It’s no secret that rent is through the roof in North Texas. Prices are up. Inventory is down. And the renters’ squeeze came just in time for a looming wave of evictions to crash in Dallas-Fort Worth.
Keeping Texans housed isn’t going to be easy, but one good step is helping renters overcome the first obstacle to housing affordability: the price of moving in.
The security deposit, moving truck, and necessary furniture all contribute to a high upfront cost. We know most Americans can’t afford a $500 surprise medical expense, never mind a $2,000 move.
To increase mobility for low-income renters and ease the housing crisis, many cities are embracing “renter’s choice” laws that require landlords to offer an alternative to the traditional security deposit. Offered by a handful of tech companies, security deposit insurance gives renters a low-rate insurance policy of $5 to $10 per month in lieu of a security deposit that can cost thousands of dollars.
The bottom line is, if you cut out the security deposit, you cut out more than a third of the cost of moving. For people who don’t have enough cash to shell out two months of rent upfront, that opens up lots of housing options.
Some landlords in Fort Worth are already accepting security deposit insurance instead of the traditional security deposit, but not all. That’s where policymakers come into the picture.
Cities such as Atlanta and Cincinnati have passed legislation that requires landlords to offer tenants the choice between paying a security deposit or paying a monthly security deposit insurance premium. State and local lawmakers in Texas have yet to take action mandating that the same option be provided to renters here. They should.
With the national COVID-19 eviction moratorium at an end, thousands of local residents are at risk of needing new housing. While a continuation of the moratorium would have the greatest impact in preventing that crisis, reducing the upfront costs of moving is another important tool we have to lower barriers to housing.
Even for those not actively searching for a new home, the option for renters to switch their commitment from a security deposit to insurance could free up much-needed cash. It’s estimated that $45 billion is tied up nationwide in security deposits, averaging $1,400 per renter. In a crunch, that money can provide necessary relief for a working family.
Renters’ choice isn’t going to solve the eviction crisis. And it won’t fix the housing shortage in Fort Worth. But for many families in the area, it could provide the support necessary to find housing that fits the budget.
For working people, the biggest obstacle to housing can often be moving in. By passing renters’ choice legislation, Fort Worth and other Texas cities can help renters who need support to get their foot in the door.
Montana Williams is director of state and local public policy at Chamber of Progress , a new center-left tech industry policy coalition promoting technology’s progressive future.