Security Deposit Alternatives Are Helping Renters Access Housing

Housing innovation—like alternative security deposits—can play a critical role in expanding affordability and opportunity for America’s renters. 

America's housing affordability challenges require more new housing—a lot more. However, supply alone won’t do the job. To create real affordability, we also require innovative solutions that help reduce financial barriers, expand opportunity, and improve outcomes for renters.  

Security deposit alternatives are one example of tech innovation in action. Across rental housing, housing providers are increasingly leveraging technology to address some of the most persistent challenges facing residents. From flexible payment options and fraud prevention tools to broadband connectivity, smart building systems, and digital leasing platforms, technology is helping create more efficient communities while improving the resident experience. Security deposit alternatives show how technology can be a force for progress on affordability.  

Despite a recent report from the National Consumer Law Center raising concerns about security deposit alternative products and their impact on renters, we need to stay focused on the goal: making renting better—and more affordable. Consumer advocates play an important role in identifying areas where transparency, disclosures, and consumer protections can be strengthened, and those conversations are valuable. At RETTC, we agree that every housing innovation should be evaluated based on whether it delivers positive outcomes for renters. 

But as policymakers evaluate these products, it is important not to lose sight of the problem they were designed to solve.

The High Cost of “Moving In”

For many households, the largest obstacle to securing housing is not the monthly rent. It is the significant upfront costs required before move-in. 

First month's rent, security deposits, utility setup fees, moving expenses, and other costs can require renters to produce thousands of dollars before receiving the keys to a new home. Even financially secure renters can struggle to accumulate that amount of cash at a single point in time. By way of example, according to the 2024 Renter Preferences Survey, which asked renters how important security deposit alternatives would be in improving their financial health, 34% of respondents said security deposit alternatives would be somewhat important to their financial health, 23% said that security deposit alternatives would be very important to their financial health, and 12% said they would be absolutely essential. Just 31% of renters said that security deposit alternatives would not be very important or not at all important to their financial health. 

Security deposit alternatives emerged as an innovative response to this challenge. By reducing or eliminating the need for large upfront deposits, these products give renters more choice, help them preserve their savings, and gain access to housing opportunities that might otherwise be out of reach.  

Whether discussing security deposit alternatives, flexible rent payment solutions, or broadband connectivity programs, RETTC’s goal is simple: to help reduce barriers to access and improve outcomes for renters.  

From Broadband Deployment to Security Deposits, Innovation Serves Renters Best When It Comes with Transparency

The rental housing industry has demonstrated this principle in other areas as well.

For example, housing providers have increasingly invested in bulk broadband and managed Wi-Fi solutions that allow residents to receive high-quality internet service at lower costs than many could negotiate on their own. By aggregating demand and making connectivity part of the housing experience, these programs help expand access, reduce monthly costs, eliminate installation hurdles and credit checks, and ensure residents have access to an essential service that supports education, employment, healthcare, and daily life. In fact, a recent study released by the Bulk Broadband Alliance revealed that residents of homeowner associations, condos, and apartments save more than 50% on broadband relative to comparable retail plans under bulk billing arrangements.  

These innovations ultimately support a common goal of creating better housing outcomes.

Unfortunately, some want us to believe that consumer choice and consumer protection are opposed to one another. They want us to believe that responsible innovation isn’t possible, or that technology in housing is inherently threatening to consumers. They couldn’t be more wrong.

Of course, renters deserve clear disclosures and transparent information about any financial product they choose. They should understand how a product works, what obligations remain at move-out, how claims are handled, and what rights they have if disputes arise. Those principles should apply broadly across housing-related products and services.

At the same time, policymakers should reject the idea that an entire class of products is inherently suspicious. They examine for themselves how these products work, understand the pros and the cons, and evaluate the evidence before enacting new regulations based on overly broad conclusions. 

Innovation and Protection Are Not Opposing Forces

Not all security deposit alternatives operate the same way. The market includes a variety of models with different structures, regulatory frameworks, benefits, and consumer considerations. Evaluating these products based solely on anecdotal complaints or isolated examples risks overlooking the broader experiences of renters who have successfully used them to access housing while preserving financial flexibility.

There’s nothing wrong with reducing barriers to housing access and giving renters a choice to preserve their savings. That’s a goal we all support, and it’s exactly what many technology-enabled solutions are doing today. Now is not the time to restrict the innovation delivering so many benefits to renters.  

At a time when housing affordability remains one of the nation's most pressing challenges, policymakers should encourage thoughtful innovation that expands consumer choice, reduces barriers to housing access, and improves the resident experience. That means ensuring transparency and protecting consumers while preserving the flexibility and innovation that can help renters succeed.