As Alabama continues recovering from the economic shocks caused by this unprecedented and seemingly endless pandemic, our leaders must work tirelessly to not only rebuild our economy, but to bring everyone up along with it and make sure our economy works for all Alabamians. Over the last two years, COVID-19 has upended our entire way of life, affecting everyone regardless of race, gender, or creed. Yet, due to decades of inequitable policies, Black Alabamians suffered the most with higher unemployment rates, higher COVID mortality rates, and even higher eviction rates. This has to change now, and the first place to start is by dramatically rethinking our approach to housing.
Every day, thousands of Alabama renters fear eviction. Thousands of families face the dire prospect of unemployment. Thousands of children could be put on the streets. This is especially true for our communities of color, which face eviction at a rate nearly double that of their white neighbors. And the disparities don’t just end there. Since the beginning of the pandemic, more than 50% of Black and Brown renters were cost-burdened—meaning more than 30% of their income goes to paying for housing. Black renters fared even worse, spending 50% of their monthly income on average on housing costs. Across Alabama, thousands of folks are facing economic hardship and housing instability, with few ways to overcome these challenges to get access to affordable, safe housing. To combat these seemingly overwhelming adversities, so much needs to be done. One simple area where we can start is by upending the onerous cash security deposit.
Traditionally, the way we rent apartments is simple and well-known: find a place, apply, get approved, then pay exorbitant upfront sums just to move in. The practice of requiring a security deposit prior to moving in essentially doubles the upfront cost of renting. This means that a working family living paycheck-to-paycheck will be priced out of most apartments, even if they can afford the monthly rent. According to a study conducted by the Federal Reserve, 40% of Americans do not have enough money set aside for a $400 emergency expense, all while the average cost of a security deposit in Alabama is over $1,000. The answer is simple: renters need more options when it comes to covering the cost of a security deposit. This will make housing more accessible, meaning that thousands—if not millions—of Alabamians can equitably access safe, secure housing and thrive in this economy. A little over a year ago, Atlanta, GA’s City Council passed a “Renter’s Choice” policy giving all renters the option to pay their security deposit through a lower-cost insurance policy offered by a company like Rhino. These alternatives are already available in Alabama today, and we would urge renters and property owners alike to encourage their use to help address our community’s ongoing economic challenges. Moreover, across the country, there is more than $45 billion in security deposits sitting dormant in escrow accounts. Landlords can’t touch it; renters can’t touch it. This money could be used to pay down debts, invest in our local economy, get access to better healthcare, and more. There is a better way.
In 2022, accessing affordable, safe housing has never been more difficult. In Alabama, affordable housing remains scarce, while the existing units are often plagued by segregation and blight. It is time to challenge the way we rent in Alabama. Instead of being forced to pay typically exorbitant sums upfront, renters should have the choice to take out an affordable insurance policy, costing no more than a few dollars a month. This would allow renters to have more mobility, access to better jobs, and access to better schools for their children, all while having more money to contribute to the economy. Giving all renters the option to access security deposit insurance is one way that more Alabamians can take advantage of all of the opportunities this great state has to offer.
To be frank, this is just common sense: housing security benefits renters, landlords, and businesses across our state. More opportunities means more equity, which means our economy will be stronger. Across America, leaders in government and housing are embracing options like these because they see the benefits that extend far beyond the ability for a family to move from one apartment to another.
To combat the inequities we see across this state and this nation, we must act quickly. While Renter’s Choice is not the end, it is a beginning that we can get started on almost immediately. As members of this community, we must acknowledge the need for change. Renter’s Choice is an example of much-needed change, and it is time we roll our sleeves up and get this done.
Steven L. Reed is the Mayor of Montgomery, Alabama, and Jeremy Gray is the representative for District 83 of the Alabama House of Representatives.
