Lawmakers Hear Arguments Over ‘Regulated Conditional Deposit’ Proposal to Expand Rental Access

Representative Joe Alexander introduced HB1336 as a narrowly targeted effort to help applicants who would otherwise be denied housing by creating a regulated conditional deposit (RCD) — an incremental deposit of up to one month’s rent — and by permitting landlords to refund security deposits to third-party payors when agreed upfront, allowing charities to operate more like revolving funds.

Alexander said the bill creates a narrow exception to New Hampshire’s one-month security-deposit cap only for applicants who would otherwise be denied, and includes statutory safeguards “to ensure reasonableness and avoid outcomes where supplying a RCD would stretch a household’s finances beyond reasonable limits.” He also told the committee the change would legalize refunds to third-party payors when the landlord, tenant and payer agree in writing so organizations can reuse returned funds.

Nick Norman, representing the Apartment Association of New Hampshire and the New Hampshire Rental Property Owners Association, described the bill as the product of extensive negotiation with New Hampshire Legal Assistance and landlord groups. He said the bill limits RCD use to tightly defined situations, includes a standardized form to document terms, and retains penalties for deposit misuse.

But advocates and municipal welfare officials urged caution. Nick Taylor, director of Housing Action New Hampshire, opposed the approach, arguing it risks shifting scarce housing access to renters who can pay an RCD and that assistance providers cannot meet current demand for even one-month deposits. “Only about one in four New Hampshire households have $2,000 in savings,” Taylor said, noting that combined up-front costs could exceed $6,000 for many households.

Todd Marsh, president of the New Hampshire Local Welfare Association and welfare director for Rochester, told the committee municipalities expect increased demand for local welfare assistance if RCDs become common. He urged exemptions for municipal welfare or explicit protections ensuring municipalities would receive refunds of deposits they pay. Bernardet Tero, welfare director for Pittsfield, said his town’s renter share (59.8%) and declining charitable funds make the proposed approach financially risky for local governments.

Jennifer Chisum of the New Hampshire Coalition to End Homelessness said security-deposit assistance programs already run out of funds and that doubling deposit needs could push vulnerable families into homelessness. She cited statewide calls for deposit assistance and described the proposal as likely to worsen demand on an already strained safety net.

Committee members asked for clarification about eligibility criteria, whether landlords might game reference checks to extract fees or rescreening, and why the bill uses a fixed benchmark tied to the federal poverty guideline for a two-person household. Representative Alexander said he circulated an analysis explaining the income benchmark and reiterated that the bill is intended as a narrow, compromise measure and referred detailed legal questions to counsel and stakeholders.

The chair closed the hearing and referred HB1336 to the housing subcommittee for further consideration.

Ending: The debate centered on a policy tradeoff: the measure’s designers said RCDs would create an extra pathway into housing for marginally qualified applicants while safeguards and standardized forms would limit abuse; opponents warned the change could privilege those with some savings, shift costs to municipalities and charities, and increase homelessness risk without increased housing supply. The bill will receive further review by the housing subcommittee.