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City Council Passes Controversial Bill To Create Security Deposit Alternatives

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Emily Sullivan/WYPR
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Baltimore City Hall. On Monday, city lawmakers passed a bill to create alternatives for security deposits for some residential leases.

The Baltimore City Council passed a controversial housing bill Monday that supporters say bolsters renters’ rights and critics say empowers landlords rather than tenants.

The Security Deposit Alternatives bill, lead-sponsored by Council Vice President Sharon Green Middleton, would create alternatives to lump sum security deposits for some residential leases: a monthly payment plan and “rental security deposit insurance” ⁠— a surety bonds package which some renters’ advocates call a predatory practice.

Despite the name, most surety bonds do not provide renters with any protection from damage claims from landlords, said Marceline White, the executive director of the Maryland Consumer Rights Coalition.

“So you think, Oh, I'm buying insurance for myself, great. I’m protected in case anything goes wrong,’” she said. “But in fact, the tenant still owes money, even after they paid surety bonds, for any damages that would take place. So it's really like they're paying twice.”

Molly Amster of Jews United for Justice and Baltimore Renters United called the bill’s proposed installment plan option a positive step in making housing more affordable, but decried the bill’s other alternative.

“If renters are faced with the option of a traditional security deposit that they can’t afford or this ‘insurance’ product that they can afford, they are highly likely to choose the ‘insurance.’ ” she said. “The trouble is, it’s not insurance and could cost families dearly over time.”

Council members Zeke Cohen and Ryan Dorsey voted against the bill. Councilman Kristerfer Burnett abstained. All three, along with the rest of the council, are Democrats.

At the council’s last meeting, Dorsey said Middleton, who is the chair of the Taxation, Finance, and Economic Development Committee committee, did not allow for extensive debate at the bill’s hearing, which Middleton vehemently denied.

Cohen said that the legislation, despite its “good intent,” opens the door to deceptive and predatory bonds.

“Who will get hurt? The most vulnerable Baltimoreans,” he wrote on Twitter. “Baltimore suffered so catastrophically during the subprime crisis that we successfully sued a major bank. This product has a similar logic. It gets tenants into housing quickly without the need for a security deposit. But just like subprime loans, it may result in financial ruin.”

After the council session, Middleton staunchly defended her bill, which she described as a “forward-thinking” piece of legislation that was seriously mischaracterized.

“This bill is a barrier that we have broken,” she said, noting that the bill had strong support among Black pastors and faith groups that provide assistance to city renters. “Over my years in life, I have experienced so much discrimination. This is one of them… I have experienced not being able to get in certain communities because of a security deposit.”

Middleton pledged to revisit the bill should any problems arise. “When this bill is signed by Mayor Brandon Scott, we're going to do what council members do: monitor. We monitor the bill. And if there are problems, we're going to come back with legislation to correct it.”

The bill hit Mayor Scott's desk shortly after the meeting.

"In accordance with the Charter, the Mayor has three City Council meetings to take action on a piece of legislation," Cal Harris, Scott's communication director, said in a statement. "The Mayor will use this time carefully to review the contents of the bill with his legislative team.”

Councilmembers introduced several new resolutions, including one from Councilman Robert Stokes of North and East Baltimore to urge Mayor Brandon Scott and the city spending board to refuse to refuse to contract with Georgia and businesses based there. His resolution comes after an overhaul of election rules that critics say limit voting access and disproportionately harm voters of color.

“We know what happened in Georgia in this last election,” Stokes said, referring to the state’s blue swing in the presidential and both senators’ races. “And now we see what the governor is doing to African-American and Black voters in Georgia: suppressing the vote.”

Two new resolutions will lead to hearings on housing access; one from Councilwoman Odette Ramos of North Baltimore calls for city agencies and tenants rights organizations to explain their response plans to the pandemic-spurred eviction crisis. Another from Councilwoman Phylicia Porter of South Baltimore calls for the city departments of law, housing and health to make recommendations on the remedy of vacant properties.

WYPR’s Sarah Y. Kim contributed to this report.

This story has been updated with comment from the Scott administration.