Tarrant County is one of the fastest-growing markets in the country. With that growth comes demand, and demand means home prices are rising locally coupled with a 40-year inflation high that seemingly impacts every good or service.
It is time to start rethinking the way we have done things in the past, especially around housing. Traditional processes may no longer be an option if we want families to be able to afford to stay in their home, especially when it comes to renters.
I come at this issue from two distinct perspectives. I represent District 3 on the Fort Worth City Council and I co-own Northern Crain Realty, a real estate brokerage which manages residential and commercial properties.
From my standpoint, it’s going to be some time before prices start falling, and we must consider all options to address this crisis. Just recently, our City Council voted unanimously to allocate an additional $5 million to end chronic homelessness. This allocation is part of a $20.3 million investment by the city, from the American Rescue Plan Act, to build 165 units of permanent supportive housing.
If you go:
What: The Fort Worth Report’s next Candid Conversation is titled “How Do We Keep the American Dream of Home Ownership Alive in Fort Worth?”
When: 7:30 a.m. June 23
Where: Martin Center at Texas Wesleyan University, 1201 Wesleyan St.
Cost: This is a free ticketed event. Tickets will be made available first to subscribers of fortworthreport.org’s newsletter.
Another thing to consider is how we tackle skyrocketing rental prices. According to Redfin, rent increased 21.7% last month to $2,090 in the DFW Metroplex. With that monthly rent comes an increase in rental deposits, a tall barrier for families in need of suitable housing. Nearly everyone is familiar with a traditional cash security deposit, but does it really serve renters and property owners well?
Renters face the challenge of coming up with an amount equal to two or sometimes three months of rent all at once. For a person renting a $1,000 per month apartment with a security deposit of one-month’s rent, that up front cost of $2,000 could be cost prohibitive, even if they can afford the monthly rent. For context, according to the Federal Reserve more than one third of Americans cannot easily afford paying for an unexpected $400 expense in cash.
For someone just starting a new job in a city like Fort Worth, students coming out of high school or college graduates looking to move out of their parent’s house for the first time, or growing families who need more space, a $2,000 cash payment up front could be impossible in today’s environment.
Security deposits are not always great for property owners or their managers. We have a fiduciary responsibility for those security deposits and must hold them safely in treasury, managing those accounts for each of our tenants and property owners.
There are alternatives to cash security deposits. Companies like Rhino offer a security deposit insurance policy that renters take out and pay monthly. For an apartment that rents for $1,000 per month, their plans cost around $5 per month for the renter. This protects the property owner from the cost of damages or unpaid rent just like a security deposit would, but the renters do not need upfront cash. And property managers like me do not have to hold it in escrow with the increased liability risk and insurance costs.
This is the kind of innovation from the private sector that we need to consider to help solve the challenging issue of rising housing costs in Texas. Strong communities attract the businesses and workers that will power Fort Worth and the rest of Texas, but part of that attraction has always been housing that those workers can afford. Simple changes like rethinking security deposits can help make housing a little more affordable and keep our communities thriving.
Michael Crain is the district 3 representative on the Fort Worth City Council. He also is a broker/partner at Northern Crain Realty. Contact his office at 817-392-8803.