More than 70% of denied rental applications are due to insufficient financial and rental history.
Let’s make it 0%.
The Renters Assurance Act is a proposal that re-imagines the role that financial and rental history plays in rental applications, providing more security for landlords and more access for renters.
Problem: Renters are being turned away from housing
For thousands of Oregon families, there’s not much difference between an economic crisis and a housing crisis. Even available housing stock is out of reach for many rental applicants with poor credit or a thin rental history --- even if they have stable jobs and adequate income.
In fact, over 70% of all denied rental applications are directly due to insufficient financial history.
Lease assurance protection can change that, allowing these denied applicants an opportunity to access housing while protecting landlords from losses.
“Lack of supply isn’t the only hurdle for low-income renters. Private landlords can legally reject would-be tenants based on their income, bad credit or previous evictions, and in many places they can freeze them out by requiring steep deposits and two months of rent up front.
This makes formal housing, with its yearlong leases, set rates and clear tenancy rights, unavailable to millions.”
Solution: Lease Assurance Protection
Lease assurance is like an insurance product for renters and landlords.
It's the first affordable way to dramatically expand access to quality rental housing for the people who have traditionally found those doors closed.
How it works:
A renter applies for housing where they make at least 2-times the rent.
Based on the renter’s history and how much of a security deposit they want to pay, a monthly lease assurance rate is offered.
If the renter would be denied based on their financial or rental history, they have the option to enter into a lease assurance arrangement to get their application approved. (Renters might still be denied based on criminal history.)
The renter chooses a security deposit and premium amount and moves into the home they love!
If there is an outstanding amount to be paid to the landlord at the end of the tenancy, it is covered by the lease assurance provider (up to a cap of 3 months rent). Similar to car or health insurance, the renter is never liable for any funds paid out to the landlord from the lease assurance provider.
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Examples
Here are several examples of how a Lease Assurance model might help different types of individuals looking for housing:
"Jorge"
Jorge is just starting out on his own. He has a stable job, but not a lot saved up yet and no credit rating or rental history.
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Select an option above
WITH LEASE ASSURANCE:
Accepted!
Jorge’s lease assurance cost is based on his profile and cost of the unit.
With Lease Assurance, he’s able to move in and start building his credit.
Lease Assurance Premium: $36/mo
WITHOUT LEASE ASSURANCE:
Denied
Under current housing laws, Jorge's application would be denied based on insufficient rental/financial history.
"Melissa"
Melissa has a good job and fair credit rating, but has trouble finding a place because several years ago she was on a lease with a roommate who didn’t pay their share of rent on time.
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Select an option above
WITH LEASE ASSURANCE:
Accepted!
With Lease Assurance, Melissa can still get into the apartment she wants, while she looks for better roommates!
Lease Assurance Premium: $39/mo
WITHOUT LEASE ASSURANCE:
Denied
Under current housing laws, Melissa's application would be denied based on insufficient rental/financial history.
"Thomas"
Thomas has an awesome job and a stellar credit rating.
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Select an option above
WITH LEASE ASSURANCE:
Accepted!
Because Thomas is saving up for a down payment on a house, he decides to pay a Lease Assurance premium in lieu of a deposit.
Lease Assurance Premium: $33/mo
WITHOUT LEASE ASSURANCE:
Accepted!
Under current housing laws, his application for an apartment would be accepted, but he’d still have to pay several thousand in deposits.
(This is an example. The list of factors is intentionally partial, as this formula will be determined by each lease assurance provider.)
Have you been in a housing situation where the Renters Assurance Act would have helped you out?
We want to hear from you!
