Bill to Allow Landlords to Collect Larger Security Deposits Stirs Debate Over N.H. Housing Costs

Jan 26, 2018

A bill that could double the maximum security deposit for most New Hampshire renters drew support from local landlords at its first hearing Wednesday — but also warnings that it would exacerbate New Hampshire’s already severe homelessness problem.

House Bill 1485 would raise the security deposit from one month’s rent to two, meaning a tenant could have to pay up to three months’ rent up front before moving in.

Its prime sponsor, Hillsboro Rep. Keith Ammon, said he’s been on both sides of the landlord-tenant relationship — now, he’s “currently neither” — and was sensitive to concerns from those who said the bill would create barriers to housing for people who need it most.

But Ammon also suggested that allowing landlords to ask for more money up front, as part of a security deposit that could eventually be returned to the tenant, would give them incentive to lower their rates.

“What is happening now in New Hampshire is landlords are asking for one month’s rent, because that’s all they can ask for, but they’re also asking for higher rents in perpetuity and it’s actually causing higher rents for people,” Ammon said. “And that prices people out of the market.”

HB1485 has the support of the Apartment Association of New Hampshire, New Hampshire Property Owners Association and New Hampshire Realtors. Several local landlords, including Bill Stergios of Manchester, also voiced support for the measure at a public hearing on Wednesday.

“Landlords, who are for the most part small business people, have continued to suffer thousands and thousands of dollars in losses,” Stergios said. “This bill will help alleviate those losses, and it will also teach tenants responsibility. The security deposit is their money. If they want it back, they clean the apartment.”

Stergios also dismissed concerns that raising security deposits would make it harder for those experiencing homeless to find housing.

“You see these homeless people, there’s a reason why they’re homeless. A lot of them have terrible rental records, and that’s just a fact of life,” he said. “It’s not my fault. They brought this on themselves.”

But advocates with social service agencies across the state said there are many forces already working against people trying to find stable, affordable housing in New Hampshire — high rents, limited housing stock and a vacancy rate hovering around 1 percent. HB1485, they said, would create yet another barrier for people trying to climb out of homelessness, putting extra strain on local welfare offices and shelters.

Charlene Michaud, a welfare specialist with the Manchester Welfare and the Vice President of the New Hampshire Local Welfare Administrators Association, estimated that HB1485 could add an additional $2,000 to $3,000 to her city’s welfare budget each week. Michaud said she’s never before testified on any bill but felt compelled to do so in this case “because of the devastating effects this bill would have on municipal welfare budgets.”

Representatives from Harbor Homes in Nashua and Southwestern Community Services in Keene also said the bill would place extra pressure their agencies because they distribute funding specifically meant to help people afford security deposits. If the bill passed, they said, that funding wouldn’t stretch as far.

While some supporters of HB1485 argued that it merely provided an option to collect larger security deposits, not a requirement, New Hampshire Legal Assistance Housing Project Director Elliott Berry said it’s unlikely landlords would choose not to take advantage of that option, given the state’s current housing market.

“If they’re charging rents this high and finding tenants to put there, you can bet that many – if not most – will charge the two months’ rent,” Berry said. “Why? Because they can.”

“When you balance the harms and look at what this will do to those who have the hardest time accessing housing,” Berry added, “I think the balance says keep things the way they are.”