When Rhino pioneered a replacement for security deposits in 2016, we created a solution for property owners that fundamentally changed housing accessibility for renters by eliminating security deposits. Since then, policies that replace the traditional security deposit model like “Renter’s Choice” have been introduced and passed in multiple cities across the country, including large metro areas like Atlanta and Cincinnati, with overwhelming support.
This year, we were excited to learn that Baltimore’s City Council, recognizing the housing affordability crisis in their city, championed their own “Renter’s Choice” policies to help upend a long-standing barrier that kept many residents out of safe, secure housing: the traditional cash security deposit. Rhino has already successfully helped hundreds of renters in Baltimore quickly move into more affordable apartments without the burden of a security deposit. However, with 35% of renters still finding upfront moving costs prohibitive, we knew we could and should do more to help both renters and property managers tackle the ongoing issue of housing accessibility.
In Baltimore alone, $275 million currently sits idly in escrow accounts, untouchable by renters and property owners. Imagine how that money could be spent to help local businesses, provide seed money for entrepreneurs, pay for school books and car payments, or go toward boosting an individual’s personal savings.
It goes without saying that Baltimore needs creative ideas to help solve its housing crisis and “Renter’s Choice” legislation was a convincing option. The Baltimore Sun editorial board endorsed the legislation saying:
“Tenants will have to decide which policy is best for them. But the important thing is, they will have choices under the City Council Legislation. In Maryland, this type of insurance is already being offered to renters. So far there is no clear indication of widespread predatory behavior. But while these policies aren’t new, they are now starting to become more widely used — Atlanta and Cincinnati are also requiring landlords to offer the policies.”
The proposition of a solution that made housing more equitable for Baltimore residents that was being adopted by property owners across the country struck an overwhelming majority of the City Council as a common-sense solution, which is why it passed on a 12-2 vote.
Unfortunately, Mayor Brandon Scott’s veto of a policy that would make housing more affordable and accessible in Baltimore represents a missed opportunity to provide all Baltimore renters with lower-cost choices to the traditional, burdensome cash security deposit. We had the opportunity to create a public-private partnership that provided more options for renters. But due to a coordinated misinformation campaign by a vocal minority, over $275 million worth of security deposit payments will likely remain locked in escrow accounts, denying renters the option to keep more of their money in their pocket and the ability to move into an apartment sooner and more affordably. The legislation would not have required any renter to choose one particular deposit option or another but would have allowed renters the chance to choose what worked best for them, making housing more affordable as a result.
Baltimore City Council President, Nick Mosby, was surprised and disappointed by Mayor Scott’s veto noting, “Our security deposit alternatives bill is about giving Baltimore renters — of all races and income levels — options for quality housing that have been made available in Maryland for decades at the discretion of landlords to the tenants of their choosing.”
With all the benefits that “Renter’s Choice” provides to Baltimoreans, it was especially disappointing to watch a misinformation campaign, perpetuated by a vocal minority, launched against the policy’s sponsors, supporters, and beneficiaries. This misinformation campaign was predicated on willful ignorance of Rhino’s practices and policies and was based around hypotheticals that would not—and could not—come to pass. There are currently hundreds of renters in Baltimore using Rhino policies to more quickly and affordably move into an apartment.
“Renter’s Choice” isn’t just about housing or economic activity—it’s about equity. Just last year, over 20,000 Baltimoreans became unemployed from the economic fallout of the pandemic. Very few likely had enough savings to cover the cost of the average $1,000 cash security deposit in Baltimore. With Rhino, the typical renter would pay about $11/month or $132 for the year, which gives renters the freedom to move into an apartment sooner and without the financial burden of having to cover the cost of a large, upfront cash security deposit. To us, it’s a win-win policy for renters and landlords, and the “best example today of private-sector innovations leading to public-sector solutions” (Washington Post).
The assertions made by these groups were grossly inaccurate and not based on fact. Our security deposit insurance offers greater renter protections than typical security deposits, in many cases. We are regulated by the Maryland Insurance Administration—the same entity that approves and oversees our car insurance, home insurance, health insurance, among other services our families, friends, and neighbors rely on when they are most in need.
In a letter to Mayor Scott, Council President Mosby wrote:
“Among the inaccuracies is the belief that the legislation authorizes surety bonds in Baltimore for the first time, and that the bill was designed to benefit a single company. Neither is true. Security deposit insurance, like travelers insurance and insurance on car rentals, is also known as a surety bond because that is simply the type of agreement it represents in legal terms. This is a product that has been offered in Maryland for some 20 years and the providers are regulated by the Maryland Insurance Administration. Multiple companies provide this insurance, which is offered to renters in Baltimore at landlords’ discretion. In other words, for decades landlords have been able to discriminate against renters, deciding which tenants in which neighborhoods they wish to offer alternatives to traditional security deposits.”
Similar to other forms of insurance, Rhino requires landlords to submit evidence in support of damage claims (e.g., pictures, documents, etc.). The filing of a claim triggers an automatic notification to the renter that a claim on their policy has been filed. Rhino’s claims team then works with renters to ensure they have the opportunity to provide any supporting or contrary documentation regarding the claim.
Unlike traditional renter-landlord transactions, Rhino also monitors the performance of landlords across all of our policies to ensure that landlords are living up to their obligations to Rhino and renters. If we find that a landlord is not engaging in the right behavior, we proactively engage with that landlord to fix the situation and, ultimately, will terminate our relationship with them if we see the behavior continue.
It is also important to note that the “Renter’s Choice” legislation in Baltimore never gave exclusive access to Rhino or Rhino policies. The legislation simply gave all renters the option to choose security deposit insurance or a traditional, cash security deposit.
Alongside the growing movement of cities adopting “Renter’s Choice” policies for their residents, Rhino remains committed to collaborating with civic leaders on permanent, innovative solutions to address housing accessibility and equity.