 If you're just joining, you're listening to America's New Landlord, Private Equity. My name is Conor Goodwin, and I'm an events associate with ProPublica. For those new to us, ProPublica is a non-profit newsroom dedicated to investigative journalism. Today's conversation is brought to you in partnership with The Markup, a non-profit newsroom that investigates how powerful institutions are using technology to change our society. At this event, we will focus on two new trends that have reshaped the housing market since the 2008 Great Recession. We will first examine how a flood of private equity money has impacted the housing market, and then look at the shadowy world of tenant screening algorithms that help decide who gets to move in and how much they'll pay. Outside experts will also address potential pathways to change and answer your questions. To ask a question at any point, click the Q&A icon at the bottom of your screen and type it there. Also, if you would like to enable subtitles, click on the closed captioning icon at the bottom of your screen. Now allow me to introduce our speakers. Lauren Kirchner is an investigative reporter at The Markup, where she has most recently published investigations about the algorithms that help decide who gets to rent an apartment and who gets approved for a home loan. Caitlin Shugru Walter is vice president of research at the National Multifamily Housing Council, the trade organization which represents the leadership of the apartment industry. Rashida Phillips is the director of housing at PolicyLink, where she leads national advocacy to support the growing tenants' rights, housing and land use movements in partnership with grassroots partners, movement leaders, industry and government leaders. Jenny Schuetz is a senior fellow at Brookings Metro and the author of Fixer Upper, How to Repair America's Broken Housing Systems. Heather Vogel is a reporter for ProPublica who is currently investigating the rental market. And our moderator today is ProPublica and Texas Tribune reporter Perla Trevizo, all at Perla, take it from here. Being on mute never gets old, right? Thank you, Connor, for that and welcome everyone. Thank you for joining us, both our panelists and our attendees. Can you start us off, Heather, with when we talk about private equity and taking over the housing, the rental market, and specifically, what are we talking about? What is private equity? Sure. Thanks, Perla. So I think the best way to start is just to explain a little bit about how private equity works. So private equity is a form of investment and it works this way. Essentially, money managers go out and raise money from investors who are contributing to a specific real estate fund. And we're talking about private equity in real estate. So these investors usually include some of the biggest pots on Wall Street, like pension funds, college endowments, and also high net worth individuals. So once they get these investors to put their money into this fund, then the money managers go out and they look for properties to invest in properties. And in this case, we're talking specifically about large apartment buildings, which have become very attractive to investors because they're seen as a very stable asset that has been growing in value over time. It's a sort of safe way to make money. So they go out and they buy all these properties. And then here's the key. This is what was really sort of a light bulb moment for me when I understood that what they really need to do is they need to make changes in a very short amount of time in order to increase the profits for those buildings as quickly as they can. So they've got a short window, essentially, to raise the valuation of those properties. And that valuation is tied closely to the profit level, to the income that they're making. So they've got to cut expenses if they can. They've got to raise revenue through things like rent hikes and things like that, whatever they can do to increase those profits. Because, again, profit is in commercial real estate valuations is very closely tied to how much the land is worth, the commercial property is worth. So they've got a few years to increase those profits, increase the value of the building, and then to sell it. So they can sell it and they can make a profit for those investors. They can make the steep profits that they promise. So essentially, at some point, the light went on for me and I understood that they're really just large-scale house flippers. That's essentially what's happening over a longer period of time than you do when you see the guys go in and fix up the kitchen and then sell the house for twice as much or whatever three months later. But that's in his essence what the mechanism is here when you have private equity working in this area. So why did they get involved in the housing? I think both of the changes that we're going to be talking about happen after the recession, so why housing? Why specifically the rental market? Well, me again? OK. Yeah, I mean, I think that the low interest rates and the really readily available sort of cheap financing through, especially through the government-sponsored entities like Freddie Mac and Fannie May sort of helped fuel this. And also there was increasing demand. It was kind of this perfect storm of a bunch of different factors that were coming together to make these attractive investments not just safe investments, but with property values going up, up, up, it was a very profitable place to get involved in some speculation, essentially. Rashida, for you, what are some of the ripple effects in the rental market when you have private equity getting involved in buying this large apartment building? Yeah, so we see almost immediate ripple effects in these kinds of situations. First, we start to see deteriorating conditions. Often these buyers may not live in a city, may not know or may be aware, but may be ignoring things like local housing laws, license and inspections, codes, things like that. So you start to see immediate deterioration of conditions, people not being able to reach these folks to come in and make repairs to their units if needed. So things that are related to that. But then you also start to see these almost immediate rising housing costs, right, particularly if you have low income and working class folks who live in those buildings, you start to see displacement pressures, evictions, and then when low income folks are displaced, they often have nowhere else to go, especially if they are running on a private market, they don't have vouchers or assistance. So that leads to deeper poverty, homelessness, death in some circumstances, right? So the ripple effect is huge. It's not just about, you know, in that moment, who it impacts, right, but also the aftermath of being displaced or being living in buildings where you're not having the conditions be addressed. And so rising rents, lower quality of life and housing stock. And then you also, you know, as Heather's article pointed out, you have these big landlords who become trend setters, right? So as they start to raise rents, the people around them start to raise rents as well, right? And so soon the whole neighborhood is priced out in terms of the people who are living there. And then just lastly, right, corporate landlords being able to expand their reach from these multifamily apartment buildings, right? It's not just the multifamily buildings, it's the student housing, it's the manufactured home communities, it's the low rent apartment complexes, it's all these things that also get caught up in this private equity mechanism. And so it's really, you know, it's almost virtually impossible for the average low or moderate income person or mom and pop landlords to sort of compete in these kinds of systems, right? So even if you do have someone or, right, you have an organized group of tenants who want to buy a building that's going to go up for sale, right? It's virtually impossible for them to be able to compete on that market, right? So you have land and housing being lost in these communities that where it should be, we should be ideally seeing a shift to community control. I think something interesting that I saw from Heather's point, there's been some research of, you know, when when you spend a certain percentage of your income, I think your story said about 32 percent. Heather, the increase in homelessness. Are you seeing that as part of this trend as well, Rashida? And the significance of it right now, when in a lot of the places that we live in, there's not enough housing? Yeah, absolutely. I mean, many people across the country are paying more than 30 percent of their income towards rent. So they are housing cost burdened in some places, extremely housing cost burdened, meaning they're paying 50 percent or more of their income towards their household expenses, right? And we I would be remiss if I didn't name, right? Who is this impacting? This is primarily impacting black and brown communities. Black women, Latinx women are the people who are most highly impacted. They are the see the highest housing cost burdens when they're renting. Right. And so these are the folks who are who are being impacted. Right. And they were impacted before, right? They were impacted before we recognized that there was a crisis before, you know, private equity got to be as big as it is in this space, right? So only adding more of these problems just makes the outcomes worse for those groups of people. Haley, what is your research showing in terms of the the transfer seeing and the ripple effects that we're talking about? Well, if I could actually seize on something Rashida just said, you know, this this problem has existed for a long time, this housing crisis. I think that I heard someone mention from the Joint Center for Housing Studies, it's affecting the middle class now. And that's why we're hearing more about it. I just kind of want to set the stage so we have the great recession. And then we have this influx of millennials who are the largest generation since the baby boomers and they came online and they were the prime renting age, while the recession also stopped construction of multi-family. So we have this huge group of people that wanted to rent. And money was typically rent longer than a lot of other cohorts did at the same age. And so we had all the apartments that were needed and not enough not enough building up happening. And so that's kind of how we've had this had this problem evolve, where we have high income individuals who are who want to rent and there's not enough building going on at a variety of levels. And so that's how we get to this point where a lot of the housing costs are increasing substantially. Jenny, do you want to chime in here? What are you seeing also based on your research? Is this a growing trend? Are we just noticing more precisely as they said it's affecting a larger group of people? What do you get when you have less housing and more private equity getting a hold of this large building? Yeah. So what Caitlin mentioned about the lack of building really over the last decade is really important context. So why is it that private equity is particularly interested in buying real estate and buying large multifamily buildings? You know, one of the reasons why, as Heather said, it's a very safe investment is that there's just not enough supply coming online. So this is essentially an asset class where there's not a lot of new apartments being produced. And so the existing apartments, you're able to raise rents on those because there is such strong demand and there isn't new competition. Right. So and we saw first that the private equity companies were most interested in going in the most supply constrained markets. So they wanted to buy buildings in places like San Francisco and DC in New York, Los Angeles, because these are places with very high demand and not enough competition, they have the ability to do things like buy a 20 year old apartment building, which normally would be becoming cheaper because it's not the newest thing anymore. Right. So these should be filtering down and becoming cheaper apartments that are more affordable to lower and moderate income households. But because there aren't new apartments being built for high income households, private equity companies could go in, buy the building, give it a quick rehab and then raise the rents. It's much harder for them to do that in some of the markets where there's just more new construction going on. Right. So this is an asset class that's attracting a lot of capital because of the lack of supply. And of course, what Rashida is pointing out, this this is hardest, of course, on low income households who don't have options. You know, every old apartment building that gets rehabbed and the rents go up, that's one less cheap apartment for people who didn't have as much money to compete. Right. So we're losing the stock of older, what we call naturally occurring affordable housing. And at the same time, all of the existing buildings are becoming more expensive over time. So Heather, what was the response from the firms that you reach out to in your story? Now, you focus on specific building and you were talking tenants who were telling you the stories about rent going up, maintenance going down, safety decreasing. What was the response in terms of this allegations and the overall trend that you were finding through your data analysis and reporting? I think, again, I think the response from the industry that we heard was that there is this affordable housing crisis that has to do with the level of construction not being adequate enough to keep up with the demand. And in terms of specific tenant complaints, most of the companies I talked to did not want to discuss very specific individual allegations from certain tenants. But the one that I, the company that I wrote about, the most said that they do keep track of tenant concerns through regular resident satisfaction surveys and that they use that as a tool to try to address concerns by residents. I think you have the other topic in this one is both you, Heather and Lauren have have paid more, you know, both of you have been paying a lot of attention as this whole issue about algorithm being used to score tenants, which I think as a renter myself, you know, I have no idea this was going on. Lauren, can you can you take us walk us through the difference? What what is it? And what's the difference from from the, you know, the other screenings that the landlords, the ones that we were aware of that used? Sure, absolutely. So, yeah, the tenant screening industry is something that's crapped up and grown really quickly, but relatively recently. I think kind of alongside the digitization and the free and easy availability of court records, it used to be, you know, a few decades ago, if you applied for an apartment, you would put down some references, some, you know, previous landlords get some letters of recommendation, maybe and a landlord or potential landlord would run a simple credit check on you to make sure your finances were all in order. But now there's so much information available about all of us and court records are so easy to scrape in an automated, very quick and easy and free way that there's this whole industry of data brokers that are selling a product specifically to landlords and property managers that are describing, well, they're sold as a kind of risk assessment because, you know, as we've been talking about so far, real estate and property, it's all about increasing your profits and reducing your financial risk. And so you want to choose renters who are going to be most likely to pay the rent on time and least likely to have to put you through the huge pain of trying to evict them, which is very expensive and time consuming. So what these tenant screening reports show, landlords are criminal records, housing court records, entries in sex offender registries, entries in terrorism watch lists, and also credit checks. And it combines all of this information about a person based on automated searches of all of these databases across the country on the Internet that are, you know, supposedly matching to the correct person. And that sort of leads to kind of the focus of what my reporting was all about the inaccuracy of these things, which I'm sure we'll talk about. But but they are they're sold as a more comprehensive view of a person. And what another interesting point about them is that they a lot of them don't necessarily show all of the underlying data that is matching to a person. They're just giving a recommendation to a landlord or kind of a thumbs up or thumbs down recommend. Yes, we recommend that you rent to this person or no, we don't. Sometimes they assign risk scores, a numerical score that might look like a credit score, but it's just sort of a proprietary scoring system of this particular company and when landlords don't have all of the detailed information that goes into those scores or into those, you know, thumbs up, thumbs down recommendations, they can be a little bit harder for a potential renter who's been rejected to actually challenge those things. So what do you do you find on your reporting that, you know, what can you is there a specific story that sticks with you, you know, why this matters? I think you went over some of the downsides of using this system. What is the real life implication of it? Yeah, so I I looked particularly at the dangers of inaccurate matches. So this is aside from the equally important aspect of you know, the fact that research shows that the existence of a criminal conviction in someone's past is not predictive of how successful they will be as a renter and how able they will be and able and willing to pay their rent. But that aside, there these matching algorithms have a huge accuracy problem and the accuracy problem comes from a couple of different problems in one actually court records, especially online court records. Now are notoriously incomplete, inaccurate, outdated. So anytime you're relying on those, you are going to have potential problems. Then there's the fact that a lot of people in America have names that they share names with other people. There's sometimes where people who have the same name and the same date of birth. I mean, it's not common, but it does happen. And if these matching programs aren't using enough matching factors, if they're only looking at someone's name or they're only looking at a partial name, because there's also this thing called wildcard searches where, you know, if you use Google, you're familiar with if you put in the first couple letters and then an asterisk, you're going to be getting a lot of different combinations and aliases of people. And these these these date brokers are pulling in tons of information about people and doing their best to match them. But often people are denied housing because of, you know, criminal records or past evictions that belong to other people who have names that are kind of like theirs or who have partial dates of birth to theirs or people who have similar social security numbers to theirs. I in one of the stories I wrote, I told a story of a woman named Samantha Johnson, pretty common name. She's been denied like six or seven apartments in her life because she shares a name with someone in Minnesota across the country. She lives in Oregon, who has a very, very long rap sheet. And she can challenge it. She challenges it every time and says, this isn't me. But by the time she gets through that process, you know, the apartment's gone. The housing market moves really quickly. I also told the story of Sandra Smith, who wasn't able to get into public housing because she has the same name and lives in the same town as someone who had an eviction in her past. And then I just want to add one last point. I also thought it was interesting that I found that these mix ups do have a disproportionate effect on black and brown Americans. Like so many problems we're talking about today, because these groups of people tend to share fewer unique last names with each other since this data shows that they are just more likely to be mixed up with other people. And then you combine that with the fact that people of color are overrepresented in the criminal justice system so that the people that these housing applicants are going to be mixed up with are more likely to have criminal records, then you can see that this creates a real problem. Rachel, what's the difference between using a credit score in terms of the outcomes or potential consequences that we just heard Lauren talk about? What's the difference between using both? You know, our both problematic is one more so than the other. And how do you see localities responding to this? Did you ask that of me? I'm sorry to say. Yeah, I mean, I may want to kick that to someone else to talk more technically about the difference between tenant scores and credit scores, but I'll just say that both are used and both have a level of mysteriousness around them. And in terms of how what goes into them, just as Lauren described, what's being used, how they're scoring, there's just a total lack of transparency, more so in the tenant screening scores, I think. But the impact is the same. It locks people out of housing opportunities that can change their quality of life generationally, not just impacts them, but impacts their families, impacts their children, particularly because the disproportionate disproportionality of eviction records on on certain families, low income families and black and Latinx women who are overrepresented in the eviction court system. And so these things lock people out of housing opportunities generationally. Local income people apply to more places more frequently. So there may be several different companies with several different reports on a person. So it's extremely hard to get them corrected. It's extremely hard to access an attorney who is focused on these issues or has any level of expertise, technical expertise to assist with that, or just don't have time to pursue a case that is not going to end up in them being able to access the housing that they're applying for. So just the barriers are extremely high. And, you know, I'll talk about the fair housing issues in a moment, but I want to allow someone else to answer your question directly about the difference between tenant and credit scores. Heather. Yeah, one of the things that we found was that while credit scores, the regulation of credit scores is fairly complex and there are a lot of critics still of credit scores, it is more developed, probably because of the history of court cases over decades, really, then of tenant scores, which are newer on the scene and don't quite have the same scrutiny that credit scores get. We found that we were calling the tenant scores a shadow credit score because it's sort of this almost like the secret rating that people are getting that has even less transparency than credit scores. For instance, there are some federal agencies that have supervisory authority have the ability to ask a company that is doing credit scoring certain companies to basically open up their books and show the regulator the algorithm and how it's working and what its impact is. And what people told us was that nobody's doing that with tenant scores in any sort of systematic way. And so they're kind of flying under the radar in a way that we don't really understand like which which factors are being used, which how they're being waited. Recently, the Massachusetts Attorney General reached a settlement with two tenant screening companies because they were using essentially a toggle button that would allow them to exclude like a vast number of candidates for an apartment. Anybody who was I think it was housing vouchers and also criminal records, they could just the landlord could just push the toggle button and then all those candidates would disappear, like even if they had a great history of repaying their rent, had great income, you know, might have had a lot of other things going for them, the Attorney General found that was like deeply problematic and reached an agreement with the company to disable that particular feature. Are you seeing any of that? Okay, so say if I could just add, I think in the past couple of years in particular, there's been an acknowledgement that certain that a one size fits all approach doesn't work. And, you know, as Heather said, these are new concepts. It takes a while to to figure out what is the right approach. I will say there are a lot of companies, apartment owners and managers that have acknowledged that some folks may face some barriers to either continuing to rent or to even getting in the door. So they're setting up things like alternative security deposits. Asusu is a company that used a lot and also allowing residents to opt in to have their rent added to their credit report. They don't have to and it only it only reports if it's a positive experience. They missed their rent. It does not. It does not account negatively for them. It's not widespread yet, but I would say that folks are acknowledging that there are some barriers that people face and are trying to figure out ways to work around it while still managing the risk. Again, that's another thing we're still trying to sort through. Are you seeing local you mentioned messages? Are you seeing any movement from the local or state or federal level? You know, as this new approach comes out or it's being more widely used. And this is for any of our of our panelists. You want to chime in? Um, I can I can talk as having worked at the Federal Reserve Board before, which is one of the federal financial regulators, regulators are very aware of the problem of data privacy, not just with tenant scores, but also some of these things get used in qualifying for a mortgage in access to all sorts of consumer financial services, getting access to a credit card and so forth. So regulators know that this is a new thing for them. They also don't move that quickly. So figuring out what's going on, how to respond, writing the regulations is a slow process. So I would imagine that we're going to see more activity on this sort of a whole set of things where technology is changing the way companies are doing business. And the companies evolve very quickly on the ground with this. And so it's often quite difficult for regulators to keep up and to move quickly. Some of these things are regulated also at the state level, which means even if some states start to get out of heaven, it's unlikely that we're going to have a consistent response across all 50 states. Where do you want to? Sure. Yeah, I just wanted to jump in on the federal regulation side. We've seen some action just very recently from the Consumer Federal, I get this wrong, Consumer Financial Protection Bureau, the CFPB and the FTC share oversight over the tenant screening industry. And just this past fall, I think in November, they put out some new guidance saying that tenant screening companies had to use more factors than just a person's name to match a housing applicant to the records that were going to be pulled into their report. That's sort of like the bare minimum. But there are so many factors that they can use to match besides their name, date of birth, social security number, past addresses, all these things. So they were just sort of clarifying that if tenant screening companies only used someone's name, risking so much inaccuracy there that they would be, you know, they would risk being in violation of the Fair Credit Reporting Act. So that's that's something. I think this is a good segue. You know, we've talked about the problems. And as several of you have said, you know, these issues tend to affect certain more vulnerable communities more so than others. And it's usually the communities that are impacted by a wide range of issues. So what what recourse do renters have, especially right now? Less housing available, higher rents, more on by private equity. What does it stop? You know, what does it mean? What recursive they do they have also for mom and top landlords? I don't know who the first she died. You want to take this one? Sure, I can kick it off. I mean, the short answer is they have very few recourses in most places, right? And so it is going to take a level of intentionality at all levels, the state, local and federal level around addressing these issues. And so we are, you know, starting to see some some legislation and policy wrap themselves around these particular issues. So, for example, a number of places have ceiling walls that will seal eviction records from view in some ways, right? That can minimize how they're utilized in tenants screening and then also several places starting to create tenant screening protections and policies that limit again, how tenant screening can be used or how eviction records or credit scores can be used. So in Philadelphia, we created a policy called the Renters Access Act that says that landlords cannot just only utilize the credit score to make a determination, cannot have blanket eviction bans that, you know, primarily impact black and brown women, have to give a copy of any third party information that they utilize to, you know, to screen an applicant, right? So it minimizes the barriers that tenants have to try to get a copy of a report, call up, you know, to find out the company, right? All these different things that again, at the end of the day, it does not land them in the unit, but creating a process where a tenant has an opportunity to get that information, get that information corrected, but still be in the running to be able to access a home or a unit is really important. So having some laws that look at that. And then protections and programs that, you know, at the federal level, you know, as Lauren mentioned, CFPB has done a good job in the past couple of years of releasing advisory and enforcement bulletins. So people need to pay attention to that, right, and incorporated. And then I think there's a lot that HUD can do, particularly around the AFFH process for those who don't know, affirmatively furthering the fair housing process, right, that has jurisdictions look at barriers to accessing fair housing. So seeing this issue of algorithms and eviction records and tenant screening reports as a fair housing issue and releasing guidance that clarifies how local jurisdictions can take the necessary steps to address the fair housing impacts and start to leverage these strategies to address tenant screening technologies. And yeah, I won't go into more, but I think there's a bunch of other things that HUD could do and the CFPB can continue doing. And ultimately, what I would love to see, right, is amend the FCRA to prohibit credit reporting of evictions and rent and debt. Period. Why not? So those are just some of the solutions that I think folks are exploring to create more recourses for tenants, because as of now, it is really challenging, especially if, again, if you're in the middle of a process, if you're being displaced from one of these private equity places, right, and you're trying to go out and rent again, it's almost impossible, especially if you're in a situation where they've illegally evicted you to file something to try to get you out, intimidated you. Now you have a record, right? That's going to follow you for the rest of your life and be incorporated into these kind of tenant screening algorithms. And so there's a couple of different things that we need to do in layer and take some bold actions to address these issues. I think it's related to we have a participant question for either Heather or Lauren, you know, how can the tenant deny a rental property because of an accurate, automated, automated reporting, tenant's course, by those funding findings. And I think that's, you know, what, too, what she was saying, that there's very little recourse. Do you even know that the reports are inaccurate or they just, you know, did they just get a denial from the company if either of you want to take that? Sure. Yeah. Because of the Fair Credit Reporting Act, you, the renter or the housing applicant have a right to know if you've been denied because of one of these screening reports that doesn't necessarily mean that you will find out, but it means that the landlord is supposed to tell you that the landlord that's denying you does not have to give you a copy of the report that they have looked at. However, they have to tell you the name of the company that did it. So if you're really on it and you get denied and you don't feel like you should have been and you can ask the landlord, what is the company that screened me, you then have to go to the company and challenge the denial with them. It's often a long process and a frustrating one, although, again, the Fair Credit Reporting Act mandates that the company respond to you in 30 days. Is that going to happen? Who knows? But that's the law. And so, yeah, the dispute process, as I've heard from many people in my reporting that it's just it's really frustrating. And sometimes people end up taking these companies to court and suing them, which, of course, is not an easy or a quick process either. I don't know, Heather, did I cover everything? Yeah, yeah. I'll just underline that a number of people we talked to couldn't even find out what had gone wrong, that even that most basic question of why. Some would get that notice that Lauren referred to from the landlord, saying it's because of your credit history, but they didn't find out any specifics about they might have a sort of middling credit score, for instance. And they might they're not going to find out the threshold or whether there was a specific debt that was problematic or something else. So we ended up talking with we did a survey where we just sort of reached out telling people to contact us and tell us what was happening out there and we got responses from dozens of people. And a lot of them just were, you know, completely in the dark about why they were projected, which is kind of astonishing, because if you don't even know what the problem is, you can't find out if there is something that you can fix or whether there's an error or whether it's your credit or it's just people are really powerless in this situation, even though the law is written in a way that you would think that they would have recourse. Did either of you get a sense from your reporting of how widespread its use is? Is it still mostly credit scores and to a lesser extent the 10 screening or do we do we know? I saw just one industry survey, so kind of unofficial, but that the nine out of ten landlords now use something like this. So it is extremely widespread, but there's also a wide range of kinds of screening services, some that are more sort of high tech than others. And there are so many companies doing this, because like I said, it's very easy to set up a computer program that like scrapes a bunch of court databases. There are thousands and thousands of companies that do this now. And just to underscore, if you're a low income person going out, trying to apply to several places that are affordable for you, you're having to pay these application fees each time because they're utilizing or they claim that they need the application fee in order to run these reports. They'll tell you that. And then you could have you apply to 10 different places in 10 days and each of them have maybe used a different company. And so how are you going to be able to, as a person who's low income, trying to you're about to be homeless, be able to get this information that again, is not going to serve you at the end of the day. It's going to take several months or weeks. You can make a request. They may not respond to you right away. Maybe you don't have email. You know, there's just all these different barriers and challenges to a person. So even though the law exists and there's some protections there, it is really challenging, almost impossible for most people who are in these circumstances being denied these units to be able to access that process and have it work out for them. I just wanted to give two sort of framing pieces to this. One is that right now, people who are trying to buy houses are also experiencing a lot of sort of their 20 people putting in their name for every house or 50 people and only one person is going to get it. Right. So at the end of the day, part of the problem is just there aren't enough homes for all the people who want to live someplace. Right. And so, you know, landlords can afford to be picky when they've got lots of applicants. Right. And so it's just harder to get an apartment for anybody when you've got a very tight market. Right. That's something that fundamentally we're going to have to address outside of just the consumer protection things. But the other thing is I think it's really interesting to compare sort of the landscape for renters trying to rent an apartment and the landscape for homeowners, for new homeowners trying to get a mortgage. You know, the federal government has a much bigger footprint in the owner occupied market and regulating access to mortgages. Right. So we have these two federally sponsored enterprises that have really explicit guidelines from Congress and from their regulator. Right. We have rules about what you're allowed to ask for when people apply for a mortgage and how this information is used. You know, the HUD one credit form that gives you a very simple explanation of the mortgage terms. So all of this is provided for consumers of mortgages so that people have a similar experience and people can't get taken advantage of and they have more clear information. We have nothing like that for renters. Right. The rental market is regulated by state governments who all choose to do this differently. Most of them don't have an equivalent kind of consumer protection lens where they're providing consistent information for renters about what their rights are and their responsibilities. Right. So this is a very sort of like upstream policy decision that we've made that the rental market is kind of going to be the Wild West and the owner occupied market is going to have a lot more federal guidance. Right. And at some point I think it's worth talking about whether that's a fair way to regulate things. But Jenny, why the difference between both markets? I think that's a good segue to the next question I have. Because the US has decided that home ownership is the best outcome and that homeowners are somehow better people, more deserving of protections and renters are sort of your renter until you can afford to become a homeowner. But we don't want to make it too comfortable because we really want you to buy a home as quickly as possible. And I think that's part of the issue. I mean, so I've worked at the council for 11 years now. And I feel like it has people's psyches have not caught up with the realities of today. People like to rent and it's akin to home ownership. And people don't think that they can just build wealth through home ownership. And we just haven't caught up to that. A lot of us. And so we're still trying to move through it. Do you all see this shifting any time soon? You know, the the conversation, the the focus from mortgage to the rental market as more people choose to rent, you know, to take this point. I think you're certainly go ahead. I think we've kind of already seen it part of the reason we have so much attention on corporate landlords is because there's been a professionalization of the apartment industry. So I would argue one of the benefits, you know, we talk about all these different tenants, screening companies. You know, you can have a big landlord that or big property owner that chooses to contract with one company that can afford to pay for a better service as opposed to a mom and pop who might just be trying to cut corners. And they're going to go online and hit Google and choose a fifty dollar report. And they're just going to go, you know, the quality is likely the same as the price there. And so to Heather's point with the, you know, hitting the toggle button, if you make the choice, yeah, we need to fix that. Then it's the click of a button on an owner that or a manager that has tens of thousands of units, that's tens of thousands of units that are impacted. So the same reason it can be a bad thing. It can also turn into a good thing. But I think that the professionalization of the industry, it has come a long way in a short amount of time. So we're starting to see that in terms of changing people's minds, homeowners versus renters. Yeah, and there's certainly more, more attention to the financial stresses on renters, partly because of the pandemic, right? And the fear that we were going to have massive numbers of evictions. The fact that middle income households are more financially stressed by housing costs than they were gives it more political oomph, right? So elected officials are more likely to pay attention when their middle class constituents call up and say, I'm not being treated fairly or I can't afford a decent apartment. So I think that that level is helpful. But some of the policy decisions that we made a long time ago, like devolving authority over this to state governments, those are very hard to change at this point, right? And so I'll be curious to see whether the CFPB under this administration take some more active role. There are things that the CFPB could do probably a little bit more so than HUD, things like developing a national rental registry of landlords who cross over state lines, right? How do we know whether they're private equity companies that are providing poor quality management in Georgia and California? The only way you know this is if you have some sort of national database that actually tracks this, that's the kind of thing that the CFPB could choose to do, right? And then could look and see whether or not they're bad apples consistently. You know, some of this is investing up front to have the information we need to make good policy decisions and to date, we just really haven't done that. Thank you. And thank you also to everyone who has submitted questions ahead of time and during the panel, I think we could spend the entire day talking about this and it would not be enough, right? Heather, in the beginning, you mentioned Freddie Mac and Fannie Mae and the government sponsored. And I think throughout the conversation, it has come out of, you know, what the difference in loans and protections. I think something you point out in your story that experts were telling you that could be done differently is protections as part of stipulations, I guess, for the loans and someone from the attendees was also asking about the shorter term turnaround that you mentioned in the beginning of our conversation. So I guess I'm putting both things together and if you can address, you know, can they do something different in terms of the loans for the private equity firms and the role that this shorter term lifespan plays in what you are seeing or what you saw through your report? Sure. So what people were telling me, you know, what we found was that Freddie Mac had really taken to financing these big private equity deals over the last decade in a big way. We looked at the top 20 deals that Freddie Mac had ever done with a single borrower and found that 85% of them were with private equity firms and that all of those deals had been done since 2015. So they had they were doing a huge volume of business certain years with these folks and that financing comes with very few strings attached is what advocates and other experts told us that, you know, this funding is being provided through the secondary mortgage market through Freddie Mac without there being rules around evictions or around, you know, potential grace periods or some of the tenant protections that you see kind of pop up in a patchwork way around the country in local jurisdictions have not really been part of the conversation for these large apartment buildings. There's been a little movement on that in the mobile home, mobile home park industry with some new requirements, tenant protections in those areas when they've received Freddie Mac financing or Fannie Mae, but not in this apartment area. So there's a lot of people who have said that they would like to see that, you know, considered potentially as part of what these agencies do. So the regulator for Freddie Mac and Fannie Mae, the Federal Housing Finance Agency required both of them to submit equitable housing plans at the end of last year. And I just googled to see if they were made public yet. And I I don't see any evidence that they have been yet. So anybody correct me if I'm wrong. But I think, you know, last fall, a lot of sort of housing experts were writing in and urging that the GSEs take a look at tenant protections and see whether there was any way for them to somehow incorporate that into their finance a bit more than it is today. So, Heather, you know, we had a lot of people writing about asking how they can learn more about the private equity presses in their areas, you know, what resources are publicly available to dig deeper. Into the question, you know, are they easy ish? I guess ways to replicate the reporting that you've done. I don't think you can start us off. And if anyone else wants to add it, you know, for other people looking into this issue, both public and journalists. Yeah, you know, it's it requires a little bit of sleuthing, really, to find out who owns these buildings because they're held in the name of an LLC that's often created only to hold that property. So it doesn't automatically tell you who the ultimate true ownership is, which private equity firm is behind it, for instance. Often it's not if it's a big building, it it can be at times not too hard to find out, you can find out by looking on, you know, the website for the I guess you can Google the apartment complex. You know, and often you'll see apartments dot com. But sometimes in the listing, it'll mention either the property manager or potentially the owner, especially if it's the same or you can try to find, you know, sometimes the owner is listing the property on its website. That's both for tenants and also for investors to understand what they hold. So those are, you know, Googling is actually a good way to find out. Property records won't always get you there. I've had instances where I've gone, but I've gone into the find the property records and looked at, you know, deeds and I guess mortgages of the paperwork that was filed in them and then looked up executives to see who they worked for to try to understand who is behind certain buildings. So it is actually very it's difficult to do over a large number of buildings. If you if you were trying to look at which companies are moving into a certain area, that is going to require some time intensive work. If you're trying to find out one, you might, you know, you might be able to do that, although that's going to take some time too. If anybody has other tips, please. Yeah. And Philly folks have started mapping groups of advocates, tenant organizers, legal services folks, researchers have started mapping these private equity and these big landlords who have multiple LLCs. And you're right, Heather, it takes a ton of research. It takes a ton of just digging in, but cross referencing property records, doing some googling. Also, if you are in a place that has landlord licensing, you know, sometimes that's helpful if there's a license involved to sort of look what's listed on a license and other sort of property records that may be sort of available to you and your community. That's the way that we've done it and have been able to build a database of some of the larger landlords in Philadelphia who are not in Philadelphia, but right at properties in Philadelphia and are doing some of the stuff so that we can start to track it and start to do some of that. And the other thing I saw mentioned in the Q&A is a lot of properties are also seeing loss of subsidy and loss of affordable provision. So properties like subsidized project based properties that are losing or lie tech kind of properties. Right. It's also worth mapping those, right? Because those are the want to be the places that get snatched up by private equity or other folks. So it's also worth mapping where you may be seeing loss of affordability restrictions or subsidies in your city. So we also did that in Philadelphia, where we mapped out where we would stand to see losses of certain types of subsidized housing. And those predictions came true just a couple of years later as those properties start to lose their subsidy and are getting snatched up by pen and other sorts of big, big places. So I saw someone mention that in the comments. So just wanted to address that. Is there any data to back up the assertions of private equity owners spending less on capital improvements? One of our attendees is asking. I think that's part of what you're getting with the last set of answers is this is a world where data is hard to come by. And so knowing who owns what share of the apartments in any given city and then sort of the complaints by people who live in the property or what kind of care they take of it, this is just not something that we track systematically. And so it's really difficult to know whether any individual landlord is providing a good product or not. And I think one of the other questions might might get to this as well. Do we have a sense of what percentage of the rental market is owned by private equity, you know, how leverage is private equity and with what kind of term structure, which private equity firms are mainly involved in this market? Do we have any sense of any of the above? Yeah, Caitlin, that's I was going to cite your data. Yeah, I mean, it's hard to so I only work in the multi family world. I don't work on single family rentals at all. There are 21 about 21 million rental apartments in the United States. And so we do a data a data survey every year called the NMAC top 50. We do top 50 owners, managers, top 25 developers, contract builders, and then syndicators as well. Loan, housing, tax credits. And the top 50 owners have it hasn't changed a ton over time. The number one firm is a PE firm now with 100 and some thousand units. However, I would say that there was a different type of owner in the early 2000s that had almost doubled that number of units. And so when you look at it, I think the top 50 is about two and a half million out of that 21 million. So it still is a pretty segmented universe. Moms and Pops still do dominate it. But we do have some PE representation on the on the list. We, quite frankly, I don't really look at type of owners a lot. We tend to look at broad trends like costs are going up for everybody. Rents are going up pretty much across the board. So looking at it from that perspective. And the definition sense for multifamily can one of you just make, you know, well, can I just jump in on that last one a little bit? Because what we did because of the problems with the property data and how little information that we have, as Jenny was talking about, about, you know, telling us specifically about the industry really into the financial backing of it. We use that survey. Caitlin was talking about and we looked at the top 50 owners going back a decade and researched each of the financial backing for each of those companies going back 10 years to find out how many were private equity. And what we found was that a decade ago, the top of the top 35, about a third of them were private equity. And then last year, I think it was half. So there was an end all the years in between. You could see the expansion happening slowly. So that was, you know, really the basis for us being able to document what a lot of experts were telling us anecdotally that private equity had expanded their presence significantly, definitely among the top players, the big players. Now, we have a few minutes left. Any trends that you'll be watching for any as we move forward? You know, are we we've talked a lot about the housing market crisis and homeownership, you know, do we do expect the rental market to crash as well? Or, you know, what what are you as you move forward with both in your reporting and research and advocacy, things that you're going to be particularly watching for and that we should be paying more attention to? I don't know if I see Jenny on my top right, so we'll start with Jenny. Yeah, I don't expect to see the rental market or the homeownership market crash anytime soon. That said, with inflation and potentially recession, they often it's hard to know, but they're just very, very strong fundamentals. As Katelyn said, we have historically large generations, the baby boomers, the millennials all need places to live. Lots of people who actually are in very strong positions, but they're in common, so there's a lot of demand for housing. We've been under building nationally for a decade and in the hottest markets, we've been under building for 30 years. So it's it's hard to see a whole lot of softening going on anytime soon. Katelyn, I'll just think I'm sure. So I'm a little pessimistic. I've been working on a cost of regulations research update for the past couple of weeks, and I just saw the vacancy rate in the Northeast right now for apartments, multifamily apartments is generally rented units in five with five, at least five units in the building. I should have said that earlier. It's 1.8 percent. But you know, we say healthy is five percent. So 1.8 percent. And then you look at costs, as Jenny said, growing up all over the place. And then I'm a trained planner. I I remain pessimistic about the ability to change the owning, although hopefully I'm wrong. I I don't see rentals crashing anytime soon. But I do worry about costs for for both owners and the property owners, as well as the residents going forward. Lauren. I want to think about the feature of tenant screening or credit reporting in general. Currently, these types of things are extremely low tech, extremely dumb tech of poor matching algorithms and bad outdated data and court records, as I explained earlier. But, you know, just looking to the future and our surveillance capitalism, there's so much information being generated about us all the time. And so I would imagine if I were a credit reporting agency or a tenant screening software company, I'd be thinking about ways to incorporate other types of information into predictive risk scores and then selling them to anyone who wants to buy them. That's just sort of that's my sci-fi answer, I guess. And Heather. I think that with the interest rates going up, it'll be interesting to see whether some of the private equity activity slows down a little bit or if it continues in some form and probably ongoing just to see what the fallout is from the affordable housing crisis that we do have. It's been sort of described to me that people as the rents go up, even at the top, people tend to get sort of pushed down the housing ladder and more people fall off. And I think we've seen that in a number of cities that have a lot of people who find themselves without homes. And I guess the question is, you know, what's going to happen moving forward in terms of how cities are going to help those folks if they can and how the market might adjust? And Rashida. Yeah, just to end on a solutions note, some of the things that I see emerging and that we're working with a lot of folks on our community control of land, right? Things that will decommodify housing, take it out of the housing, you know, the private market, things like tenant opportunity to purchase, community opportunity to purchase policies, right? And you also need the funding and resources to go along with it so that people can actively compete in these kinds of spaces. And so community control of the land, that's the way to go, folks organizing in their communities to demand better and differently. And then I already shared some solutions around how we can address some of these issues around algorithms and tenant screening, but it just it needs to be an all hands on deck issue because it's only going to deepen and get worse. Thank you, everyone. Great. Well, that's our time for today. I want to thank all of our speakers, Rashida, Caitlin, Heather, Lauren, Perla and Jenny for an insightful conversation about an urgent issue. And thank you to the audience for joining us and for all your thoughtful questions. We're sorry we couldn't get to all of them. Finally, thanks to the markup for partnering with us from all of us at ProPublica. Thanks so much for joining us and we hope to see you next.