A coalition representing renters opposed to a City Council bill they say promotes a deceptive alternative for security deposits made a direct appeal to Mayor Brandon Scott to veto it.

Standing outside of City Hall, the speakers said the legislation will trick tenants into purchasing a surety bond product that could trap them into ever-deeper debt to an unaccountable company.

Terrell Askew urged Scott “to do the right thing” and “recognize that he  comes from my same background.”

“It sickens me,” said Askew, an organizer with United Workers, part of the Baltimore Renters United coalition that organized yesterday’s protest rally. “Doing this in the name of renters like myself, my family and my friends – that’s despicable.”

• On Scott’s desk: A bill pitched as helping renters that renters’ advocates denounce (11/15/21)

Detrice Dowridge, of Right to Housing Alliance, had a similar message, calling on the mayor to listen to those opposed to Council Bill 21-0022.

“This will not help tenants. It will only cause more distress for tenants,” said Dowridge.

“I work with tenants who are already forced to live in unsafe conditions without remediation from slumlords. We are sick and tired of these slumlords who get away with everything, while tenants are suffering.”

A crowd of about two dozen people carried signs that said, “Housing, Not Hedge Funds,” and chanted, “Veto Rhino,” referring to the New York company, backed by venture capital fund Kairos, that has been lobbying the measure in Baltimore and similar laws in other cities.

Nick Mosby Initiative

Scott has not said what he will do about the legislation, passed overwhelmingly by the Council on April 5.

If he does not sign or veto the measure by May 17, it goes into law without his signature.

The bill has turned into one of the highest profile battles in the first months of Scott’s administration, featuring dueling op-eds, an unregistered Rhino lobbyist and renters’ advocates accusing the Baltimore Sun of factually mischaracterizing the measure in a supportive editorial.

It has also showcased the political clout of the city’s No. 2 elected official, Nick Mosby. Only two Council members, Zeke Cohen and Ryan Dorsey, voted against the measure even as a chorus of advocates denounced it.

Mosby, who became City Council President in December, has been pushing hard to promote the bill in interviews and on social media, together with the Council’s vice president and bill sponsor, Sharon Green Middleton.

(Mosby and Middleton are listed, along with presumably supportive officials from other U.S. cities, on Rhino’s renterschoice.org website, protest speaker Caitlin Goldblatt pointed out yesterday.)

Under the bill, landlords with 10 or more units who charge a security deposit of more than 60% of a month’s rent would have to include in the lease one of two options in lieu of the required security deposit.

One of those options, the chance to pay off the security deposit in monthly installments, has broad support from the advocacy groups.

The controversy centers on the other option – “rental security insurance,” which is actually not insurance but a surety bond. Critics say landlords will most likely offer tenants only this choice because the private companies will pay them right away for any future claims of damages against the tenants.

Advocates point to horror stories reported to the Better Business Bureau of renters using Rhino who said they were hit with erroneous charges, but were unable to get through to the company to stop them from piling up.

In contrast to a traditional lump-sum security deposit, tenants who purchase a surety bond lose their ability to dispute landlords’ claims in court and typically have to resolve the disputes through arbitration.

Vulnerable Renters

Calling the bill a needed source of relief for city renters in the midst of the Covid pandemic, Mosby has said being able to make payments of as little as $5 per month would help cash-strapped residents get housing. (The payments are typically non-refundable.)

He says he’s found little evidence of problems with the surety bond companies.

If anything, he claims, the renter is more protected with a surety bond because “the onus is now placed on the landlord through the insurance commission, a regulatory body of the state.”

Taking issue with that argument yesterday, Marceline White, of the Maryland Consumer Rights Coalition, said that in disputes that come before the state, “the landlord wins 98% of the time.”

“The City Council President has talked about how there are consumer protections. . . Has he ever said what those protections are?” – Marceline White.

“The City Council President has talked about how there are consumer protections in the Maryland Insurance Administration that will protect tenants,” White said. “Has he ever said what those protections are?”

“No,” the crowd replied.

“Has he ever cited a law?”

“No!”

“Has he said anything about what those protections are, besides there are protections?”

“No!”

“Because they are very slight protections,” White said, concluding the call and response.

Another point she made is that the surety bond companies price their product higher for those who have poor credit ratings, “using algorithms biased against renters of color.”

“That’s not justice,” she said. “That’s not housing rights. That’s not equity.”