City sets security deposit changes in motion


The New York City Department of Housing Preservation and
Development (HPD) and the New York City Housing Development Corporation (HDC)
today issued a Request for Expressions of Interest (RFEI) aimed at providing
renters more choices for paying their security deposits.

As the City considers incorporating more security deposit payment
options, the Security Deposit Alternatives RFEI is the first step in
identifying eligible companies that can offer alternatives to traditional,
lump-sum deposits for affordable housing applicants of newly constructed homes. 

The RFEI is the latest in the City’s efforts to make it
easier for New Yorkers to access affordable housing and fulfills Mayor de
Blasio’s State of the City 2020 commitment to put money that used to go to
security deposits back in the pockets of hardworking New Yorkers by creating
options for how renters pay security deposits, starting with City financed

“Many New Yorkers are living paycheck to paycheck making it difficult to afford the high upfront costs that come with moving into a new home. This administration is committed to creating better options for renters who might have trouble paying a security deposit all at once, and we’re looking for the right partners to join us in this important goal,” said HPD Commissioner Louise Carroll.


“I applaud the Mayor for his vision to create a city that
all New Yorkers can afford. This is another major step toward that goal.”

“Security deposits create barriers to mobility for too
many New Yorkers. Providing alternatives to these burdensome requirements is an
important step towards creating a fairer and more equitable city,” added HDC
President Eric Enderlin. “We look forward to advancing this initiative to
make it easier to obtain a safe, secure, and affordable home.”

Security deposit alternatives are financial products that
allow renters to pay a portion of their security deposit value instead of the
full amount at the time of lease-up. A traditional lump-sum security deposit
can present a barrier for low-income and middle-income households. The
requirement can prevent tenants from relocating to new housing when they need

HPD and HDC will determine if the products and services
being offered can meet the needs of the City’s development partners and tenants
and consider select providers for a pre-qualified list that developers may
consider for doing business.

Under the RFEI, providers cannot charge more than one
month’s rent over a renter’s tenancy. They must also allow renters to pay a
small portion of the security deposit upfront or the full amount over time
while insuring owners against property damage claims or unpaid rent, among
other requirements. 

“Policymakers must work with just as much urgency to respond
to the economic challenge.  The purpose
of security deposits is to ensure that apartments are livable, but it is time
to reimagine this so that everyone benefits,” said Council Member Robert E.
Cornegy, Jr.

 “Security deposits
help landlords avoid damage to their properties, which ultimately should help
tenants as well by keeping building maintenance expenses down. For many
renters, security deposits only seem like an arbitrary extra fee. So I am very
encouraged that HPD and HDC are working to find new solutions to keeping
apartments habitable, which will help keep our communities whole.”

To be considered for the initial pre-qualified list,
companies should send their responses in a single PDF to by February 15, 2021. More information about the
RFEI can be found on HPD’s website.  

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