only serve to highlight the need for
renters’ choice legislation in Cincinnati, and across the country, says
Elected officials, nonprofits, and landlord groups are
collaborating to publicize the new rules. “While it is still early on, we’re
optimistic that the legislation will be successful in ensuring renters have the
ability to secure an apartment without a large upfront cash security deposit,”
said Sittenfeld, “and look forward to seeing the legislation expand across the
country to help renters in cities large and small.”
Cincinnati’s legislation is part of a wider movement to
disrupt what is arguably an outdated system, particularly where low-income
housing is scarce.
New legislation in Virginia allows landlords to accept
damage insurance in lieu of a security deposit. In Pennsylvania, a proposed
amendment would require landlords to offer security deposit alternatives such
as installment payments or insurance. (Both laws cap the sum of deposits and
insurance at two months’ rent.) Representatives from several other cities and
states including Alabama and North Carolina have committed to introducing
renters’ choice legislation.
In 2019, New York state passed a law to cap security
deposits to one month’s rent and require deposit return within 14 days. In
March of this year, New York Gov. Andrew Cuomo’s pandemic-related executive
order required landlords to allow certain tenants to use their security
deposits to pay rent that is in arrears or due and to replenish the security
deposit over time or “retain insurance that provides relief for the landlord in
lieu of the monthly security deposit replenishment.”
Some landlords argue that an insurance-based system would
create more problems since they’d have to extract funds from an insurer rather
than having cash in hand to make any repairs necessary at the end of the lease.
Charles Tassell, chief operating officer of the National Real Estate Investors
Association, commented recently: “I’ve got to deal with an insurance claim and
get my attorneys involved. And they’ve got their high-priced attorneys
And others warn that over a year or more, the total paid in
nonrefundable insurance premiums could exceed the upfront security deposit and
that renters may be unaware that such insurance does not cover them against
damages or repairs that exceed the policy’s coverage.
Weber worries that because the policy only applies to
landlords with more than 25 units, it limits choices for tenants.
Finn adds that while tenants are learning of their options
from housing nonprofits, landlords may still be in the dark, so cities and
states need to do more to educate them about their new responsibilities.
Yentel says alternatives to security deposits provide
creative and much-needed additional assistance to get families into homes.
However, she argues that there is an urgent need to tackle the underlying
issues contributing to the housing crisis. Solutions include more sustained,
substantial federal investment in the Section 8 voucher program so all those in
need receive help, and building more housing for low-income people through
programs such as the National Housing Trust Fund.
In Cincinnati, where there is a 40,000-unit housing deficit,
the city is hoping to help low-income renters with several new building
projects. These include the Willkommen and Perseverance developments supported
by the nonprofit Cincinnati Center City Development Corporation, which is
working in partnership with the city to set aside 101 affordable rental units
for those making 50-80% of the Cincinnati area median income.
Lawrence — who is still seeking out a rental that checks all
the boxes — is optimistic that Cincinnati’s recent renters’ choice legislation
will offer renters like her access to homes like these next time they need to
“I’m happy that we can pick where we want to stay but also
have three options on the money side,” she said. “This time, I will look at
places where I have the stores I need, the schools convenient for my children.
As long as property owners are open-minded and not money-hungry, it won’t be