Introducing new ways of paying for a security deposit in Atlanta is a sizable step in the right direction, and this will make it possible for more people to afford stable long-term #housing.
Atlanta City Council passed the Renter's Choice arrangement into law in 2020. It made Atlanta only the second city in the US to take the opportunity to establish low-cost alternatives to cash #SecurityDeposits for tenants, and this is a very wise decision considering the state of the post-pandemic economy creating so much uncertainty and income instability for Americans. The federal government chose not to answer the calls for assistance from renter advocates and industry trade groups such as Renter's Choice movement, the National Multifamily Housing Council and National Apartment Association. At least our City Council is listening though, and that means a lot.
Atlanta Councilmember Amir Farokhi played a significant role in ensuring that the legislation was passed. The “Renter’s Choice” ordinance gives residents the freedom of paying their security deposit in three monthly installments or getting third-party rental security insurance. This insurance is a trusted, proven remedy to ease the burden of upfront costs for tenants who are having trouble affording rent in the first place. It also gives protection to property owners because in ensures that they won't be left hanging with huge damages and unpaid rent.
Renters usually have to pay a security deposit during the signing of their lease. Security deposits often cost the equivalent of one month's rent. The deposits have been a huge barrier for some residents to access stable housing, more so if they live paycheck to paycheck and without the means to pay hundreds (or thousands) on an up-front deposit. According to Bambie Hayes, the NLIHC state partner and executive director of Georgia Advancing Communities Together (Georgia ACT), “As the housing affordability crisis is exacerbated… cities must develop creative ways for low-income households to obtain housing.”
Rental prices are rising in Atlanta, even though people are in very rough economic situations right now. Even for those who can afford the monthly rent, the upfront costs of moving have become more of a challenge. Moving to a new house means that a renter is faced with expenses including paying for background checks, security and utility deposits, non-refundable fees... and all of them are hurdles for people who are just trying to access better housing.
The legislation is not only meant to benefit renters but also property owners. Property owners are given protection to ensure they can pay for any damage their renters cause to one of their properties. Under rental deposit insurance, tenants pay a monthly premium to an outside insurance carrier, and in case of a loss, the landlord will be paid. It's less expensive per month for the renter, although when they move, they do not get the money refunded to them.
Security deposit alternatives are critical because they help make more homes attainable for the average citizen. Now renters have various options put in place to help them, and property owners will be able to reduce the time their properties sit unoccupied. Employing a security deposit alternative also lowers move-in costs and helps people to avoid accumulating massive debt. Since alternative security deposit renters are not required to pay a traditional security deposit upfront, they are able to save the money right from the start. They can make it easier to get an apartment that they know they will be able to afford.
Therefore, it is certainly a move in the right direction for Atlanta to require property owners to consider alternatives to the security deposit. It is a good move for renters and property owners alike.
