Cincinnati First to Introduce Rental Insurance In Lieu Of Deposit — Should Other States Follow Suit?
Cincinnati adopted a landmark housing law to offer alternatives to apartment security deposits for renters. The city became the nation’s first to pass such an amendment to allow residents to purchase security deposit insurances instead of transferring one month’s rent deposit to the house owner.
The new regulation features three options for renters: an installment plan that allows the renter to pay the due amount over the course of half a year; a reduced deposit no more than the equivalent of 50 percent of the first month’s rent; or rental security insurance in which tenants pay an insurer a nonrefundable monthly fee in lieu of a deposit.
A potential disadvantage for renters would be that they would not receive their money back upon leaving the property.
According to councilman P.G. Sittenfeld, who introduced the bill, it will allow locals to move into a new flat while dumping more money into the local economy. Sittenfeld also highlighted that if other states follow suit, it will do good to millions of renters nationwide and save them money.
The secretary for the Cincinnati’s Department of Housing and Urban Development, Ben Carson, said in a press release that the idea about the security deposit insurance policies has the potential to vital in solving financial issues of the renters.
Housing experts also approved the new law, stating that it would remove long-standing financial barriers to housing for many people, but mainly for low-income renters who are already facing trouble finding affordable housing.
Martha Galvez, a researcher at the Urban Institute in Cincinnati, also lauded the amendment, pointing out that deposit and application fees are burdens for low-income families and is often used to exclude people from particular housing.
Cincinnati lawmakers also said that their colleagues in New York City and Burlington, Vermont, have called for advice on how to draft similar legislation. Most of them also required a copy of the bill and asked for suggestions on how to build support from tenants and landlords.
North Carolina state representative Ashton Clemmons welcomed the decision of her Cincinnati colleagues, highlighting that she is also working on a bill to feature security deposit insurance. In her view, many people in North Carolina are also having trouble with rental deposits as their wages have not been increased recently. Still, the housing prices went up several times already.
Virginia lawmaker Mark Keam has also proposed a bill to allow local landlords to accept security deposit insurance. Keam emphasized that the upcoming Amazon headquarters would attract many tech-focused millennials to Arlington, Fairfax, and Alexandria, and those young people would appreciate less expensive ways to secure housing.
What do you think? Should more states nationwide follow Cincinnati’s suit and introduce rental insurance?