HB 1336 — Regulated Conditional Deposits (House Committee on Housing Public Hearing)
Vice Chair: All right, we'll open up the public hearing on HB 1336 and recognize the prime sponsor, Representative Joe Alexander.
Representative Joe Alexander (Goffstown, prime sponsor): Thank you, Mr. Chair, members of the housing committee. For the record, my name is Representative Joe Alexander. I represent the town of Goffstown.
I filed this bill because I think it's a great idea, and there are a number of people to testify after me that can probably provide more information than I can. I understand this bill needs an amendment of some sort, but I'm going to introduce it and explain what it does, and then I will hopefully answer questions to the best of my ability.
It amends RSA 540-A to not require — to allow a higher refundable security deposit, up to two months' rent, when an applicant does not meet a landlord's disclosed approval criteria, subject to guardrails. It limits the eligibility for a higher deposit in defined circumstances. So it basically allows a landlord discretion in certain situations to rent to a tenant who does not meet standard approval criteria. It allows greater flexibility in that currently under the law, a landlord cannot require more than one month's security deposit. This would open the door to allow lower-income residents to attain housing, or residents with poor credit to attain housing in this situation.
The goal of this bill is to allow for up to a two-month security deposit in these situations. I understand this bill needs to be amended because I do not want it to be the standard practice for landlords to require two months, but I do want them the opportunity to do it in situations where the applicant seems to be a good idea to rent to but just does not meet the standard criteria. I want to have this ability.
And I'm sure Elliot Barry will correct me if I'm wrong, but I think that there is appetite on both sides of the landlord-tenant issue to find a solution to allow lower-income individuals or individuals not meeting standard criteria to attain housing. So I think this is a great idea. It's a bipartisan bill, and I really hope that the committee looks at this with an open mind. Happy to answer questions, but again, there are many people that have plans to testify after.
Representative Gibbs (question to Rep. Alexander): I definitely understand the argument that you've made, and it has a lot of credit to it. I guess my question is — I think we both know that one of the problems that low-income people have in obtaining rental housing is that they often don't have the amount of money available for a one-month security deposit and have to find it elsewhere. How likely is it that a low-income applicant would have a two-month security deposit available, and are there avenues for them to obtain two months rather than the standard one month?
Rep. Alexander: Let me give you an example. I'm looking at line 14, applicant's credit score fails to meet landlord requirements. There are young people that otherwise would qualify for the housing but may not have the credit or may not have good credit history at that point, but maybe they did have money saved for an apartment. So that would be a situation in which the landlord can use that discretion. So I think you're right to an extent where typically a lot of these lower-income people do not have the extra disposable income to allow for this, and this doesn't mean that they have to go pursue this housing opportunity. This is just allowing greater discretion in situations where the landlord's hands are tied because they have not had the opportunity to read this person.
Representative Newell (question to Rep. Alexander): What it specifies in here — the applicant's credit score fails to meet the landlord's requirements and the landlord's minimum FICO score requirement does not exceed 650. That kind of sticks out to me, because I remember when I was getting a mortgage over a decade ago, the minimum credit score that they had me get up to was 630. So I'm saying 650 here for a rental but 630 to get a mortgage. So it just seems like — is there a reason why 650 was the minimum you chose?
Rep. Alexander: I didn't personally draft the bill. I'm open to changing the number on that if that will appease the committee and get us all to yes. So I cannot answer that question.
Representative Paige (question to Rep. Alexander): I am keeping an open mind on this bill. One question I have is sort of about the exercise of that discretion that you're talking about. We're saying that a landlord may require a security deposit of up to two months' rent under these conditions. That "may" to me says that this landlord could come in and offer this as an option to one person and not another, and that to me just seems to create an opening for abuse. So I guess my question to you is why do you want to provide that level of discretion to landlords in choosing when they avail themselves of this option?
Rep. Alexander: I just think it's important to continue to provide them with more options. "May require" — it's not that we're required to rent, but they can use that as an option. That's just a policy disagreement that you and I may have, but I just think — not adding further responsibility on it, like they can utilize this tool if they want to, but is not required to.
Representative Dumont (question to Rep. Alexander): Do you believe that by offering this as a possible pathway, more people who otherwise might be turned away from housing will have the opportunity to find one?
Rep. Alexander: Great question. I, me personally on a policy front, I would be in favor of smaller houses to allow people to purchase their own homes. But this is also a situation in New Hampshire in which finding attainable housing for rentals is also difficult, and I think this is a good opportunity for the committee to signal that we are also supporting the renters in the state and providing them more opportunities to find housing. So while I would love young granite staters — all granite staters — to own a home, I understand that's not necessarily attainable for everybody. But this would provide a pathway for lower-income people to obtain housing. And also keep in mind, I forgot to mention, section 4 allows the person to get that money back — that additional security deposit back — after a certain amount of months of paying rent. So that provides also — so they put the money up front, but as long as they're paying on time, they're allowed the opportunity to get it back.
Representative Paige (follow-up): I think all of these criteria that we're using are speaking — or at least most of them are speaking — to some level of financial distress. I understand and support the goal of trying to create more opportunity. I guess my question is, do you think that while we're creating more opportunity for folks to get into housing, this way of doing it might actually increase the instability of that housing for folks?
Rep. Alexander: I don't follow that logic.

Christopher Freeman (Bill Drafter, Keene housing provider): Good morning. My name is Chris. I'm a housing provider, push the button, where I focus on affordable housing through co-living rentals, which puts me into contact with the types of tenants that this bill is intended to support on a routine basis. I also sit with multiple advocacy groups, including the Monadnock Housing Collaborative. I'm here today representing myself as the drafter of HB 1336, and I respectfully urge the committee to recommend the bill as ought to pass.
I want to start by thanking Chairman Alexander and the other sponsors present for their support and advocacy on this bill, and a special thanks to Representative Alexander Murray for sponsoring from the Democratic side. My objective in drafting this was to produce something moderate and tailored that serves the goals of both parties and the common needs of landlords and tenants.
This bill helps applicants who are facing denial of housing to qualify for a lease by submitting a double deposit. As some safeguards, the landlord must disclose their approval criteria before accepting the application. Those criteria must conform to caps set by the state. The tenant has a right to rescreen to have the requirement removed and the excess deposit credited to rent.
Under current law, New Hampshire caps security deposits at one month's rent for most landlords. However, the very next sentence in the statute expressly authorizes landlords to charge rent quarterly or less frequently. This produces a latent absurdity. In essentially the same breath we seem to say, "three months of rent upfront — an insult to dignity, what do you think this is, Massachusetts?" But if you've got 12 months of rent plus a deposit, "hey kid, welcome home." The cap was intended to limit the upfront cost of rental housing, and transparently, this restriction has not hurt my business. But I see firsthand about once every three weeks how it hurts tenants. Intent and consequence often work opposite shifts, and the truth is that this consumer protection can and frequently does protect the consumer from things like housing of their choice.
A foundational constraint here is that applicant screening is not optional. Screening serves numerous critical consumer protection functions, not least of which is federal fair housing compliance. In the real world, many applicants fall into a gray zone — not catastrophically unqualified, but not within underwriting norms either. This is where we need to be honest about the limits of case-by-case compassion in a regulated environment, because discretionary exceptions court fair housing risk. Any alternate approval pathways need to be structured and consistent so that they can be offered at scale to any applicant in the same situation.
New Hampshire landlords currently have several compensating factors to choose from, including co-signers, rental surety bonds, and prepaid leases. But the problem is not whether alternatives exist. The problem is that our current options all presuppose resources that the applicant may not have. Co-signers depend on social capital. Surety bonds, which are an insurance product, are often non-refundable and punitive to those with low credit. And prepaid rent is essentially a liquidity test. With these options considered, I humbly submit that our current deposit framework produces regressive outcomes in screening.
HB 1336 offers a better middle path: a refundable, interest-bearing security deposit fully regulated under RSA 540-A, used only when the applicant does not meet disclosed criteria, and only where the landlord's criteria fall within evidence-based parameters set by the state. A landlord whose standards are more restrictive may not use the double deposit provision and they remain bound by the one-month cap. This creates an incentive for landlords — if they want to access this risk mitigation tool, they may need to make their criteria more accessible, not less.
The bill also entitles tenants to request rescreening every six months. This is designed to be an off-ramp as circumstances change. People repair credit, increase income, build rental history, and establish trust with their landlord. If they do, the burden is not permanent.
One final point: under current law, most owner-occupying landlords are already fully exempt from deposit caps. What this bill proposes with restrictions already exists on an unregulated basis throughout the state, just for a narrower class of housing providers.
In conclusion, HB 1336 does not compel landlords to change their screening practices. It does not weaken the one-month cap for qualified applicants. It does not remove tenant protections. What it does is extend an existing practice through a regulated, refundable mechanism that is less regressive than the compensating factors we're already using, and is certainly less regressive than outright denial of housing. For those reasons, I respectfully urge the committee to recommend HB 1336 as ought to pass.
Representative Reed (question to Christopher Freeman): Thank you for your testimony and thank you for taking my question. I was asked to be a co-sponsor and ultimately declined because I am kind of worried, as apparently you understand, that we don't have a statewide organization of tenants the way we do of landlords. So while we have landlords showing up out of the leisure of their time to testify for and against bills, we don't have that from tenants — but they probably have to work. They are signing in, and this one I believe was like 140-ish opposed to this bill versus 12. I suspect that they have the same skepticism that I had when I was asked, which is this is the camel's nose under the tent and that eventually we're going to get to another piece of legislation that removes even more of this discretion.
So my question is related to your rationale and related to the document you sent around. My understanding of that document is essentially that minorities suffer worse housing outcomes — or worse rental outcomes — with the same credit score than white people. I guess why should this help it? Because, again, as was previously stated, the discretion is still — if you're saying that essentially landlords have maybe an unconscious bias or perhaps in some cases not unconscious, if this still allows them to provide that discretion, why wouldn't they continue with their unconscious bias on who they provide that discretion to, and isn't that reason for people to be suspicious of this?
Christopher Freeman: That article was not about whether landlords are discriminating based on race with respect to identical credit between different racial groups. You very well might find data on that — unconscious bias is a thing — but what I'm saying, and what the other piece of paper that I think everybody has a copy of, is that different racial groups do distribute differently with respect to credit score. So if we look at an unweighted average of all New Hampshire, the average credit score for all groups is 697. White, 697. Black, 654. Hispanic, 673. Asian, 723. And American Indian, 661. Those are preconditions that we're trying to operate within. And these are some of these people who were not able to be approved because we have standardized criteria in our screening process and we're not able to make case-by-case exceptions for that. So the question isn't whether or not there are people being precluded from housing already — that exists. The question is how do you offer them a structured pathway through that screening process?
Representative Newell (question to Christopher Freeman): Is a landlord required to provide the criteria — the base criteria — before the process even starts? Would a landlord need to have that information be public for anybody who is going to apply right off the bat?
Christopher Freeman: Yes. As drafted, the bill requires the landlord, if they want to take advantage of this exception, to disclose the approval criteria prior to or concurrently with accepting the rental application. I put "concurrently" in there as a matter of looking towards operational efficiency, that if you put it on the application, the person could see it before they submitted the application, and that would be actual notice of what those requirements are.
I believe that the rental application bill — is it 283? — that was passed in 2024 already established a requirement that landlords disclose their criminal background and credit requirements prior to the acceptance of a rental application fee. So some of this is already in law. This bill would expand it so it captures any of the criteria enumerated that could qualify for the acceptance of a double deposit of rent.
I think also the fact that this needs to be disclosed in writing speaks to some of the discrimination concerns that some members of the committee might have, because it completely preempts the possibility that any landlord would maintain different approval criteria for different classes of tenants. Because if they did, they would have put written evidence of the fact that they're discriminating out into the world.
Representative Paige (question to Christopher Freeman): So you're saying that if a landlord requires a security deposit of up to two months' rent for applicants meeting these specific conditions, having disclosed that as part of the application process, they would then be required to uniformly apply that to each tenant that meets those conditions, and they could not selectively say, "well, this one I'm going to charge double, this one who meets these same criteria I'm going to still just do a one-month security deposit." Is that my understanding?
Christopher Freeman: My understanding is that a landlord has an obligation under the federal Fair Housing Act to maintain a consistent — which is my concern.

Nick Taylor (Director, Housing Action New Hampshire): Good morning, Mr. Acting Chairman and members of the committee. I'm Nick Taylor, the director of Housing Action New Hampshire. We do have some concerns about this bill. We do think it's well-intentioned and appreciate the intent of trying to lower risk for housing providers who are looking to rent to folks who may have more unstable income backgrounds or rental histories.
However, our concerns are sort of three parts. One, we have concerns about the overall cost for renters and tenants — the ability to come up with that money in the first place. You're looking at the median two-bedroom apartment in New Hampshire renting at around $2,000. That's a $4,000 upfront cost at a time when more than one in four families lack the ability to pay for a $2,000 emergency cost right now. So coming up with that money at the front end is incredibly challenging.
At best, I feel like this will be challenging for landlords to even find tenants who could come up with that money. At worst, I think you'll create instability by having folks stretch to try to make ends meet, which could lead them into healthcare debt, miss other food costs, miss childcare payments, and struggle to actually make the next month's rent payment because you're stretching beyond what your savings can allow to meet the deposit in the first place.
Finally, we are seeing — I think in sort of true New Hampshire fashion — that there are nonprofits and other partners who are coming together to try to help lower this risk. The Key Connect New Hampshire program, which is an initiative of Granite United Way, which was formerly the Affordable Housing Incentive program, is working with landlords and tenants to try to make this work by reducing barriers, by providing some support for mediation, by providing some deposit assistance at the front end, so that you're making this potentially risky decision less risky by having that partnership.
And so I don't know that we need a state law to be able to lower that risk when we have nonprofit providers who are already working on this. I would just finally add, from talking with them, the current first month deposit is the biggest barrier that they face when tenants are trying to get into housing. They're having to put up some assistance, and once they're in, they're generally very reliable payers. But that first month is really challenging. So if you double that, you're just doubling that challenge when it comes to being able to come up with it. And likely if they're providing rental or down payment assistance, they're going to have to help fewer people, and we're going to lead to more instability there. So happy to work with the committee if there's interest on this. We do think it's really well-intentioned, but those are our concerns with the current proposal.
Representative Reed (question to Nick Taylor): Is it fair to summarize your position that you are skeptical that — because since the initial security deposit is the largest barrier to the exact people this is supposedly helping — that you're skeptical that enough people would be helped on this to breach the up to this point sacrosanct cap on security deposit?
Nick Taylor: Yes, we are skeptical. I mean, I think at best, if a landlord were to put this program in place, I think they would have a hard time finding folks that could come up with the money to begin with. At worst, you would have some of those downstream effects of people stretching to make ends meet that I think would lead to further challenges down the road.
Representative Paige (question to Nick Taylor): In your discussions with Granite United Way, is there anything — any lessons we can take from their experience and any ways that the state can be helping programs like that to scale and multiply as sort of an alternative path to accomplishing the same goal without sort of saying, "let's take a financially distressed rental applicant and charge them double"?
Nick Taylor: I uh, you know — just to be clear, I talked to the former director of the program, not someone currently at Granite United Way about it. But what they are seeing is that it is really working. They had started on the seacoast in Rockingham and Strafford counties and are continuing to take it statewide. So I think just generally supporting that effort and increasing awareness of it, the ability to work together and have landlords who are entering into the partnership as well as the program folks who are making it happen — it is working. It just needs, I think, broader awareness and hopefully broader scale and adoption.
Representative Dumont (question to Nick Taylor): Do you believe that the application that would otherwise be rejected by — let me rephrase this — do you believe that giving the landlord the ability to charge two months' rent on an application that otherwise would be rejected, the better outcome would be for that person just to be rejected in totality?
Nick Taylor: I appreciate the question, and like we said, I think it's really well-intentioned here. I think our concern is that folks won't really be able to come up with the two months anyway. And so while this could be seen as something that is helping lowering barriers, when we're talking with folks who are working with these renters who are seeking out housing, that they won't be able to come up with the money. And if they do, they're stretching so thin that it will create downstream challenges. So in some ways, I feel like it's a little bit of a false choice.

Elliot Barry (Retired NHLA Attorney): As I said last week, my name is Elliot Barry. I'm a retired attorney. I retired after 47 years of representing low-income tenants at New Hampshire Legal Assistance. I speak very reluctantly in opposition to the bill for a few reasons. I really think a lot of effort went into it, and I really appreciate the intention.
My concerns are a few. Number one, as Mr. Taylor emphasized, with an average rent of over $2,000 a month, you're talking about $4,000 plus moving costs upfront. I don't think I ever had a tenant in 47 years who could afford that. At the same time, if you were to read through all 234 written standards for local welfare — each town has its own — I would say 95% of them say that they don't pay security deposits. There used to be a statewide security deposit loan fund program that no longer exists. The Department of Health and Human Services used to pay sometimes under their emergency assistance program. I'm pretty sure they don't do that anymore.
The bottom line is, as much as people are trying like crazy to come up with either private charitable funds or other funds, there's just not nearly enough. And if you were to pass this bill, I think you need to put an appropriation on it so that the people you're intending to benefit can actually benefit.
There's also a section in here that — one of the criteria that would enable a landlord to impose the higher security deposit requirement is that the gross income of the applicant not exceed three times the rent being charged. The last time I checked, there were over 35,000 tenant households in the state who pay over 50% of their income for shelter. The bottom line is, the people who most need this would all be forced to pay, because they don't meet that requirement. And again, there's just not nearly enough money out there to help.
The other problem is that, as has been testified many times by Mr. Norman, the majority of landlords in the state are small-time landlords, and a lot of them aren't going to comply — not because they're bad people, but because the word will go out that you can charge two months' rent for applicants. And they will think — even today, or I should say at least as of the time I retired, on a recurring basis tenants would come in and say they applied for an apartment and somebody charged them two months' rent. I don't think those people were intentionally violating the law, but they just didn't know about it.
There's also the requirement that the landlord who's imposing the higher requirement disclose their criteria in writing. There are already requirements in the law. Just to give you an example, RSA 540-A section 6 requires the landlord to specify in the signed receipt that specifies the place the deposit is held, and notifies the tenant that they have five days to inform the landlord in writing of what's already broken in the apartment. That never gets complied with by small landlords, and actually a lot of big ones as well.
There are a number of other provisions in here that look good on paper but they don't happen in the real world. The author of the bill also testified that this will help and that landlords won't charge it discriminately. And the problem with that is — how does anybody — I'm the average tenant. I go in there and I apply, and the landlord says, "You have to pay too much rent because you don't meet our requirement." How does that tenant know that somebody else in a similar situation was not charged that amount? There's no way they know. And if anyone thinks that there is meaningful enforcement of the Fair Housing Act these days — HUD was the major source of enforcement; they're decimated. Even if the tenant knows about it, it will take over — I'd say over 120 days at best — to have a determination of whether there's probable cause. Most tenants don't know anything about it, and the relief is in no way timely.
The bottom line is, there may be ways to do this, but as written, notwithstanding the best efforts of everybody, it simply won't work, and it will not benefit the people who need it most. I'd be happy to answer any questions.
Representative Reed (question to Elliot Barry): I'm so glad you brought up the disclosing to the tenant where the security deposit is being held and the interest rate and all of that, because working with tenants in my own district, I've seen that violated so many times that it's not even worth bringing up at some points. I've actually been to court to ask the judge to consider that as part of the problem, and judges just ignore it, it seems to me too. So a couple questions on that. Is it your experience, largely defending or representing tenants in these cases, that tenants generally don't come ready built with the knowledge of these laws the way landlords generally have?
Elliot Barry: There's no question about it, especially the details of the security deposit law. You also reminded me of one other massive area of non-compliance and probably the most important under the current law, and that is the requirement that within 30 days a landlord notify the tenant in writing of the reasons that they are withholding the deposit when the tenant moves out — why they're withholding the deposit. That's supposed to happen in every case. And even in non-payment cases where the deposit should just offset rent that allegedly is owed, the tenant in those cases is almost never informed. Again, the big landlords who know the law, who have counsel or talk to Nick, usually know, but there's so many out there that have no clue.
Representative Reed (follow-up): Considering that tenants don't have that ready-built information, they're just looking for a place to live, they don't know the law very frequently because this is a landlord's area of expertise — they do know the law. Is there anything in this bill that I'm not seeing, because I'm not seeing it, that is a penalty to the landlord who knowingly, or maybe even accidentally, charges people two times the amount of security deposit even though they don't fall into the criteria?
Elliot Barry: I was wondering about that myself, but when I read it closely — and kudos to the drafter — it references amendment to 540-A section 6, Roman numeral 1. And the existing law, I think it's in section 7 or 8, says that a violation of RSA 540-A section 6 is a consumer protection violation. So the tenant could sue. But again, that is one rare occasion. The tenants don't know, and the remedy, even if they sued and won, this would happen about a year after they needed the money to get into an apartment. The bottom line here, again, just so I'm clear, I think the way it is written here combined with the actual situation in the marketplace means that a two-month security deposit is going to become more common than a one, and low-income tenants simply cannot afford that.
Representative Reed (further follow-up): So with the provision on lines 17 and 18, where the person that this is supposed to be offered to — their income cannot exceed three times monthly rent — is it not true that that would probably exclude the majority of people who this is seeking to help? People who might for other reasons have a low credit score or no rental history, but they landed a decent job and they can show that they can pay rent — and this ostensibly is to help those very people get into housing, but this would prevent them potentially?
Elliot Barry: A lot of working people who make enough money are frugal enough and make enough money to pay the rent, but they don't meet the basically the requirement that rent can't exceed one-third of your income. And that's why the most important thing really is to look at not the overall credit score, but look at how this tenant was able to comply, notwithstanding low income — to look at their record with prior landlords.
Representative Dumont (question to Elliot Barry): Can landlords today establish criteria for rental applications?
Elliot Barry: Absolutely.
Representative Dumont (follow-up): Of those criteria, is a credit score typical or a credit verification?
Elliot Barry: It's certainly common. Whether it's typical, I couldn't say, but it's very common.
Representative Dumont (further follow-up): Do you believe that those applications, if they don't meet that credit verification, would otherwise be rejected?
Elliot Barry: I mean, yes, absolutely. But again, the problem is the basic problem here is, given the marketplace and given what people can afford, the question is — is a two-month security deposit going to become the typical deposit? And if it is, that's a catastrophe for people of low and moderate income.

Nick Norman (Landlord Advocate): Thank you again for the opportunity to speak. For the record, my name is Nick Norman, advocate for housing providers. We would be in support of the bill with some drafting changes. I'll tell you one easy one towards the end of my testimony.
For a long time, we as the body of housing providers and landlords have suggested that we could help more people that are marginally qualified if there was more security for the housing provider, like a two-month security deposit. So we think the intent of the bill is very good. And now that I know a little bit more, I understand why it was pretty well drafted. When we found this, we realized someone knew their stuff when they drafted this.
A couple of things. First of all, we think it's a win-win for tenants and landlords because you'd have the marginally qualified to have more housing opportunities. It would allow landlords to accept people with some mitigation of their additional risk. Marginally qualified tenants could later remove the requirement of that second security deposit and receive it back. Qualified tenants are not required to pay more than a one-month security deposit. We don't see it would widely be used because, as many people have said, many tenants wouldn't even have the financial means to provide a second month security deposit.
Just to highlight, the way it's written, it says up to a two-month security deposit, so it could be less than two months. But there are times when tenants have money — or they've just come into some money, or they've just gotten a settlement, or they've just gotten some government benefits, and they do have the financial means to make it more palatable for the housing provider to accept them. They go to a housing provider and say, "Look, I've got some money to back me up, and I know this other qualification — either on credit or a past landlord reference, or maybe there's a minor criminal thing that's keeping them from housing. I'd like to compensate and give you extra money so that I can be accepted. You'd be secure and I'd get housing." And right now, the landlord has to say, "Sorry, no, I can't accept you because the law says I cannot accept more than a one-month security deposit."
Landlords would have to be really careful that they're consistent with their application because it would open a door to fair housing claims. So it would have to be done very well, and to have a clear policy that everyone's treated the same with the same criteria would be really smart.
There was a fair amount of talk about the income requirement. We could easily change that. I just would hate to see a loss of opportunities for the marginally qualified. There are some safeguards already built into this. Elliot mentioned one in the 540-A prohibited acts — there's fines. There's also the extreme guardrail of disparate impact discrimination that would cause housing providers to not indiscriminately apply this.
I have a suggestion of a change. If you look at page two line four — I'm sorry, go back. Page one, line 10, it says, "A landlord may require a security deposit." I think that's very troublesome. When you have a landlord requiring a thing, it's going to put them much more at risk of a disparate impact discrimination claim. Rather, we could say, "a tenant may offer and a landlord may accept." Because right now a landlord cannot accept — that's the law. But if we simply changed it to "a tenant may offer and a landlord may accept," that would potentially answer a lot of questions that have been raised.
Now, if we do that, that would necessitate two other changes. Page two line four says, "A landlord who requires." That would be a change to "a landlord who accepts." Page two line 8, "A tenant who was required" could be changed to "a tenant who has provided" a security deposit. And there's one technical piece that would need to be changed on page two lines 11 to 12. It talks about giving back the second month security deposit once someone is qualified and is no longer justified in having that second security deposit. Page two line 11 and 12, it says, "the landlord shall at its option issue a refund of rent." Well, it wasn't rent, it was security deposit. So that should say, "the landlord shall at its option issue a refund of security deposit in excess of one month's rent."
That completes my testimony. I'd be very happy to take questions.
Representative Gibbs (question to Nick Norman): You're a very experienced landlord. Can you give us any idea of how common it is for an applicant to offer a higher security deposit in comparison to how common it is for an applicant — say they can't come up with the one-month security deposit that is already allowable for the landlord to require?
Nick Norman: Great question. In today's market, it's very rare that I find a tenant applying that cannot come up with the one month security deposit. Sometimes that happens. In years past, it was more when the economy was worse, but it's rare. Several times I've had tenants come to our office and offer additional security deposits or offer paying last month's rent to handle their qualification and acceptance concerns, and I have to say, "no, sorry, I can't do that." I've had a tenant in the past — actually a few times, believe it or not — come up to us and say, "I can pay a year's rent in advance." So there are people that have means, but in present law we are not allowed to accept those means.
Representative Reed (question to Nick Norman): Did you just say that or imply that the law currently prevents paying rent in advance, not the cap on security deposit? So if said applicant currently, who had this extra money up front, wanted to go ahead and pay extra months in advance as a way of safeguarding the landlord, they would currently be allowed to do that?
Nick Norman: That is correct. We actually had someone that offered a year's rent and they had some problems with their qualification, and we accepted them. Okay, but if they had money for extra security deposit, we could not do that. Now, it depends on how much we're talking. If someone says, "I can pay you two months rent in advance," that's almost of no value. That just means the issue has been delayed two months. But if there was a two-month security deposit, that's much more valuable, because now at the end of the lease, if there have been any issues, particularly damages, there would be more money to pay for those damages. A one-month security deposit almost universally does not cover the damage that a bad-acting tenant creates.

Ariel Hayes (Renter / Youth Homelessness Advocate): Good morning. Thank you for allowing me to testify. My name is Ariel Hayes. I live in Dover, New Hampshire. I'm a renter, and I've worked in the youth homelessness field for seven years. I also recently graduated with my master's of public health from Boston University. I'm testifying in opposition to HB 1336.
A little bit about me — when I was 22 years old, I lived in my car for two weeks following a breakup. I spent time driving around New Hampshire looking for a place to park at night. At the time, I had two college degrees, a job lined up, little credit, and almost no money to my name. I was really lucky that my parents were able to help me with the security deposit, but they wouldn't have been able to do that if it was two months rent. And they wouldn't have been able to do that if this bill was signed into law.
I was a risky renter. I had limited credit, I had a job lined up, but I didn't have a job that I had started at that point. And charging two times the rent could have actively kept me from finding safe and stable housing, keeping the job I had lined up, and making New Hampshire my home. I've been in the same apartment for seven years now and I've never paid rent late. I have a good relationship with my landlord, and I'm about to move into another unit owned by the landlord with my partner.
I'm really lucky that I had family support and was able to find housing as quickly as I did while I was experiencing homelessness. But there are hundreds of other young people in this state who are experiencing some form of homelessness, just like I did years ago. Some of those young people need a lot of supportive services, and Waypoint and other social services providers are able to provide that. But there's other young people like me that really just quite literally need a roof over our heads.
This bill would make it even more challenging for young people experiencing homelessness in our state to regain stability, because young people experiencing homelessness simply just don't have two times the rent to pay upfront. We're spending all of our money getting our basic needs met on a daily basis.
Something that we know is that the longer a young person is unhoused, the more likely they are to become chronically homeless. So moving into safe and stable housing early is really important for getting back on track.
Representative Newell (question to Ariel Hayes): A lot of what we've been talking about is reducing the risk for a landlord against essentially bad tenants. I just want to kind of reframe a little bit and think about what — where that risk is being transferred to. So essentially, I mean, I know I've been in the situation where I lost my security deposit and there was just nothing I could do. It was going to cost me $500 to have an attorney write a letter, and if we had the $500 we wouldn't have to worry about it anyway. My question to you is — in your experience working with people who are folks who are unhoused, do you find that they are savvy about the law or have the wherewithal, knowledge, or even capacity, you know what I mean, if you're working at a lower wage job, that they would be able to navigate recouping a security deposit?
Ariel Hayes: Definitely not. Like I said, a lot of these young people are living paycheck to paycheck and trying to get their most basic needs met. So spending the time and energy researching the law is just secondary for most of them.
Representative Newell (follow-up): Considering the fact that they wouldn't necessarily have the wherewithal, capacity, time, or whatever to be able to recoup that, are we then increasing the risk to the tenant against a bad landlord? We hear from a lot of wonderful landlords, you know, but are we, in doing this type of thing, increasing the risk for tenants against unscrupulous landlords?
Ariel Hayes: I believe so, yes.
Representative Reed (question to Ariel Hayes): What I'm hearing from your story is that this law would not have helped someone in a situation like you, which I'm also hearing is fairly typical of some of the cases that you work with. Is it fair to say that from your perspective, and the perspective of those that you help, that the ability right now a landlord has is to choose between accepting a higher risk tenant and then not renting it out if they can't find a better tenant? Under this, they would have the choice between accepting a higher risk tenant with no additional security deposit and requiring the additional security deposit. So is it fair to say from your perspective that this would basically go after the market that — it right now landlords are kind of — there's a market force to kind of force them into accepting these tenants because if they can't find a better tenant — and this would shift them over to giving priority to low credit score or other problematic history tenants who just happen to have the funds upfront?
Ariel Hayes: I believe that the housing market is such that landlords are already making choices about lower risk tenants often. So having this isn't actually making the — it isn't actually helping a lot of the people that it attempts to help, because they simply don't have the money to come up with.
Representative Reed (follow-up): So what I was asking is, not only is this not helping the people who it ostensibly is supposed to be helping, but actually it would hurt those same exact people because most of them don't have that extra money up front. So that would shift the housing to being provided to people who might have bad background just have more cash upfront.
Ariel Hayes: Yes, that's correct.

Jennifer Chisholm (Executive Director, NH Coalition to End Homelessness): Good morning, and thank you for the opportunity to speak. My name is Jennifer Chisholm. I am the executive director of the New Hampshire Coalition to End Homelessness. While the coalition appreciates that for all landlords, managing risk is an important and prudent piece of their business, we do have concerns that this bill would unintentionally increase New Hampshire's homelessness rates and further extend the amount of time that individuals and families would be experiencing homelessness in New Hampshire.
A lot of prior speakers have spoken to a lot that I discussed in my written testimony, so I will pare it down to say that I have provided our 2025 edition of the State of Homelessness in New Hampshire report. Section three has a lot of economic data about what's going on in New Hampshire as far as rents and wages, and the math just does not add up.
You can see that in New Hampshire, 49% of renter households are already cost-burdened, so they're spending 30% or more of their income on housing. And for New Hampshire households that earn $35,000 or less per year, about 21% pay 30 to 50% of their income to rent. But an additional 55% of those households are severely cost-burdened, meaning that they pay more than 50% of their monthly income to their rent and housing costs.
So if this bill were to pass, landlords would be able to demand three months rent upfront — the two months for the security deposit plus first month's rent — from at least 76% of New Hampshire low-income households, because their gross income would not meet that standard of three times the monthly rent. The upfront cost to families to move into that median two-bedroom would be about $5,500 that these families, who are already really struggling to make ends meet, would then have to save in order to do that. That's a real concern.
The strain wouldn't only affect the renting households in New Hampshire, but also the entities that provide security deposit assistance would be affected as well. Organizations such as local welfare, nonprofit organizations, and faith communities are already really struggling to meet New Hampshire's existing need for security deposit assistance. Last month, the New Hampshire Coalition to End Homelessness helped convene 19 individuals representing over 10 human service agencies from all over the Granite State to talk about the challenges that organizations are currently facing helping households secure that one month's rent for security deposit, and to try to work on potential solutions and brainstorming.
Doubling that amount would make this work even more difficult for us at a time when New Hampshire 211 reports that they received over 1,000 calls last year from New Hampshire residents that were requesting security deposit assistance.
I would also say that part of the conversation has been on the impacts on minority populations in New Hampshire. So I can say that if somebody is Black or African American in New Hampshire, they currently are at four times more risk to become homeless. And if somebody's Latinx or Hispanic in New Hampshire, the risk of them experiencing homelessness is doubled. So I would say that probably this bill would have some parallel impacts.
As a side note, based on what Ms. Hayes was speaking about, I am an adjunct professor in the social work department at UNH and have been doing that since about 2016. I really have concerns just to validate what she was talking about on the impact on the new graduate. I teach seniors who are graduating with their bachelor's in social work degree. These are youth that New Hampshire really desperately need to retain in order to meet the workforce gaps that we have in the state. And the conversations in my field classes — so my class is really discussion based, talking about their internships, so there's a lot of time for people just to talk about concerns — that concern about not being able to be able to afford living in the state is real. It's come up the last two years that I've taught. I just started my class yesterday, and I guarantee you that it'll be coming up again, where I have to take part of a class just to deal with the anxieties that these graduating seniors are presenting about not being able to stay in the state that they love.
Representative Reed (question to Jennifer Chisholm): I said just a moment ago, I'm concerned that this will shift the market from people who might be able to utilize organizations that help them pay the current security deposit right now — would shift that market over to people who just also have bad backgrounds creditwise but just happen to be able to access extra funds. So my question is, would that not mean then also this would be a huge burden to those organizations that help provide security deposits, basically doubling the financial amount that they would have to come up with to help people?
Jennifer Chisholm: Organizations are already struggling to meet that need in New Hampshire with just one month's rent for security deposit. So yes.
Representative Paige (follow-up): Just to follow that train of logic — is it a — would you say that it's a potential impact of this bill that those organizations would end up being able to serve half the number of people, if we're doubling the security deposit? That if the cost of this assistance is doubled, that we're able to actually provide that to fewer prospective tenants?
Jennifer Chisholm: That funding is finite. So if you do the math, then yes.

Don McKenna (NH Legal Assistance): Don McKenna, New Hampshire Legal Assistance. I wasn't planning to testify, so forgive me. I don't have anything written. I just wanted to recap a couple of the numbers that we've heard. Some of them, but I just wanted to kind of lay it out, level set a little bit, because I really believe — and we all can acknowledge — that there's a housing supply issue in New Hampshire. But I don't think it's realistic to talk about housing supply without also talking about affordability. And I think for anyone who is a renter in New Hampshire knows, and also anyone trying to buy a home in New Hampshire knows, affordability is also part of this crisis.
Just in terms of level setting, in New Hampshire, the median income is $100,000 roughly. But for renters in New Hampshire, it's only $59,000. The median rent, as was mentioned before, for a two-bedroom is $2,024, which is actually really close to the recent number that came out from New Hampshire Fiscal Policy Institute that in New Hampshire, one in four individuals don't have $2,000 for an emergency. That's about an extra month's rent for a two-bedroom. So I just wanted to mention that we already know that's not based on income — that's just across the board in New Hampshire.
This bill focuses on five different circumstances. I'm going to just focus on one which we've talked a little bit about already, but the three times rent piece. What is healthy — I think we all know it's been kind of commonly understood for a long time that 30% of income is a healthy amount for housing. In New Hampshire, for all renters, about half pay more than 30%. For our low-income renters, 55% pay more than 50% of their income.
So I think that's the most important data point I wanted to share. We already have rent-burdened renters in New Hampshire, especially at the low-income level. So 55% are paying more than 50% of their income. They cannot afford to have another — even if they could come up with the extra month's rent somehow from an organization, from a family, from any other source — if they could, because they're desperate for housing, come up with that, it's income that is no longer available to them to fill their oil tank, or to pay for childcare costs, or medical bills, or any other kind of expense.
So I just wanted to reiterate that this housing crisis is also about affordability, and this would squarely make it less affordable, not more affordable. Thank you very much.

Vice Chair: Is there anybody else wishing to testify on HB 1336? Seeing none, I will close the hearing and hand the gavel back to the chair.
Chair: Before we get started on the next hearing, there will be a work session on the bill we just heard, HB 1336. I will chair it. I'm also going to appoint Representative Kerwin, Representative Dumont, Representative Miles. Is there anybody else that wants to be on that subcommittee? Representative Reed? Perfect. Looking forward to rehashing the public hearing again.