A coalition of Baltimore City Council members are poised to uphold Mayor Brandon Scott’s first veto, a move that would kill a security deposit alternative bill that the council initially passed on a 12-2 vote.
The number of council members willing to sustain Scott’s veto has slowly grown since the Democratic mayor issued his decision a week ago amid concerns the legislation would enable companies to prey upon tenants.
As of Tuesday, five members — John Bullock, Zeke Cohen, Ryan Dorsey, Odette Ramos and James Torrence — confirmed to The Baltimore Sun that they would vote to sustain Scott’s veto. Councilman Kristerfer Burnett plans to abstain from the vote, as he has in previous votes on the measure.
Those six would be enough to defeat an attempted veto override, which requires two-thirds of the all-Democratic council, or 10 votes. Other council members who initially supported the legislation, including Mark Conway and Isaac “Yitzy” Schleifer, said they were still weighing their options.
The bill in question, sponsored by Council Vice President Sharon Green Middleton and passed in April, would require landlords with 10 or more units who charge a security deposit of more than 60% of a month’s rent to offer prospective tenants one of two alternatives: Pay the deposit in three monthly installments or purchase “rental security insurance.”
The installment option found broad support from the council, but the latter provision drew scrutiny, much of it after the bill’s passage. A coalition of housing and other progressive advocates argued “insurance” is a misleading term for the alternative, which is typically offered via a surety bond.
In such an arrangement, a tenant often pays a nonrefundable premium that is lower than a typical lump-sum security deposit. In exchange, the bond company pays damage claims made by the landlord. Then, the company bills the tenant for the damage costs. As a result, tenants ultimately could be on the hook for more than the amount of a regular security deposit.
“The benefits of an installment plan for security deposits do not outweigh the potential costs of the security deposit insurance provision to already vulnerable residents,” Scott said when he vetoed the legislation.
Bullock, one of the council members who has had a change of heart on the legislation, said he was swayed by a video circulated by opponents purportedly showing officials from surety bond company Rhino discussing its business practices. Officials with Rhino lobbied some council members ahead of the board’s April vote.
A spokesman for Rhino said late Tuesday it was “unfortunate” that the video, which the company called an “an inartful way of describing the win-win nature of security deposit insurance,” has been used to campaign against the bill.
“Rhino’s program has been approved, regulated by the Maryland Insurance Administration and contains numerous consumer protections that in many cases go above and beyond those offered by traditional cash security deposits,” the spokesman said.
Bullock said he was also unhappy with a March committee hearing to discuss the bill, chaired by Middleton. During that meeting, Dorsey was barred from introducing an amendment (he later introduced it before the full council) and Middleton interrupted him repeatedly as he attempted to speak against the legislation. Bullock said he declined to introduce his own amendments during that meeting.
“It seemed as if those were not going to be accepted at that point,” he said. “The process did seem a bit quick. I won’t say unfair, but it did seem like things were moving quickly.”
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Middleton did not respond to a request for comment Tuesday, nor did council members Eric Costello, Antonio Glover, Danielle McCray, Phylicia Porter and Robert Stokes.
The council has until June 8 to override Scott’s veto. Council President Nick Mosby, a vocal supporter of the legislation, has yet to announce whether he plans to schedule such a vote. Mosby spokeswoman Yvonne Wenger said Tuesday that he is “still evaluating all of our options.”
“With the next council meeting two weeks away, everything is still on the table,” Wenger said. “Our residents are struggling with the economic fallout from COVID, and we know security deposits will continue to be a barrier to quality, secure housing. We must take a deliberative and pragmatic approach going forward that honors the five-month legislative process devoted to this important legislation.”
Mosby was critical of the veto, saying he viewed it as “modern-day redlining.” The term refers to a practice of banks and other institutions that outlined in red areas on maps where they wouldn’t issue housing loans to Black people. Mosby said “a small minority of folks” had outsize influence on the mayor’s veto, specifically the groups opposed to the bill.
“I’m not sure I could point to something more symbolic of structural racism,” Mosby said last week. “The city of Baltimore is hypersegregated. How can we ever get past that?”
Scott’s spokesman said this week the coalition of council members in favor of sustaining the veto will hold.
“Despite the altruistic intent of this legislation, the NAACP and Public Justice Center joined the mayor in expressing concerns over the security deposit insurance,” Cal Harris said. “Fortunately, when it comes to good policy and bad policy, impending fate is often determined by its own making. Mayor Scott is confident that council members will heed the call of their better angels in the end.”