Cincinnati City HallPhoto: Nick Swartsell
Cincinnati resident and IRS employee Kendra Davis is looking to move to the city's east side so her daughter can have better access to her school as well as parks and museums — but there are some barriers in the way, she says.
Among them is the daunting amount of money she'll need to pay upfront for rent and a security deposit to secure the average apartment there.
"I'm finding that apartments are at a minimum $900," she says. "That's a huge barrier, to have $1,800 come out of my monthly budget."
Security deposits can present a daunting expense to those looking to rent an apartment or home. But Cincinnati City Council today approved an ordinance 7-1 that will require landlords to offer alternatives to a large, lump-sum payment. Councilmember Jeff Pastor was the only no vote.
Councilmember P.G. Sittenfeld announced the legislation in November. After talking with some real estate groups, Sittenfeld settled on a plan that offers three alternatives to traditional security deposits: an insurance policy that costs as little as $3 a month; an installment plan on the security deposit paid over no less than six months; or a cap of 50 percent of monthly rent for a security deposit.
Sittenfeld says the move is the first of its kind in the country.
"The impact of this legislation is removing that barrier to housing," he said today. "People want to do the best they can for themselves and their family, and this is sometimes a mountain that is too steep to climb. It removes a very real upfront barrier to housing. It's also going to collectively put millions of dollars back in peoples' pockets. I'm optimistic that this legislation is going to scale and spread to jurisdictions and cities and states all across the country."
Mayor John Cranley backs the measure, calling it "one of the most innovative and creative ideas to come through city council" he's seen during his tenure.
"This meaningfully reduces income inequality and makes certain inalienable rights more attainable," Cranley said today. "It never occurred to me that literally millions of dollars are just sitting in security deposits, just doing nothing... we can keep some or all of that money in (renters') pockets without harming the landlord, it's a significant, meaningful act of social justice."
Social service groups and housing organizations have applauded the legislation. But not everyone was thrilled by its initial draft, which only included renter's insurance as an alternative to security deposits. The Real Estate Investors Association of Greater Cincinnati says the legislation won't solve underlying problems with housing access but has agreed the new version with multiple alternatives is better and is supportive of it.
"The final version of this bill is a significant improvement over the original proposal," REIAGC President Felicia Bell told council today. "As a result, the organization is able to get on board. But please note that affordable housing is the real issue and no legislation will solve this problem. Removing barriers to developing, building, rehabbing and providing rental housing is the only solution to affordable housing."
One potential downside to the program under the original legislation: Security deposits are refundable, assuming a landlord agrees that no damages have been done to their property by a departing resident. Premiums from the insurance policies are not refundable.
Assuming a premium is $10 a month, it would take multiple years to equal the average security deposit, however.
A spokesperson for Sittenfeld said that the measure is optional and that the small monthly premiums could be preferable to being priced out of housing due to having to pay a large sum upfront.The ordinance stipulates that the insurance must cover the entire term of a rental lease from the day a resident moves in, offer monthly premiums instead of lump-sum payments and that the selected insurer be licensed by the Ohio Department of Insurance. Sittenfeld's office says there are multiple insurers who offer those services and that the premiums can be as little as $3 a month.
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January 16, 2020 at 04:17AM
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Cincinnati City Council Passes Ordinance Requiring Security Deposit Alternatives for Rental Housing - Cincinnati CityBeat
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