Council Passes Plan to Help Renters Pay Security Deposits
Sharon Coolidge, Cincinnati Enquirer | January 15, 2020
In Cincinnati, renters won’t necessarily need a cash security deposit anymore under a new law passed by Cincinnati City Council Wednesday.
Proposed by Councilman P.G. Sittenfeld to help alleviate barriers to renting an apartment, the law says landlords must give renters options other than a traditional cash security deposit.
It takes effect in 90 days.
One of the options: rental insurance, which allows renters to pay a small premium each month, instead of a making one cash security deposit.
When first proposed, landlords were to give everyone the option to choose rental insurance. Rental insurance was first proposed as a mandatory option, but the Greater Cincinnati Northern Kentucky Landlords Association pushed back, setting in motion a series of talks that led to the additional alternatives.
“This legislation is in a very different place, and it is in better place,” Sittenfeld said. “We today are making a big, bold and exciting change. The impact of this legislation is removing a barrier to housing. People want to do the best they can for themselves and their families.”
Mayor John Cranley called the legislation, “one of the most creative and innovative ideas to come through council” that he has seen.
“I am not one to get excited for legislation that comes through council,” Cranley said. “This is one of those exceptions.”
But this is different, he said. It takes billions of dollars that are sitting in escrow and puts it back into people’s pockets.
“This is a meaningful act of social justice,” Cranley said.
Under this legislation, after a renter requests an option besides the standard cash security deposit, the landlord can then pick from three different options to offer the renter.
- Rental security insurance, where tenants can be paying as little as $3 a month. Instead of paying first month’s rent and a security deposit upfront, they pay $5 a month in insurance premiums for the duration of the rental. They don’t get that money back, but the idea is making getting into the rental a possibility.
- An installment plan, where the security deposit is paid over a period of no less than six months.
- Payment of a reduced security deposit, which can be no more than the equivalent of 50% of the first month’s rent.
Landlords who own 25 units or less are exempted from the law.
Council passed the law 6-1. Councilman Jeff Pastor, a Republican, voted no. Vice Mayor Christopher Smitherman and Councilwoman Tamaya Dennard were excused.
The measure comes on the heels on comprehensive legislation put forward by Councilman Greg Landsman aimed at preventing evictions.
That legislation creates a rental registry, creates a tenant information page and caps late fees. It also creates a rental inspection program in Clifton Heights, University Heights and Fairview, East Price Hill and Avondale that targets landlords with long outstanding orders to repair their property.
Reprint provided as a Government Affairs service of the Cincinnati Area Board of REALTORS®.