Maybe you’ve heard of “renter’s choice laws,” but you’re not completely certain what they are or whether they might impact you. That’s understandable––it can be hard to understand the ins and outs of a new piece of legislation. We’ve created a short guide containing some basic facts about renter’s choice laws so that you can understand them without any trouble. After all, who knows when renter’s choice laws could come to your city? Let’s dive in and take a closer look at this legislation.

What Are Renter’s Choice Laws?

When you’re moving into a new place, the landlord typically asks for the first month’s rent and a security deposit. Under the new renter’s choice laws, landlords in certain cities are required to provide alternatives to the traditional security deposit in order to make moving in more affordable. Paying the traditional security deposit is still an option for renters.

In Cincinnati, which pioneered the legislation, the alternative payment methods are as follows. The renter can:

  • Pay the security deposit in smaller installments over no less than six months. 
  • Pay a smaller security deposit, which must be equivalent to less than half of the first month’s rent.
  • Pay security deposit insurance monthly for the duration of their time as a tenant. This small sum can range from $3 to $20.

These Cincinnati laws are only in place for landlords who own more than 25 units.

In Atlanta, another city pioneering this legislation, the options are as follows. The renter can:

  • Pay the security deposit in three smaller installments.
  • Pay the same security deposit insurance mentioned under the Cincinnati legislation.

These Atlanta laws are only in place for landlords who own more than 10 units and who require a security deposit of over 60% of a month’s rent. 

Where Are They in Place?

Right now, renter’s choice laws are only in place in Cincinnati, Ohio and Atlanta, Georgia. Cincinnati pioneered the legislation back in April. Atlanta City Council just voted to pass the legislation on October 5. However, if you’re living in a major American city, it may not be long until this legislation comes to you. Leaders across the country are considering similar measures in states such as California, Pennsylvania, Alabama, Connecticut, Maryland, North Carolina, and Virginia.

Why Are They Necessary?

So what, exactly, are the reasons for renter’s choice laws? As we’ve noted, new tenants often have to pay their landlords the security deposit and first month’s rent before moving in. (Sometimes, they have to pay the last month’s rent, too!) This can amount to thousands of dollars altogether. Having to come up with this sum of money makes moving into a new place impossible for many people, or it places them in dire financial straits. This is true for people who might otherwise be able to afford the rent and be very good tenants, so the security deposit is the only thing standing in their way.

Of course, this financial obstacle has been a problem for a long time. However, during the COVID-19 pandemic, housing in America has become much less stable. Many people are facing evictions and looking for new places to live. Local governments are urgently searching for ways to remedy this housing crisis. Renter’s choice laws are just one attempt by local governments and affordable housing activists to ensure that some of these common obstacles to housing are no longer a problem for renters. 

Whom Do They Impact?

Renter’s choice laws will have the largest impact on lower-income tenants who would otherwise struggle to pay the traditional security deposit before moving in. These laws will also impact larger landlords who own more than the minimum number of housing units in each city, because it is they who will have to offer these alternative paths to payment. This means that smaller landlords will not be as impacted by this legislation. However, making renting more affordable means that the market will expand, and this benefits landlords, too.

Though renter’s choice laws aren’t nationwide yet, they might be soon. It’s important that lawmakers across the country take steps to make renting more affordable, especially in the circumstances of the pandemic, when so many people are running into housing troubles. Cincinnati and Atlanta are taking strides to make sure that they deal with our housing crisis head on, and hopefully many of our nation’s other major cities will follow suit.

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