Comptroller Scott Stringer is calling for a cap on security deposits, proposes installments and insurance plan instead.
New York City Comptroller Scott M. Stringer is calling on the state and the city to create limits for security deposits, which he calls a steep and unnecessary financial barrier, particularly for low-income New Yorkers. According to his new report, NYC renters spent approximately $507 million in security deposits in 2016. NYC is among the most expensive and inaccessible housing markets in the country; Brooklyn, is three times as costly as the national average, ranking third behind Manhattan and San Francisco. Renters in Brooklyn paid $146 million in security deposit.
“Every day, New Yorkers are working harder and saving less – and right now, huge portions of their annual incomes are being held hostage in security deposits,” says Stringer. “These may just be considered the costs of being a renter in New York, but it’s not right and it’s not necessary.”
The report finds, that the average NYC household would pay more than 10 percent of their annual income to afford the first month’s rent and security deposit of a local apartment. For low-income New Yorkers, security deposits can be extraordinarily burdensome, elevating the upfront cost of moving to over 20 percent of a household’s yearly income; in Brownsville and East New York, renters have to pay 22 percent of their annual income. Deposits make a move out of their neighborhood, to choose better housing options next to impossible, states Stringer.
In his analysis, Stringer is recommending that New York State introduces legislation to cap security deposits at one month’s rent for one-year leases, a law already in effect for rent-regulated units. The comptroller proposes to give renters installment options added to the monthly rent or a monthly $10 insurance fee as viable alternatives to deposits.
Stringer also takes aim at bad landlords who are withholding deposits at the end of the lease; he suggests the city creates a tenant protection system where security deposits are held by a third-party custodian and arbiter rather than the landlord.
“To tackle our mounting affordability crisis, we need to think outside the box and put bold ideas into action,” says Stringer. “Our proposals will change the rules of the housing market and put money back in the pockets of thousands of families looking for a bigger apartment in a better school district, to new graduates who have to find a place to live while paying down their student loans.”
For the full report, go here.