Renters’ choice, landlords’ scam

by Wade Rathke

December 17, 2020

Atlanta   Hitting the doors in various neighborhoods and apartment complexes in Atlanta, while talking to people about the runoff election, has been an education. Everyone knows about the upcoming election; few know about their rights as tenants. People are almost tired of hearing about the election, but interest in the ACORN Tenant Union has been soaring with a first Zoom organizing committee now under our belt, and two complexes now moving to create ATU chapters and more on the burner.

One thing unknown to most tenants in the city involves a brand-new ordinance, popularly referred to as “Renter’s Choice.” No, we’re not talking about fundamental new tenants’ rights or the ability to have your pick of decent affordable housing in metro Atlanta, but we are talking about an interesting approach to handling security deposits to make it easier for low-and-moderate income tenants to get into an apartment. The ordinance requires landlords to offer tenants two new options for how they can pay their security deposit, if they are either unable or unwilling to fork over the whole sum at once. A tenant can either pay the deposit in three installments or they can purchase “rental security insurance” for what some experts estimate could cost as little as $5 per month.

Atlanta is not the first city to adopt such an ordinance. It’s already in place in Cincinnati, Ohio, where they report success. Deposit replacement laws of this kind are reportedly spreading.

Approximately one-third of US states have passed, proposed, or pledged support for deposit replacement laws including California, Delaware, Florida, Michigan, North Carolina, Ohio, Pennsylvania, and Virginia. At the local level, cities including Cincinnati, Columbus, Philadelphia, New York City, and Santa Cruz have also followed suit…

Atlanta Councilman Amir Farokhi who sponsored the ordinance notes that landlords are required to offer these options, but there is currently no enforcement mechanism in the law. He says the council will add that if necessary.

Having been on the doors and talking to tenants, he needs to get ready soon. One tenant in a development managed by a Florida-based company with thousands of units in almost a dozen complexes in greater Atlanta showed us a time-dated letter from the company. They were being given ten days until shortly before Christmas to come up with “personal liability insurance that at a minimum covers $50,000 per occurrence of damage to the landlord’s property” as a condition of their lease. They could either do so PDQ or they would be enrolled by default into a policy controlled by the company that would cost them $13.50 per month and be added to their rental requirement in a predatory pyramiding scheme even as the new ordinance comes into effect. Tenants, already required to pay a hefty security deposit, would now have insurance benefiting the landlord on top of that. The ACORN Tenants Union doesn’t even want to speculate how landlords might pretzel themselves into proving the tenants were liable for their shoddy maintenance and upkeep standards.

Tenants may be getting a choice, but landlords seem committed to a new scam at the same time. We would bet that it won’t be long before the council will have to be looking to put teeth in this ordinance, because landlords are not going to be touting its advantage to their new tenants. They have other ideas in mind!


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