In San Francisco, where a typical one-bedroom apartment now rents for $3,600, a prospective tenant may have to put down an extra $7,200 as a security deposit. The burden is similarly large in other high-rent cities, where renters may not have thousands of extra dollars sitting in a bank account. But a handful of startups are now giving tenants alternatives to help them avoid that outlay of cash—and some policymakers are beginning to consider new laws that would require landlords to offer more options.
“Housing is the single largest expense for young people today . . . obviously, rent is high. But something that’s so commonplace that the economic impact has been overlooked is the burden of security deposits,” says Ankur Jain, the cofounder of Rhino, a two-year-old startup that announced a $21 million Series A funding round today.
Working with policymakers including New York City comptroller Scott Stringer, Rhino just created a policy proposal that calls for new security deposit laws. First, it argues, property owners should offer alternatives to traditional security deposits—either installment plans that can be paid over several months, or an affordable option for insurance like the offering from Rhino. (In Rhino’s case, tenants may pay as little as $3 a month as an insurance premium, and if the landlord needs any money to repair damages, Rhino will pay.) The proposal also suggests that renters should have the option to transfer a security deposit from one landlord to the next, avoiding yet another large expense.Read Complete Article