Many markets have adapted to using alternative security deposits, NAA tells Bloomberg.
Bloomberg’s Oshrat Carmiel recently profiled Rhino, a company that allows renters to pay as little as $2 a month for an insurance policy that can be used in lieu of a security deposit.
Starwood Capital Group, UDR Inc. and Moinian Group are among the apartment owners that have signed up to use the insurance, according to Carmiel. Nationwide, about 300,000 tenants are currently using a Rhino policy instead of a deposit.
“Many markets have adapted to using alternative security deposits,” said Amy Groff, senior vice president of industry operations at the National Apartment Association told Carmiel. “This is a way to attract more prospective residents and makes it easier for them to move in, less money required.”
The Moinian Group, which is also an investor in the insurance product, offers the insurance at all of its 3,000 apartments in New York City.
“These days, land prices, construction prices, rent regulations, taxes -- all these things are so high that rent can’t really be drawn down to attract renters or make them more happy,” Mitchell Moinian, senior vice president at the firm told Carmiel. “It doesn’t happen. So, we have to work with all other kinds of new applications.”