Don’t fall for Big Real Estate’s self-serving claims about “renter fraud”.
April’s CPI numbers proved, yet again, that rent is a major driver of the inflation hurting Americans’ pocketbooks across the country. “Rentflation” isn’t some natural phenomenon that comes out of nowhere; as tenant organizers have long argued (and the RealPage scandal proves), rent is being driven up by corporate landlords padding their profits with no regard for decency.
Last month, the Biden administration moved to cap rent increases for the Low Income Housing Tax Credit program. This was a move that tenant organizers, including the Tenant Union Federation (which Revolving Door Project works with), consider an important first step for rent regulation of federally-backed properties. It was exactly the type of policy threatening to stop exploitation that corporate landlords are desperately looking to prevent. So landlords took a move out of the Don Draper playbook: “If you don’t like what they’re saying, change the conversation.” In a bid to cast the billion-dollar landlord industry as the real victim of the affordable housing crisis, landlords have been hawking a new narrative that supposedly wide-spread “renter fraud” is to blame for high rents.
This month, USA Today’s Medora Lee took the bait and published a piece on “Why fraudsters may be partly behind your high rent.” In a gift to the landlord industry, she reported on a recent poll from the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA), two of the largest landlord lobbying groups in Washington and vehemently opponents of tenant protections (including rent control) at the federal and state levels. The study Lee cites surveyed 75 of NMHC and NAA’s corporate landlord members, 93 percent of which claim to have experienced fraud.
So what, exactly, is renter fraud? According to rent-gouging software firm RealPage, which conducted its own unconvincing study on the issue, renter fraud can be any of a litany of“sophisticated deceptive practices,” such as: fake or manipulated identities, misrepresenting income, identity theft, and site staff pushing through unqualified candidates. The last point means “renter fraud” can be a result of decisions not even made by the tenants themselves.
Lee goes on to echo industry talking points on why supposed fraudsters are driving up your rent:
Landlords lose money and time evicting fraudsters, and honest renters may experience rent increases to compensate, property managers and industry experts said. Even worse, honest renters and staff may have to deal with unruly and sometimes, dangerous neighbors.
Those are real risks of being a landlord—but they are one and the same as what landlords have dealt with for as long as landlording has been a thing. (A cost of doing business, if you will.) The landlords claim (and Medora Lee faithfully parrots) that these longstanding risks are forcing landlords’ hands and leading to astronomical rents.
As the National Housing Law Project pointed out after similar industry pearl-clutching about “squatters,” a far more common issue is landlords’ frequent illegal evictions. As NHLP stated, “Corporate landlords abuse our broken housing system all the time to take advantage of tenant housing instability, raise rents, and keep rental homes in disrepair.” And we would be remiss not to mention that many of the corporate landlords represented by the NMHC and NAA—including Camden Property Trust, Crow Holdings (Harlan Crow’s company), Mid-America Apartment Communities, American Landmark Apartments, and more— were found to have illegally evicted hundreds of tenants during the pandemic moratorium eviction.
Unsurprisingly, Lee leaves out crucial context when quoting Laurie Baker, a COO at NMHC member Camden. According to watchdog Accountable.US, Camden is among America’s most prolific rent gougers, touting rent increases while calling rent caps “impediments to running our business,” even after seeing its FY 2021 net income grow by nearly 143% to $312 million. Camden was also one of the earliest adopters of RealPage’s rent-gouging software Meanwhile Laurie Baker is the Treasurer of NMHC and Vice-Chair of its well-funded lobbying and PAC operations.
Two other eye-catching name-drops in Lee’s article are credit reporting giants Equifax and TransUnion (an NMHC member), who are major players in the tenant screening industry. The former is infamous for its massive 2017 data breach, for which it paid a $575 million fine to the Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) for failing to properly secure sensitive consumer data. The latter is a notorious repeat offender of consumer protection laws and has been specifically fined by the CFPB for failure to ensure accurate tenant screening reports. Sloppy data-keeping practices (such as erroneous name-matching or including expunged criminal convictions on a tenant’s file) by tenant screening companies, as we wrote last year on our blog, can lead to many prospective tenants paying higher security deposits or being denied rental housing altogether. The screening industry itself is a major driver of “junk fees” in rental housing and is the subject of an ongoing FTC/CFPB regulatory probe. If Lee is concerned about identity-mismatching in rental housing, it’s odd she completely overlooks the systemic problems in the background screening industry.
But it is the group at the heart of Lee’s article, NMHC, whose supposed concern for “honest renters” is the least credible. As we wrote last year, NMHC spends millions each year fighting for anti-tenant policies, including:
- Opposing rent stabilization and anti-rent gouging laws in states like California, New York, Oregon, and Minnesota.
- Lobbying Congress and the Supreme Court to overturn the pandemic eviction moratorium.
- Opposing HUD’s Affirmatively Furthering Fair Housing (AFFH) and Disparate Impact anti-discrimination rules.
- Opposing CFPB/FTC regulatory scrutiny of the tenant screening industry.
- Defending landlord discrimination against Section 8 voucher-holders.
- Opposing a tenant-backed executive order to institute robust federal rent regulations and tenant protections.
- Opposing the Biden administration’s LIHTC rent cap.
At the same time, NMHC has lobbied intensely to secure billions in lucrative corporate tax breaks in the 2017 Trump tax cuts and 2020 CARES Act. It’s hardly surprising that Lee did not mention this either, as NMHC is wary of drawing attention to their trickle-down agenda. Last month, NMHC and 22 other real estate lobby groups sent a joint letter to Congress that was billed by the industry as an endorsement of supply-focused housing legislation. But buried on page 6 of the letter (and entirely absent from the accompanying press release) was a warning to Congress to reject Biden’s proposals to make the wealthy and big corporations pay their fair share in taxes. It’s obvious why they would not want to highlight opposition to common sense, popular ideas such as closing the carried interest loophole (which overwhelmingly benefits private equity executives) or increasing the top marginal income tax rate paid by the ultra-rich. At a time when public investment in programs like social housing is sorely needed and corporations have shirked paying their fair share in taxes, Big Real Estate will fight tooth-and-nail to maintain an inequitable status quo.
Journalists seeking to accurately report on the rental housing crisis should heed our past advice and do what Medora Lee didn’t: talk to tenant organizers and advocates. Regurgitating self-serving industry talking points isn’t insightful investigative journalism, it’s propaganda.
PHOTO CREDIT: Shedrick Pelt & People’s Action, November 2022