At a tele-press conference on Tuesday, New York City local elected officials released a rent relief plan that calls on city and state government, in concert with landlords, to allow renters to apply their cash security deposits to their April rents, in light of the millions of residents suddenly furloughed as a result of the coronavirus outbreak and management.
The plan, The Emergency Renter’s Choice Measure, was introduced by Brooklyn Borough President Eric Adams, Manhattan Borough President Gale Brewer, New York City Council Housing and Buildings Chair Robert Cornegy Jr. and Councilmember Keith Powers, and would unlock close to $8 billion in security deposits currently sitting in escrow that neither landlords nor renters can touch.
Also joining the electeds was Ankur Jain, CEO of Kairos, a tech startup that specializes in security deposit insurance. Jain, with Kairos, has been at the forefront of the Renter’s Choice Movement, beginning with the release of a 2019 policy plan.
Jain’s approach already has inspired the adoption of renter’s choice legislation across the country. Most recently, in January, The Cincinnati City Council passed it into law.
“This would be the single largest stimulus– $8 billion– back into people’s pockets today that right now, New Yorkers need more than ever,” said Jain, from his computer during the tele-press conference.
For the majority of New Yorkers, housing is the most significant cost per month and the greatest household expense. With a COVID-19 recession looming in New York, and April rents just days away, renters are seeking urgent relief.
“You think about a generation that’s already playing catch up from student loans… With a 2008 recession, how do we get people the liquidity so they cover this massive liability which takes up 40 percent of people’s income?”
Renters who opt-in to the rent relief program will have 30 days to replace the security deposit but, through this plan, will now be given the option to replace their cash deposit with low-cost insurance for just a few dollars a month – allowing renters to keep some of the money for other things while paying into a security insurance plan.
“So, the call is for the return of the rent security [to] allow those tenants to use the money to stabilize [under] the trauma of coronavirus and buy those items they believe are needed and important at this time,” said BP Adams. “We need that infusion of cash in our banks, in our businesses. It is something that can be used to put energy and put resources back into our city.”
“It’s an uncertain economic time for all of us. I hope we beat coronavirus quickly and get everyone back to their jobs and wages,” said Jain. “But even this national bailout we’ve been talking about won’t solve the issue for millions of New Yorkers asking, ‘How in the world am I going to pay for next month’s rent?'”
Mayor Bill de Blasio has called for similar requirements to unlock cash security deposits via insurance alternatives during his State of the City speech in February.
If the group can secure support from the Mayor and fellow Council members, this plan can be put into effect as soon as the end of this week, in time for April 1 rents. If scaled nationally, the plan would represent up to $45 billion stimulus for Americans.
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