Quotes condensed for clarity
Another year has passed and you’re faced with an age-old question: should you renew your lease or go apartment hunting? For some, the process is easy — simply brandish your perfect credit score, open your wallet full of cash to pay a security deposit and the place is yours! For others it isn’t so simple, and software is only making things more difficult.
In the U.S., there are numerous companies working in the background of the rental process, using algorithms to screen tenants and determine their rent-worthiness. In many cases, it isn’t always clear how these algorithms work. In other cases, the algorithms lean on data they shouldn’t. In these scenarios, it can lead to unfair evaluation of renters.
“Tenant screening has over 40 years of history but the introduction of machine learning, web scraping and data brokers have created new issues around all of this,” says Wonyoung So, a PhD candidate at MIT. Rent issues have lived rent-free in Wonyoung’s head for three years now and he’s been studying tenant screening unfairness for just as long. The Mozilla Technology Fund is backing Wonyoung’s project, OpenTSS, which aims to add transparency to this whole tenant screening maelstrom. OpenTSS offers renters $100 in exchange for their tenant screening report. In return, Wonyoung and other MIT researchers study the uploaded tenant reports in order to better understand this issue. (The site promises not to share or sell this data to third-party companies.)
There are many issues surrounding automated renter screening. Wonyoung points out three main trouble areas.
Poverty can lead to more poverty, and eviction records only make the feedback loop worse. Picture this: a tenant regularly misses rent payments. In response, their landlord files an eviction notice. With an eviction on their record, the tenant — who already struggles to regularly pay rent — suddenly has trouble landing the next apartment. Rinse and repeat.
Wonyoung notes an added layer that complicates things — the fact that many evictions don’t actually lead to tenants getting actually tossed out of their apartment. “In order to collect late rent, landlords will frequently file evictions even if they don’t want to evict the tenant,” says Wonyoung. “In many cases, the landlord and tenant agree upon payment. Research from Washington D.C.’s housing courts show that, in D.C. for example,only 5% of evictions are actually executed. 95% of eviction cases are just filings that are either dismissed or settled during the eviction court process.”
Clearly no one told the data brokers. Wonyoung notes that many tenant screening services and third-party data broker companies still count eviction records against a tenant when they’re being screened — even those 95% of D.C. evictions that never actually result in tenant removal.
Can you believe a big company would assign people scores to determine how worthy they are to use their products? That’s us being sarcastic — we definitely think big companies would do this, just look at credit scores. “Tenant screening companies have created their own scores, but with their own metrics,” says Wonyoung. “They developed these scores using AI and machine learning to predict the likelihood of evictions and skipped payments.”
Tenant score metrics are unclear, and there aren’t many laws telling companies what is and isn’t fair game. “Compared to credit scores, tenant scores are much more unregulated. And each company has its own ranges and metrics and datasets it’s pulling data from,” says Wonyoung. “It’s difficult to figure out how they arrive at those scores because there is a lot that isn’t disclosed. It needs more scrutiny.”
So how do we fix tenant screening? Whose responsibility should it be? Wonyoung thinks there should be more protections for renters pre-eviction and that the government needs to step up. “I’d like to see the U.S. Department of Housing and Urban Development (HUD) get involved,” says Wonyoung. “The Federal Trade Commission (FTC) and the Consumer Finance Protection Bureau (CFPB) already regulate issues related to tenant screening using the Fair Credit Reporting Act, but HUD should be one of the main players in this conversation. I believe tenant screening algorithms should also be regulated under the Fair Housing Act.”
In the meantime Wonyoung points people to the site, OpenTSS. Wonyoung and other researchers at MIT use the site to help renters obtain their tenant score and, if they choose, let renters donate their tenant report for research purposes. There’s a long road ahead when it comes to fixing tenant screening. But perhaps one day eviction won’t mean prediction of poor housing.
Tenant Screening Companies Make Hard Situations For Renters Even Harder — Here’s How
Written By: Xavier Harding
Edited By: Audrey Hingle, Innocent Nwani, Kevin Zawacki, Xavier Harding
Art By: Shannon Zepeda