Cincinnati is in the midst of a rental affordability crisis.

The overall median rent in the city has ballooned 13.94 percent year-over-year to $1,284. That cost, along with a cash security deposit that’s equal to one month’s rent, makes finding affordable and safe housing nearly impossible for the average Cincinatian making $34,002 per year.

P.G. Sittenfield

That’s why Cincinnati City Council member P.G. Sittenfield in November proposed a bill that would eliminate upfront cash security deposits in favor of a security-deposit insurance policy.

With the policy, renters would be able to make small, monthly payments of $25 to $50 for the term of their lease. Landlords will have three, state-approved insurance companies to choose from and property damage would be covered by the policy.

“At a time when so many Americans and so many people right here in our own community have so little savings, this legislation can put meaningful money back in renters’ pockets immediately and make housing more accessible,” Sittenfeld told Cincinnati.com.

Although the measure has garnered support from Cincinnati Mayor John Cranley, who said “reducing the amount of upfront cash required by renters would lift a huge burden, be a direct benefit to tenants, and spur our local economy,” fellow council members and property owners are skeptical about the proposal.

According to Forbesrecounting of the first public hearing, property owner Felicia Bell noted that security deposits are like “savings accounts,” and that funds are returned to tenants once the lease ends as long as the property remains in good condition.

Bell said Sittenfield’s plan could possibly remove the incentive to take care of the property, since damages would be covered by insurance. Furthermore, tenants wouldn’t get the premium payments back, Bell concluded.

Another property owner, Bill Shapiro, noted the plan could put tenants’ credit at risk if they fall behind on insurance payments. With a traditional security deposit, Shapiro said there’s no need to bother tenants since the cash for repairs is already there. On the other hand, Shapiro said insurance companies “will chase the tenants” and place their accounts into collections if they don’t pay.

Lastly, council members Chris Selbach and David Mann questioned why the landlord was being insured and not the tenant, and what issues could arise if a claim is denied.

“What happens if there is $1,500 dollars in damage and a claim is denied?” Selbach asked after wondering if property owners could sue the city for “forcing Rhino (an insurance provider) on the tenant and the landlord.”

Other meeting attendees suggested that Cincinnati work with a local credit union to create a loan solution for tenants strapped on cash. They could take out a loan equal to the amount of the deposit and then pay it back over time.

Sittenfield responded to critiques by saying “[this is] the first hearing, not the last hearing,” and that he was open to other plans, “if people have a better idea.”

A second hearing has been scheduled for December 31.

Email Marian McPherson

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