SACRAMENTO, Calif. — A California state billis proposing to cap security deposits in an effort to get more people into housing. The cap would vary depending on what is being rented.
The bill’s author Assemblymember Matt Haney says Assembly Bill 12 will bring relief to over 17 million renters in California.
“Yes, we need to build more housing. Yes, we need to address mental health issues and drug issues on the street. But for somebody who just wants to get an apartment, for their family just wants to get out of their car, if they're living on the street, we shouldn't see these huge burdens,” said Haney.
The bill, if passed in its current state, would limit a deposit to one month’s rent for an unfurnished apartment or three months’ rent for a furnished apartment. An exemption will be made for smaller landlords.
California has some of the highest rents in the country. According to Zillow, a rental manager, the average rent price in Sacramento is around $1,998 dollars, meaning a security deposit could leave renters paying thousands up front.
Assemblymember Haney points to Massachusetts, New York and Delaware who already have security deposit cap laws, saying California is falling behind at a time when rents are rapidly increasing.
"One month is fair for both sides for the security deposit. But to be clear, if more damages than one month are done, the tenant is still fully liable for those damages. This doesn't change anything about liability. What it does change is how much you have to pay up front. The reality is very few Californians have $5,000 or $10,000 sitting in a bank account that they can fork over just to get an apartment or a home that works for them and their families,” said Haney.
Those who oppose the bill say it would make it harder for property owners to cover costs like property damages or unpaid rent.
John Tiner, owner of Tiner Property Management, manages over 1,000 properties and believes the bill is problematic for the tenants it's designed to help.
"I think it will just make [landlords] all the more careful about who they select. So, the income requirements and some of the other things that they can still look at, they're just going raise that higher,” said Tiner. "If we would reduce regulation, make it easier for builders to build — especially affordable entry level housing — that would have a much greater impact. There's just a supply and demand issue this raising prices and causing all this tightening.”
Property manager Berry Roseborough with M&M Property Services & Management says he has seen the high security deposit costs.
“Owners are asking for almost as much as you would you would ask for a down payment of a home. If renters could pay for a home, they would do that,” said Roseborough. “To ask for anywhere from $9,000 to $12,000 to rent a property, it's a little over overboard.”
Roseborough does not support the bill and believes it will cause issues for both sides.
"I believe that owners are going to maybe take a step back from renting their property. It's going to make it hard for owners to recover any fees for damages to the property from tenants. Also for tenants, it's just going to be very hard for them to find rental properties, because some of the owners may scale back,” said Roseborough.
He hopes there's a middle ground solution that will work for everyone.
Assemblymember Haney says as the bill goes to the senate floor next.
