San Francisco Chronicle - (Sunday)
High deposits hinder renters
The house was beautiful. An old Victorian in West Oakland, it had high ceilings, abundant light and lots of charm. Citrus trees sagged under the weight of their bounty in the huge backyard, and a hot tub steamed in a corner. The rent was within our budget, and my partner and I excitedly weighed the pros and cons of the house’s layout, the neighborhood and the proximity to public transit.
That is until we saw the security deposit.
The landlord wanted $6,000, nearly double the monthly rent. All told, move-in costs would total nearly $10,000. We didn’t have that much saved up. So, we let the house go.
This security deposit conundrum rose time and again. As our hunt for a home continued, we began to worry less about what we could afford each month and more about what we could pay upfront. It made me wonder: If two people earning reliable, full-time salaries couldn’t afford these sky-high security deposits, what does that mean for those who are less economically resourced? And how are large security deposits impacting existing residents of the historically low-income neighborhoods where we were looking — primarily in parts of East and West Oakland?
As rent costs have exploded across the state, allowing landlords to charge a $6,000 security deposit for a $3,000 place reflects greed, not practicality. The cost of repairs hasn’t risen at the same exorbitant rate as rent, nor, presumably, has the likelihood of damages. The result can be devastating; for those experiencing homelessness or trying to escape from domestic violence, high security deposits could keep them stuck in unsafe situations.
As a renter, there is also the niggling fear that security deposits won’t be returned upon moving out. I’ve heard stories from friends of their landlords withholding thousands for any number of ridiculous things — dusty baseboards or a floor that was scratched before they moved in. For those who are undocumented, don’t speak English as a first language or are too busy to fight back, the
drawn-out process of trying to recoup losses through small claims court is often out of the question.
Enter AB12. In December, mere days before I began my house hunt, Assembly Member Matt Haney, D-San Francisco, introduced legislation that would limit security deposits to no more than one month’s rent. This reforms a decades-old state threshold that permits landlords to charge tenants security deposits that amount to two months’ rent.
The idea for AB12, Haney told me, came when he met a janitor living in a one-bedroom apartment with his wife and two kids. Haney said the janitor had the salary to move somewhere bigger but lacked the savings for a large deposit.
“It’s not enough to make a certain amount of money, you have to have accumulated wealth,” Haney said of modernday security deposits. “Very few people have $5,000 sitting in the
bank, let alone $10,000 that they can hand over and not need in the short term.”
Haney’s proposed solution has precedent. A dozen states have adopted similar policies, including Alabama, Delaware, Massachusetts and New Mexico, to name a few. But in California, it could be a tough bill to pass. While tenants have some of the strongest protections in the country, property owners still wield significant influence in Sacramento.
To be fair, some of the concerns about the bill’s impact are valid. For small-property landlords in particular, who rely on a rental unit or two to pay their bills, the risk of damages is stressful and could derail valuable income. Subsequently, the California Apartment Association opposes the bill.
“When tenants don’t fulfill their obligations, even the current caps on security deposits don’t cover the owner’s costs,” said Debra Carlton, the association’s
executive vice president of government affairs and compliance. “It can take months to move a tenant out who is not paying or who is creating problems for other tenants at the property. Today, California law limits what a property owner can see when reviewing a tenant’s credit history or background, making it harder to know if a new tenant can fulfill their obligations. A security deposit provides some level of assurance when it comes to new tenants.”
There will always be examples of horrific situations, where tenants destroy an apartment and a landlord can’t afford to fix it. We’re sure to hear those in the coming months as the bill progresses. But nothing in the bill’s language alters the ability of landlords to recoup costs in such a situation; if a tenant destroys an apartment, they are still liable for every single dollar, even beyond their security deposit.
My partner and I did eventually find a place we love, with a security deposit equal to one month’s rent. We didn’t have to negotiate it down: It was transparent in the listing, and we signed the lease this week. But not everyone is so lucky. Our upfront move-in costs are still $6,600, and I have yet to recoup my hefty security deposit from the place I am leaving. While we are privileged enough to afford this, there have been many times in my life when it would have been impossible.
California’s housing crisis demands multiple fixes. We need more housing — particularly more affordable housing. But while we wait for that to be built, limiting exorbitant security deposits is one way to assist millions of Californians trying to find a home.