In October, the Atlanta City Council unanimously approved legislation that would allow tenants to pay their security deposit in installments, or purchase security deposit insurance, in lieu of an up-front cash payment.

Atlanta is the second city to pass this type of “Renter’s Choice” law, following Cincinnati in January 2020. More could be coming.

Landlords typically require security deposits, usually equal to one- or two-months’ rent, when new tenants sign a lease. The deposit is returned to tenants when they move out, after the landlord confirms there’s been no damage to the property during the tenants’ stay.

But affordable housing advocates say such requirements can price people out of the rental market. Many people do not have the funds to pay an extra month’s security deposit, despite having a job that would readily cover the rent.

Giving tenants more options to pay a security deposit will expand the number of people able to rent, while still protecting property owners, advocates say.

In Atlanta, the Renter’s Choice bill allows tenants to pay a deposit in installments over three months. Alternately, they can purchase security deposit insurance which could cost roughly $5 to $15 per month. Under the insurance option, those funds are not be refunded at the end of a lease.

In Atlanta, landlords with fewer than 10 units are exempt from the law; in Cincinnati, the benchmark is 25 units or less.

States have different rules regarding security deposit limits and holding procedures, and local municipalities can enact their own rules within those boundaries. States reportedly considering Renter’s Choice legislation include Alabama, California, Connecticut, Maryland, New Hampshire, North Carolina, Pennsylvania and Virginia.

New York City council members proposed similar legislation as part of an emergency COVID-19 response plan in a move that would have allowed residents to draw on their security deposit for rent and then either pay it back or opt for insurance.