First broker fees, now security deposits? Mayor wants to free certain apartments from such payments

The mayor is expected pitch a plan on Thursday that would give a break to city-financed units

New York /
Feb.February 06, 2020 01:32 PM
Mayor Bill de Blasio (Credit: Getty Images)

Mayor Bill de Blasio (Credit: Getty Images)

Mayor Bill de Blasio is taking a cue from Cincinnati: He wants to give some renters an alternative to paying a hefty security deposit upfront.

During his State of the City address, the mayor is expected to pitch a plan to offer renters of city-financed homes a “choice to pay a security deposit or to sign up for renter security insurance,” according to the mayor’s office. The change would mean some renters — in an estimated 60,000 homes or so — could pay a lower, nonrefundable monthly fee instead of a deposit.

The mayor will also “pursue local and state legislation to expand these alternative options citywide to all of New York’s 2.2 million rental households,” according to a press release from his administration.

Last month, Cincinnati became the first city in the U.S. to require landlords to accept alternatives to traditional security deposits, including rental security insurance. Other states, including Virginia, Alabama and New Hampshire are mulling similar measures, according to the Wall Street Journal. In June, as part of a broader overhaul of the state’s rent law, New York capped security deposits at one month’s rent.

The news comes just one day after The Real Deal reported that renters in New York will no longer have to pay fees for brokers hired by their landlords. The Department of State issued guidance on the state’s rent law, pointing to language in the Housing Stability and Tenant Protection Act of 2019 that barred landlords and their agents from accepting “payment, fee or charge before or at the beginning of the tenancy.”

A few New York-based start-ups, including Obligo, Rhino and Jetty, have built their business models around eliminating security deposits, largely by offering an insurance option.

The Rent Stabilization Association’s Mitch Posilkin said he wasn’t familiar with the mayor’s proposal, but noted that his organization supports alternatives like those provided by Rhino.

“The bottom line is that an owner needs to be protected,” he said.

Write to Kathryn Brenzel at [email protected]


Related Articles

arrow_forward_ios
From left: Rosenberg & Estis’ Zachary Rothken, RuthAnne Visnauskas, and Belkin Burden Goldman's  Sherwin Belkin (Rosenberg & Estis, BBG, LinkedIn, Getty)
Proposed rent regs lack legal basis: lawyers
Proposed rent regs lack legal basis: lawyers
Landlord attack dog Jay Martin tries playing nice
Landlord attack dog Jay Martin tries playing nice
Landlord attack dog Jay Martin tries playing nice
Belkin Burden Goldman's Sherwin Belkin (Belkin Burden Goldman, Illustration by The Real Deal with Getty)
Rent regulation threat sparks red scare among real estate
Rent regulation threat sparks red scare among real estate
Mayor Steven Fulop (Mayor Steven Fulop)
Jersey City needs developers to make its inclusionary housing work
Jersey City needs developers to make its inclusionary housing work
Mayor Bill de Blasio (Getty, iStock)
De Blasio’s post-mayoral home has been a 4-star Brooklyn hotel
De Blasio’s post-mayoral home has been a 4-star Brooklyn hotel
Can the world’s most famous skyline also be the most forward-thinking on climate?
Can the world’s most famous skyline also be the most forward-thinking on climate?
Can the world’s most famous skyline also be the most forward-thinking on climate?
Mayor Eric Adams and Bill de Blasio (Getty)
3 things you missed while cheering de Blasio’s departure
3 things you missed while cheering de Blasio’s departure
Photo via NYCEDC
NYC floats $5B coastline extension in Lower Manhattan climate plan
NYC floats $5B coastline extension in Lower Manhattan climate plan
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...