‘California is behind the rest of the country’: A new bill aims to limit security deposits for renters

[ad_1]

A bill going through the California legislature could help low-income Americans struggling with affordable housing by limiting the amount of money renters would have to pay for a security deposit.

The state Assembly passed Bill 12 in May and now sits in the state Senate, where the policy committee will review it. The bill, which was introduced in December, could be signed into law by September if it passes the Senate. The bill would limit security deposits to one month’s rent, but would not change any of the liability on renters for damages, according to its author, Democratic Assemblyman Matt Haney.

“California is behind the rest of the country on this,” Haney told MarketWatch. “People view this as a commonsense, fair solution to reduce the burden of housing costs and provide relief to families.”

Landlords in California can ask for as much as two months’ rent on unfurnished units, according to FindLaw, and three months’ rent for furnished apartments. That sometimes can be as much as a down payment on a home, Haney said. 

A typical one-bedroom apartment in San Francisco rents for about $2,300 per month in May, according to Apartment List. A two-bedroom apartment rents for around $2,500 a month. In Los Angeles, the typical one-bedroom rental cost $1,700 per month; a two-bedroom rental approximately $2,200.

The main opposition has been from landlords, he added.

As the cost of owning a home soars due to high mortgage rates and home prices, many may find themselves renting for longer. That creates an urgency to introduce more protections to help renters, the assemblyman said.

“We have the third-lowest homeownership rate in California,” Haney said. Homeownership rates are the lowest in D.C., where only around 41% of residents own a home, followed by New York, and California, according to the U.S. Census Bureau. 

The median price of a home in San Francisco or in Santa Clara was $1.46 million as of the third quarter of 2022, according to the National Association of Realtors.

“We have to make sure that renters aren’t forced into huge amounts of debt or have such a huge burden on their finances that they can’t provide for other necessities,” he added.

Roughly 5.3 million households are behind on rent, owing around $11.4 billion dollars, according to National Equity Atlas, which is a collaboration between research group Policy Link and USC Equity Research Institutes. Roughly $2.6 billion was owed by around 688,000 California households.

Meanwhile, the state’s pandemic-era programs that protected tenants from evictions and offered protections ended in June last year, which has put pressure on some tenants who are facing the prospect of being evicted, according to Cal Matters.

Out of all the people in the U.S. experiencing homelessness, 30% were in California, according to a report by the Public Policy Institute of California.

Congress, meanwhile, also wants to limit how much renters need to fork out on new leases. That bill, introduced in Congress this week by New Mexico Senator Martin Heinrich and California Congresswoman Barbara Lee, aims to help lower-income renters with their security deposits.

Specifically, the bill will expand federal support and help low-income renters with security deposits.

Security deposits are “one of the biggest barriers low-income renters face when moving into a new apartment, often required on top of two month’s rent,” Sen. Heinrich said in a statement. “This legislation unlocks support to help renters overcome this barrier so their families can settle into a safe place to call home and build a foundation for a better future.”

[ad_2]

Source link