As rents skyrocket, startup companies are touting what they consider to be a helpful solution to hefty security deposits pricing Floridians out of apartments.
Instead of forking over an upfront security deposit, tenants can agree to pay a monthly fee — typically about $25.
But there’s a catch: The money isn’t refundable at the end of the lease like a traditional security deposit, and renters are still on the hook for damage beyond ordinary wear and tear.
State lawmakers are considering legislation that would create regulations for such
agreements that offer security deposit insurance instead of a traditional lump-sum
deposit.
But advocates for Florida tenants have concerns. They say the proposed regulations lack important safeguards to protect renters from predatory practices.
State Sen. Jim Boyd, who is sponsoring the measure, said paying a monthly fee is optional for tenants and landlords. It helps renters who can’t come up with the money for a security deposit and will be clearly explained in rental documents, he said. “It allows people to get into a home they otherwise might not be able to get into,” the Bradenton Republican said.
Ida Eskamani, a lobbyist representing the Florida Housing Justice Alliance, isn’t
convinced such fees will help Florida renters.
The legislation doesn’t cap what renters can be charged or stipulate that landlords
purchase the insurance, instead of just pocketing a monthly nonrefundable fee from
renters, she said.
Instead, the Legislature should focus on combating price gouging or creating a monthly installment plan for security deposits that would be refundable, Eskamani said.
“Tenants that are living paycheck-to-paycheck who are seeing 20% to 30% rent hikes don’t have options,” she said. “A fee that they will never get back that could actually be ultimately larger than their actual deposit is not an equitable way to address the housing crisis in Florida.”
Renters face thousands of dollars of upfront costs in a market that has already reached unheard-of heights. The average apartment in the Orlando metro area is renting for $1,650 a month, according to CoStar, a commercial real estate information company. Landlords can ask for application fees, a security deposit and first and last month’s rent at the beginning of the lease.
State Sen. Audrey Gibson told Boyd during a Judiciary Committee on Tuesday that she
has concerns. The committee advanced the legislation on a 7-2 vote.
“It’s almost like a poor tax in my mind. I know that’s not something you want to do,” the Jacksonville Democrat said.
LeaseLock and Rhino are two leading companies offering alternatives to security deposits. Jon Potter, a company representative of LeaseLock, said the service is helping renters, and tenants can opt out of the monthly fee at any time and pay the deposit. “Move-in costs are the single biggest barrier to housing,” Potter said. “It’s not: ‘Can I afford the rent?’ It’s: ‘Can I afford to move in?’ ”
As rents soar, Democrats want Gov. Ron DeSantis to declare a housing emergency and
impose price-gouging protections to control hikes.
State Rep. Carlos Smith, D-Orlando, has called the situation a crisis that should be at the top of the legislative agenda. “Floridians can’t afford Florida,” he said.