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NYC housing to create alternative payment options to put cash back

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Moses Kuwema 

The New York City Department of Housing Preservation and Development (HPD) and the New York City Housing Development Corporation (HDC) on Wednesday 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 homes.

"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," said HDC President Eric Enderlin. 

"We look forward to advancing this initiative to make it easier to obtain a safe, secure, and affordable home."

“Policymakers must work with just as much urgency to respond to the economic challenge. The purpose of security deposits is to insure 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.”

"Security deposits are prohibitively expensive for far too many New Yorkers, and I've worked to find solutions that soften their financial blow or eliminate it altogether. I thank HPD for issuing this RFEI as an important step. I look forward to learning more about any potential applicants and ensuring that any products provided to New Yorkers in City-financed homes are affordable, flexible, and straightforward options that make signing a lease in New York City more attainable for all," saidCouncilwoman Carlina Rivera.

“A key way to address housing affordability is tackling the upfront cost of rent, including security deposits. Allowing flexibility and expanding payment choice helps more New Yorkers afford a place to live. I am glad to see progress from the Mayor and HPD on this work,” said Council Member Keith Powers.

"We already know that rent is too high in New York City. The upfront costs for renters moving into a new home are even more expensive. We need to offer solutions to make it easier for renters to move into new homes or their first home without these burdensome upfront costs. 

"Security deposit insurance offers an alternative to paying a security deposit all-at-once that will make it easier for people to move into their new homes. I am proud to sponsor this type of legislation and I remain committed to finding ways to make living in New York City more affordable." said Senator Robert Jackson.

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 it.

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.

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