Cincinnati City Council to Consider Legislation Requiring Landlords to Offer Security Deposit Alternatives

Council will soon consider an ordinance that would offer an alternative to a large, lump-sum security deposit: insurance with a small monthly premium.

Cincinnati City Hall - Nick Swartsell
Nick Swartsell
Cincinnati City Hall

Affordable housing has been a hot topic in Cincinnati recently — but one under-appreciated barrier to decent rental housing often flies under the radar for policy-makers.

Security deposits can present a daunting expense for those looking to rent an apartment or house. But Cincinnati City Council will soon consider an ordinance that would offer an alternative to a large, lump-sum payment: insurance with a small monthly premium that protects landlords from damages to their property while eliminating the need for hundreds of extra dollars upfront from prospective rental residents.

Council member P.G. Sittenfeld announced the legislation today.

“At a time when so many Americans and so many people right here in our own community have so little savings, this legislation can put meaningful money back in renters’ pockets immediately and make housing more accessible,” Sittenfeld said in a statement. “This innovative approach also unlocks tens of millions of dollars in Cincinnati currently gathering dust in the form of security deposits. I’m excited to introduce this Renter’s Choice ordinance and am proud that Cincinnati is going first. I believe this movement will quickly scale on a national level.”

The ordinance stipulates that such insurance must cover the entire term of a rental lease from the day a resident moves in, offer monthly premiums instead of lump-sum payments and that the selected insurer be licensed by the Ohio Department of Insurance. Sittenfeld's office says there are multiple insurers who offer those services and that the premiums can be as little as $3 a month. 

Mayor John Cranley backs the measure.

“This legislation will make housing more affordable, offer protection to landlords, and put money back into the pockets of hardworking people here in Cincinnati,” he said in a statement today.  “Reducing the amount of upfront cash required by renters would lift a huge burden, be a direct benefit to tenants, and spur our local economy.”

One potential downside to the program: security deposits are refundable, assuming a landlord agrees that no damages have been done to their property by a departing resident. Premiums from the insurance policies are not refundable.

Assuming a premium is $10 a month, it would take multiple years to equal the average security deposit, however.

A spokesperson for Sittenfeld said that the measure is optional and that the small monthly premiums could be preferable to being priced out of housing due to having to pay a large sum upfront. 

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