If nothing else this seems like the type of data that you just don't want to collect. The PR and potential risks of what happens next massively outweigh any sort of value I could see this having given the situation around COVID.
It also seems like exactly the sort of information that the credit agencies would collect and offer for sale.
As we have seen with their data breaches, they have no shame, and operating in a black box under the shield of "trade secrets" lets them do any slimy thing they want.
PR might bring down a small company like Naborly, but Experian and the others are bulletproof.
It's much easier, common, and not incorrect to say, "Company A does bad things" rather than "An important subset of the people at the head of Company A have enacted policies that caused bad things to happen."
They are shameless...but the big players also seem smart enough to do these things passively and quietly.
If I put on my 'if I where an investor' hat...any CEO who would post a YouTube video basically asking for this data seems right now seems like so tone deaf action that I wouldn't want them making strategic decisions because they are so short term focused.
I don't really see a way for Naborly to be negatively affected by media blowback from this, considering their consumers are strictly landlords who only stand to gain from these kinds of features. I would agree that this behavior is sleazy, but it's par for the course under a property regime that prioritizes profits, interest, and rents.
>Former Ontario Information and Privacy Commissioner (IPC) Ann Cavoukian called the practice "unconscionable." "If I were still the commissioner, I would be all over this,"
The blowback could just as easily include new regulation
I don't know very much and can't speak to it's legality, but I do know Canada (at least Ontario) has very strong tenant protections, and the law tends to land on the side of the tenants instead of the landlords. I wouldn't be surprised if this was either illegal or if tenants could take the landlord to court if they though they were passed over because of this.
The LTB [1] in Ontario is heavily leaned towards the tenant and currently is blocking all evictions in the city regardless of payment of rent.
>COVID-19 Notice: Until further notice, the LTB is suspending the issuance of eviction orders and all hearings related to eviction applications — unless the matter relates to an urgent issue such as an illegal act or serious impairment of safety.
What stops them issuing a no-fault eviction notice as soon as the COVID-19 notice is relaxed, because on their preference for a more creditworthy tenant?
all evictions require approval by the LTB ... Landlords are fine to file an eviction but it has to be approved and while no official policy has come out yet it's incredibly reasonable to expect that there will be provisions put in place to keep people from just being insta-evicted once the state of emergency is over.
that said those that can pay their rent SHOULD BE, because I imagine one of the critera for having the LTB rule in your favour is showing you were in a hardship at the time.
I'm in BC, not Ontario, but no-fault eviction isn't a thing here. You can evict a tenant for reasons such as:
- didn't pay rent
- late paying rent at least three times
- your family is planning to occupy the unit
- unit is uninhabitable
- major damage to property
- broke the terms of the lease
Family occupancy is the most common workaround that landlords use, and it takes a long time to make it happen. Followed by "renoviction" (leaving the unit in disrepair until they can force the tenant out for construction). That is also expensive and takes a long time. In any case, there has to be a reason.
I've won a case in the LTB, and being on the winning side means basically nothing. The rulings are not enforced, and making them enforced means having to go to court a second time.
> Housing lawyer Benjamin Ries, with the University of Toronto's Downtown Legal Services, said his organization has sent a letter to Naborly seeking clarification of the company's intentions, because it seems like it's building an illegal "blacklist.
Is such a blacklist actually illegal or did they mistype “immoral”?
It violates privacy laws so it's illegal. And like the article also says, credit rating agencies need to be registered through the government and consumers need to give their consent for a credit check.
I am not so sure. Do you have to give consent for a bank to submit a charge-off report to the various credit bureaus in case of negative balance or other delinquency?
This sounds like the initial data collection which is a massive grey area IMO. The use of that data to make an approve/decline decision is where the regulations start to take effect.
> I am not so sure. Do you have to give consent for a bank to submit a charge-off report to the various credit bureaus in case of negative balance or other delinquency?
No, but you need to give permission for anyone to run a credit check on you. Literally no one can legally see that info without you giving them permission to do so. Whereas anyone can sign up for this service and see info about you.
Edit - also, banks won't give you a bad score as long as you keep paying the minimum on all your credit products. And in my experience, their willingness to give you a mortgage or extend credit has more to do with your income and assets than a credit score.
> No, but you need to give permission for anyone to run a credit check on you.
Whether that is true will depend on your jurisdiction. In the U.S. at least, it is not true. In the U.S., a consumer report needs to be for a permissible purpose, but it does not always require explicit permission of the consumer. See 15 U.S. Code § 1681b, https://www.law.cornell.edu/uscode/text/15/1681b.
When you buy a car, you have to give them permission to check with the credit agencies. If you miss a loan payment, the bank can then report to the agencies they used to vet you.
There is a level of transparency. It's not perfect but it;s something. This Company is obfuscating every layer, the tenants don't even know it's going on. The biggest issue here with the obfuscation is, Who is keeping the landlords honest?
There are already associations in the US that legally track tenant and landlord issues. This company is just bypassing all the regulations involved in that and pretending it's ok.
If so, then asking for references from a previous landlord must also be illegal. It's the same private information: where you lived and whether you paid rent on time.
Yeah, but "opt out" means buggering off to go look elsewhere, where references aren't required.
Whoever ends up moving into that place must have given the reference. So it's not optional, right?
It's the same "opt out" as opting out of paying $30K for that SUV at the car dealership. Oh, and not driving out with it either; that's done by the next buyer who coughs up $30K.
If it legal to ask for a reference, it means that, in the eyes of the law, the situation would be acceptable if every landlord in the country required one. In such a case it would still optional in the sense that one can emigrate, or go sleep on some friend's or family member's sofa.
The point is that people who don't want to give the reference will do so anyway because the circumstances force them to.
Where I live (Calgary, AB) I've literally never had a landlord ask for a reference. Been renting for nearly 20 years. Simply cutting a cheque is always enough around here. My current landlord never even bothered to check if my roomate/SO actually existed when we signed the lease (she wasn't available to view the apartment, literally the only time I met my landlord).
Landlords need tenants more than tenants need landlords. At the end of the day, you can always find somewhere to live even if it's shared tenancy or crashing with friends or family, an empty apartment just costs the landlord money.
> "It seems like this is a blacklist that Naborly is hoping that landlords will help create by just informing on every single tenant, whether they've paid or not," he added. "It does not seem legal."
> Also, allowing landlords access to tenants' past paying habits meant the company in question was "acting as a credit reporting agency, without a requisite licence," he said.
> The process has also raised concerns from the Canadian Civil Liberties Association (CCLA), which noted that property managers in Canada are not allowed to publish "bad tenants" lists.
IANAL but anyone who uses that list will likely get sued for housing discrimination by opportunistic lawyers. All it takes is a sympathetic jury in a low income area with lots of protected classes and a subpoena to show them that the list is disproportionately made up of those protected classes - which it almost certainly will be because socioeconomics.
And given their general attitude of hoping to keep things secret instead of working within the law discovery would probably find quite a few incriminating emails & IMs talking about the best ways to hide their dirty laundry. They seem to have the same kind of arrogance about legal matters that's brought down literally hundreds (or possibly thousands) of startups over the decades. I'm not sure why they thought this wasn't going to turn into news, but it's a pretty common mindset.
Proving use will be damn near impossible.
Getting the list shutdown is more likely if a lawyer can prove they are acting as an unlicensed credit reporting service.
That's easy. The servers are going to record who accessed the api, what data they retrieved, and when. I wouldnt be surprised if we receive and anonymous data dump soon.
that only proves that someone looked at the list - not that they made a decision based on it... PROVING that someone based their decision on something they read on the internet is basically impossible, especially if you have even a half intelligent lawyer
Yes, though exactly why depends on the jurisdiction. In some areas a tenant blacklists is explicitly illegal; in others this would fall afoul of credit monitoring registration laws. Additionally the fact that they're using AI opens the door for a lot of issues; for example, if it turns out that their blacklist flags a disproportionately large share of African-American renters they're on the wrong side of fair housing and anti-redlining laws.
Calling this a blacklist is misleading. It's not a blacklist because it doesn't prevent anyone from extending credit to any reported person, as far as I can tell.
"The more data we have on what happens over the next few days is going to really accelerate our ability to retrain our AI systems and then help all of you accurately understand tenant risk moving forward into this new world"
AI seems to be like Javascript. It can be used for good, or it can be used for evil. And for some reason the evil uses are always out in front.
We need to fix people so they don't think this sort of thing is OK.
Evil will always pay better, until everyone is equally evil. There's an essay titled "Meditations on Moloch" which covers this topic quite well (including how you can't sufficiently fix incentives).
What ethics allow someone to think creating a "blacklist" of people who were unable to pay rent during the largest public health crisis in a century is a good idea? Five seconds of thought tells you this is just a way to target the most vulnerable among us.
Which is exactly the goal, every landlord would rather have ridiculously rich tenants, and most wouldn't give a single shit about what happened to the people who weren't.
Of course, but rich people are on to that scam already. I would wager that most of those who can afford to own a home do, simply because they don't want a landlord as a liability.
You'd lose that wager. There are many reasons why someone who could pay for a home would choose not to - e.g. maybe they do not plan to their in their current geographical area for a long enough period of time for it to be worthwhile, the cost of renting vs. owning in their area is low, they do not want to be responsible for maintenance, etc.
Edit: I now realize you said "most". You would not lose the wager.
That's just not realistic, kinda like saying that we need to fix people to not commit murder. We'll never be able to stop bad behavior, but we can dis-incentivize it by illegalizing it.
Since you mentioned Mao, I'm going to glom on here with this: what service does a landlord offer beyond four walls, a floor, and a ceiling, that's worth hundreds or thousands of dollars a month? They deal with maintenance issues, sure; occasionally, they can help mediate disputes between neighbors. But, beyond that, what justifies them getting paid simply for owning more of a thing (housing) than they can personally use? It seems like the perfect set of incentives to create hoarding and abuse, which is exactly what we see in the real world.
They offer the service of providing limited-term accommodation with no assumption of liability for regular, small payments. Contrast this to owning a house/condo, where the owner has an indefinite right to the property, but assumes liability (e.g. mortgage debt, property taxes) and/or plunks down a very large amount of cash all at once.
> what justifies them getting paid simply for owning more of a thing (housing) than they can personally use?
... Because they own it, and let others use it for a fee.
Let me just ask straight up: Do you believe that private property should not exist?
>Let me just ask straight up: Do you believe that private property should not exist?
Absolutely, that would be an ideal. However, don't make the mistake of conflating private property and personal property. A primary residence would be personal property, as would a car, etc.
As for the other "services" you mention, if the housing market weren't distorted by people thinking housing needs to be an inflating asset, most of those problems could solve themselves in a market scenario.
So if I have the cash and I want to buy a lake cottage, a hunting cabin, a second home near my kid's college, etc.--that should be illegal?
Commercial property developers should not exist, and any housing needs should be met presumably by government construction?
> if the housing market weren't distorted by people thinking housing needs to be an inflating asset, most of those problems could solve themselves in a market scenario.
I agree that overly restrictive zoning and planning regulations, IMO largely driven by owners' considerations of property values, distort the housing market by restricting new supply and inflating prices across the board.
The problem is the local government in these cases is being misused to prevent the proper functioning of the market.
The solution is not to get rid of private property--dude, it's 2020, and communism is still a failure--it's to reduce the local governments' ability to interfere with the market.
> So if I have the cash and I want to buy a lake cottage, a hunting cabin, a second home near my kid's college, etc.--that should be illegal?
Why do you need to own those things? If anything, capitalism has come around to this idea with the "sharing economy," and it works.
Do you not think those facilities can be provided for the common use of all who have a need or desire to use them? Why do you feel you should be entitled to exclusive rights to hunt that land, or enjoy the lake shoreline? More importantly, why do you feel you should be able to deny others use of that land?
Is there nothing else more useful you can think of to do with that money?
> Commercial property developers should not exist, and any housing needs should be met presumably by government construction?
That's one way to go about it. As long as builders are adequately compensated for their labor, does it matter?
> I agree that overly restrictive zoning and planning regulations, IMO largely driven by owners' considerations of property values, distort the housing market by restricting new supply and inflating prices across the board.
Explain Houston, then. The housing market in Houston still inflates at a rate higher than the general rate of inflation, and yet, there is literally no zoning there [0].
> The problem is the local government in these cases is being misused to prevent the proper functioning of the market.
Correct, because people think just because they put a lot of money into buying a house, that it should be an investment and prices should always go up. Japan provides a decent model of how to do it differently within a market framework: https://archive.is/jNx7X
> The solution is not to get rid of private property--dude, it's 2020, and communism is still a failure--it's to reduce the local governments' ability to interfere with the market.
Where and when have we had communism on a nation-state scale? Cuba arguably comes closest to the ideal, and they're doing well. China and the USSR were really more state capitalism than communism of any sort.
> Where and when have we had communism on a nation-state scale? Cuba arguably comes closest to the ideal, and they're doing well.
Sure, Cuba does well in some important metrics like education and healthcare, but overall it is still an impoverished authoritarian state. Not exactly a communist utopia.
Yes, this is why I said "comes closest to the ideal." I would argue that Cuba, relative to its neighbors, is not that impoverished, and that being under sanction from all of the world's top economic powers has put a damper on Cuba's potential. Cuba is no paradise, but they have made some significant strides.
> They offer the service of providing limited-term accommodation with no assumption of liability for regular, small payments. Contrast this to owning a house/condo, where the owner has an indefinite right to the property, but assumes liability (e.g. mortgage debt, property taxes) and/or plunks down a very large amount of cash all at once.
This presents a false dichotomy in my view. If a property is paid for, there's no emergent liability set upon the owner that isn't also set by the state (which grants them absentee property title in the first place). All of the market mechanisms that incentivize transformation, maintenance, and occupation of land can exist without recognizing absentee title as legitimate, enabling people to occupy spaces they don't own without having to pay a rentier in perpetuity.
> If a property is paid for, there's no emergent liability set upon the owner that isn't also set by the state (which grants them absentee property title in the first place).
I mostly agree here, although there is an argument that certain torts against property owners are not really "set by the state" except that they recognize that without official codification and means of redress, mob justice or personal vengeance might proliferate.
> All of the market mechanisms that incentivize transformation, maintenance, and occupation of land can exist without recognizing absentee title as legitimate, enabling people to occupy spaces they don't own without having to pay a rentier in perpetuity.
I'm not clear exactly what you're arguing here: The government could just own all land but allow anyone to build on it and occupy it indefinitely for free? Or nobody can own land they do not reside in?
There are so, so many problems here. How do you resolve disputes between rival claimants to a building? How exactly does one move to a new place-do they sell the house? So they retain ownership of the improvements, but not the land? If there is no formal ownership, how are property taxes assessed? Do they just go away? Are they based only on improvements?
If we can still own improvements, but only one per person and a person must reside on the property to own it, people will still need an improvement to live in, and they will still have to either buy one or rent one, changing nothing. If we can't own improvements we don't live in, well, who will be building new apartments and condos? You will end up with a huge market inefficiency, with lots of low-capital people with demand for housing and lots of capital owners who could theoretically supply that demand by building commercial residential property but will not because they legally cannot own and profit from any construction.
> How do you resolve disputes between rival claimants to a building?
What I am envisioning here is a world where abandoning a property grants rights to the next person to occupy it, rather than allowing the original proprietor to act as a permanent parasitic middleman between maintenance and occupants. In the case of conflict, I would imagine it would carry out similarly to how all disputes get resolved. With a state you can navigate through a legal system, and without one you have market solutions such as Coasian bargaining, social sanction, arbitration, etc. This doesn't mean that someone gets to sleep in your bed if you haven't used it since you woke up, but approaching these kinds of problems require recognizing property as the dynamic and fluid social relationship that it is. How do you deal with a family member eating your leftovers in the fridge?
> If we can't own improvements we don't live in, well, who will be building new apartments and condos? You will end up with a huge market inefficiency, with lots of low-capital people with demand for housing and lots of capital owners who could theoretically supply that demand by building commercial residential property but will not because they legally cannot own and profit from any construction.
I don't buy this. It doesn't follow that eliminating one vector for rent-seeking eliminates all incentive to satisfy demand, as there is still profit to be made from production!
I agree. Even from a capitalist point of view, there is no real free market in real estate, because it's a necessity that's simply not fungible enough. After the last brick is laid, almost every player in the game is literally just siphoning off a portion of someone's income for no good reason.
Realtors offer some value in knowing the market, but that's not worth a 3% commission on both sides of the sale, IMO. I already mentioned landlords. Property managers are essentially the same as landlords, except even more useless most of the time.
The only ones that offer anything of real value post-construction, IMO, are those that facilitate sales: title companies, banks, and realtors. Realtors are the worst of them, because they've enshrined their position in law in many states, and, as I mentioned, their commissions are simply way out of proportion with the value they provide in an age when home listings exist on the internet.
I don't want to buy a bunch of lumber, hire a bunch of guys, and wait for months every time I want to move. But somebody had to do all that relying on compensation in the future. I rent from them because it can be better for me than committing to buy permanently from them.
That’s why you pay builders. Are you trying to claim there would be a literal, physical shortage of buildings to live in if not for landlords? If so, [citation needed].
I don't have a problem with someone transforming land and subsequently renting that land to recoup the cost of materials and labor. My issue is that the state enables profits far in excess of cost by granting the original proprietor a permanent title to that land without having to occupy or use it. Outside of the threat of state violence, I see little reason why we should recognize absentee property claims as legitimate.
You need to understand that when people have problems with landlords, they do NOT have a problem with the SERVICE part of what they offer.
They have a problem of it being used as an investment, rather a job.
No one is suggesting that someone putting all the time and effort to get a building built shouldn't get paid for the time they've spent doing that. But that's where that payment stops, when they've gotten paid for the hours they spent working on that.
When housing becomes service AND monopoly, that is where the issue is. Land ownership is problematic, and profiting off of a state backed monopoly is even worse.
If by “service,” you mean the part where I pay someone else’s mortgage, then, yes, I have a problem. If you mean taking care of maintaining the property (which is what I think you’re getting at), then I don’t have a problem paying fair value for the labor involved.
I’m not even sure Smith was a capitalist in the modern sense. He held out similar derision for the merchant class, although the exact quote escapes me.
The quote most people would reference is probably this one:
People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
I've been thinking about this a lot lately, starting with the public outcry from Airbnb hosts who have had their bookings cancelled.
And then, Cheesecake Factory announced it would not pay April 1 rent on any of its locations.
The economic fallout of this situation is something we will all bear the brunt of. Landlords are not shielded from it. I'm not saying everyone should stop paying rent, but the fact of the matter is, if people and businesses are not making money for months on end, many of them will have no choice but to stop paying.
It is unconscionable that someone thought to turn this into a blacklist which many of the unlucky millions who have recently lost their jobs will end up on.
blacklist is bad yes I agree because it doesn't take situation in mind and current situation may not indicate anything about the renter in the future.
Landlords are in a slightly different boat than say the restaurant down the street. The restaurant isn't forced to provide services to anyone if they aren't getting paid, most places right now have basically blocked evictions (which is a good thing) and forcing landlords to keep people in place regardless if they get paid or not.
Many are turning this into a protest against rent and even if they have the means to pay are organizing rent strikes ... this is going to bite people in the butt this summer / fall when we are out of this mess.
My not so informed opinion is that once states of emergency are lifted if you didn't pay your rent your landlord can take you to the arbitration board in your area ... if you can prove you were out of work then you get X months to pay back your back rent (where X maybe equals 2x the number of months you missed rent) and if you can't prove you were out of work you have 30 days to pay your back rent or your out.
He is talking about the lemon problem. Landowners are as a rule completely worthless. A conscientious landowner (if such a thing existed) spends more on maintenance but cannot recover the outlays because most everyone else makes higher profits and drives him out of business. We need a revolution.
That's funny seems to me that without them we would have a LOT of homeless people. They have an asset and allow others to use it for a fee.... banks do the same thing, they have liquid capital they offer to others for a fee... would you say that banks as a rule are completely worthless?
If we are talking about a fantasy utopia where 250-300 families who don't know each other are all going to gather together and put funds together to build an apartment complex in a major city and run it like a co-op then continue to live in fantasy land because that rarely if ever is the case.
>would you say that banks as a rule are completely worthless?
OP didn't talk about banks, and I'm not sure the comparison is even valid.
As for your second paragraph. This is a possibility. Why don't we do this? That seems like a good business opportunity. Someone to organize the coop, provide startup investment, and receive a fee for x# of years afterward. Like a mortgage, but for coops, requiring coop rules and regulations for everyone involved. That seems interesting.
you mean like a condo that only exists because the contractor KNOWS it will sell all it's units, and the reason they know it is because rental companies buy in bulk.
Hmm. Yep. Exactly like a condo. For context - I live in rural America, and have virtually no concept of how condos run. After googling -
Are they really collective? Like, everyone for the greater good collective, or everyone for that one pissed off old man who wants to run the HOA collective?
And do you actually own the condo at the end, or is it just rent?
I like when I am ignorant of something! Learning!!
> That's funny seems to me that without them we would have a LOT of homeless people.
No you wouldn't because the real estate market would adjust to the lack of landlords. Current prices are the result of the current economic system. If landlords never existed, home-builders and banks would figure out a way to make sure people are paying them to have a home.
You don't have government funded housing projects (eg housing associations in your country)?
Community built housing can work well if there's the political will to make it work.
Why do you think we'd have a lot of homeless people, if people couldn't own more land individually than they needed then there wouldn't be a lack of affordable land.
My house 20 years ago was 4x my salary. As it happens I recently started the exact same job, at the same grade. The wage is better compared to the job market than it was before, the house is now 5-6 times the salary (modernised 6-8x, based on several sales in our street last year).
It is difficult, because you have to stop rich people from leveraging their power to feed their greed, which means you need politicians who don't just mindlessly do what rich people pay them for.
> That's funny seems to me that without them we would have a LOT of homeless people.
We have a LOT of homeless people. So...
Though it's true we’d have a lot more if we didn't have the small landowners (i.e., those who are homeowners but not landlords.)
It's only the larger landowners that are useless.
> They have an asset and allow others to use it for a fee....
Yes, them having the asset is a cause of homelessness. Them allowing others to use it may be a mitigation of the problem, but so would the user simply having the asset. Or the asset being held in common and allocated. Or...
>Yes, them having the asset is a cause of homelessness
you should really look into what the cause of homelessness is. generally it has a lot more to do with economic issues, addiction issues, etc than it has to do with someone else owning property.
>Or the asset being held in common and allocated.
Ya that worked out super well in the past letting the ruling class own all the land and everyone else worked it...
> generally it has a lot more to do with economic issues,
Distribution of ownership of real property is an “economic issue”, and one intimately linked to homelessness.
> Ya that worked out super well in the past letting the ruling class own all the land and everyone else worked it..
Common ownership of land is not the same thing as letting the ruling class (e.g., the nobility in feudalism or the bourgeoisie in capitalism) own all the land.
It's clear the GP meant not be landlords instead of offer property for free.
Which got me thinking: what would society look like if there were laws that limited people to owning one single dwelling at a time? What edge cases would need to be covered (I can think of married couples and corporations--so it would need to be one dwelling per taxable entity)? How would you handle hotels, travel, nomadism, etc? Would it be stable and viable?
what about the "edge case" where people don't actually want to own the place where they live? it's hard to imagine how buying/selling a property every 2-ish years would be an improvement over paying a premium to rent.
Thanks for playing along, these are some of the same issues I could think of.
I'm thinking of still having private property, just one per person/family as a dwelling, instead of allowing property as investment. You can only own your dwelling: so you couldn't own a house and rent it out while traveling in an RV.
But maybe in this new world, it just makes more sense for the government to own it all and lease it out like social housing. You would pay for a length of lease (1-year, 10 years, 30 years or more depending on how you value stability) and then pay the monthly rent.
My original thought experiment was more steady state: imagine if society had developed along those lines, how would it looked different. Adopting it from our current situation would require a transition. You'd have x years to convert to the new system, and current landlords would need to sell their portfolio. The state might be the buyer of last resort, at a low price similar to a short sale.
For people who are mobile, moving around every few months or years and renters in our current system, the idea of buying and selling property every time seems daunting, so the process would have to be much easier. I think prices would be cheaper due to increased supply, and maybe there ends up being a pool of easy-swappable properties, like rentals now (less fancy, less custom, sparsely furnished, etc.). You also have to cover the case of the move, where you essentially need both properties at the same time.
It would also impact cohabitation and marriage customs, because 2 people could have 2 properties, but married couples only one. But the idea isn't that you could somehow still have a property to rent out, it's that owning and renting out a dwelling is forbidden. There is some process of declaring your dwelling (could be an RV for example), and not being able to own property that is someone else's dwelling (I suppose commercial real-estate is still fair game). Maybe speculation on empty land (dwellings-to-be) becomes rampant as the capital is re-allocated.
In the end though, there's the problem of capital: even small apartments or homes cost more than people's annual income, so it either takes years to get your first dwelling, and where do you live in the meantime. It just seems the economy needs a way to pay for fractional dwelling use, so it's cheaper for those without capital (people who haven't accumulated it yet and people who "choose" not to accumulate). Still a fun what-if scenario, and I still wonder if there is a stable and viable solution.
It's not like owning land is free... There are mortages to pay, maintenance costs, costs to having an empty apartment sit there between renters, a cost to find renters, upgrade costs, furnishing costs if you do that, taxes, security, management, regulations, savings for a crisis (if you're a responsible landlord), etc etc. Sure landlords can make a lot of money but it's not like they're some fountain of money that won't go bust after months of no rent. Not to mention most landlords have a job anyway.
The capitalists' justification for collecting the surplus value from the renters is said to be the reward for risking their capital. If there is no risk, what purpose does the landlord serve? (beyond simple property management, which requires no ownership of capital)
In my county, renters have to show hardship to skip their rent. Then they have 90 days to pay back any missed rent once the emergency has passed, which they can extend, 30 days at a time, up to 180 days total (including the first 90) if they can still show hardship.
Additionally, you cannot be evicted for lack of payment during the emergency. After is less clear.
Eviction proceedings require 3 months notice now. That's not as good as it sounds: It was already 2 months normally.
Notice can still be given. If you miss rent on 1st April and then the grace period passes (which is not long), they can send you notice of eviction proceedings that will start in 3 months.
So you can't be removed from your rented home for 3 months, but you can lose your right to continue renting there in 3 months, caused by events happening right now.
I don't think they can evict due to lack of payment in the emergency. Which is just as well, because the notice period for non-payment eviction proceedings is quite short.
However, landlords have the right to give no-reason eviction notices to most tenants anyway (I think it's mostly tenants who've been there for > 6 months). They don't need to give a reason, they just have to feel like it.
The notice period for that is now 3 months instead of the former 2 months...
"Landlords are in a slightly different boat than say the restaurant down the street. The restaurant isn't forced to provide services to anyone if they aren't getting paid, most places right now have basically blocked evictions (which is a good thing) and forcing landlords to keep people in place regardless if they get paid or not."
Restaurants make food, landlords don't do anything.
They pay the mortgage on the property, arrange (or do themselves) upkeep on the property, collect money, etc. We can argue if that's really worth anything, but they don't do nothing.
This doesn't sound all that different from a regular credit rating.
As it relates to the financial troubles people are going through right now, while failing to pay April 1 rent is a data point, I think the uniqueness of the situation we're in will prove it not to be a particularly useful data point for landlords going forward.
Any landlord that overweights that in their decision-making around who to rent to is probably doing so to their own longterm detriment.
When there's a glut of people looking to rent, a seemingly endless supply, landlords can afford a lot of false negative rejections.
This means that trying to single out the people who were able to pay during this epidemic - by simply filtering out anyone who didn't - can be a 'winning' strategy. Or at worst, a non losing one.
In California, all mortgage companies have said they will not notify credit report agencies during this time. That makes this another example of protection for landowners with renters on their own, causing additional friction in the upward movement of poor and lower-middle class of America.
Sorry if my comment was confusing. What I was trying to say is that there are support systems in place for landowners, but not for renters. This makes it harder to breakout from being a renter to a landowner which creates a classist system. This is similar to paid higher education and possible even paid health care.
> This doesn't sound all that different from a regular credit rating.
And credit agencies need to register with the government and are subject to a bunch of laws. The consumer also needs to give consent for a credit check.
"Ries said Naborly seems to be acting as a consumer reporting agency, of which there are currently two licensed in Ontario: Equifax and TransUnion. The industry is tightly regulated due to the personal information involved."
On the other hand, if it isn't acting as a consumer reporting agency, then Naborly's operation seems like it should be strictly illegal:
"The process has also raised concerns from the Canadian Civil Liberties Association (CCLA), which noted that property managers in Canada are not allowed to publish "bad tenants" lists."
> "Any landlord that overweights that in their decision-making around who to rent to is probably doing so to their own longterm detriment."
On the other hand, as in technical hiring, it is probably better to miss 10 good tenants rather than rent to one bad one. Right?
> On the other hand, as in technical hiring, it is probably better to miss 10 good tenants rather than rent to one bad one. Right?
Sure, if there is a shortage of housing and surplus of potential tenants. But in areas where there is a surplus of housing, it might be better than fill a unit with a tenant who has a 15% chance of not being able to pay rent (but who is otherwise a good tenant) than leaving the unit vacant for a year.
> it might be better than fill a unit with a tenant who has a 15% chance of not being able to pay rent
That's nowhere near the worst-case "bad tenant". The worst-case scenario takes months to evict and leaves behind tens of thousands of dollars of property damage. There might even be some personal harassment thrown in just for good measure. Avoiding such a tenant is absolutely worth missing some opportunities to fill the property with a paying tenant.
Not that missing rent this April 1 is likely to tell you much about that particular risk.
Naborly also provides plausible deniability. From what the article says, they do not provide a detailed risk profile that a tenant might contest and correct, they provide an overall risk score. The opacity is intentional and to get around local laws. Why is this even permitted? Company top brass ought to be run out of town on a rail!
How is this unbiased? Your LRANK product looks at geographies. How can you avoid discriminating against marginalized populations in bad neighbourhoods? How are people supposed to come up in the world if you rank them based on where they're from. You got some serious white privilege with this sh*t.
I mean, they can create these lists all they want - but in the end, it's gonna be all noise. We're living in extraordinary times, and records like these do not work for their intended purpose: Singling out renters with history / patterns of delinquency.
In fact - If anything, landlords should buckle up and brace for the worst. Trying to get someone evicted right now isn't going to do sh!t. You'll spend MONTHS on the process, with probably no good replacement.
No, the best thing to do right now is to contact your tenants and bank(if they own your unit), and work out a plan that works for all parties. You're both deep in it, and there are no good ways out for the next 3-4 months, only the least terrible.
And I absolutely understand the frustration of fresh landlords that are mortgaged to their necks with their (maybe) only rental, but that's unfortunately how life is. Good times and bad times.
Not going to be noise for prospective tenants who are denied based on a missed payment, reported without context or mitigation. As usual, this is good news for the business end of the database+AI, screw you end of the stick for consumers who have no access to examine, dispute, or have deleted anything the company has collected.
Transparency again. And again. Companies need to be forced to disclose the column names in their DBs and justify publicly why they are keeping each piece of data.
I agree with the sentiment, but the obfuscation of database column names that this would cause would be catastrophic for those of us who work with databases.
It's not good news for landlords if they can't find tenants because they've all been blacklisted even though many would have been good tenants absent the current crisis. Landlords who have monthly carrying costs but no tenants will quickly get hit in the wallet. In the end, unless there is an overabundance of renters, the landlords are going to have to look past this event and look at data from before the pandemic.
The database people really ought to be working on a blacklist of abusive landlords and their properties, for tenants to avoid.
Something easily searchable and integrated into mainstream property search sites would be great.
"[ ] Hide landlords and agents with many bad reviews from verified tenants, verified history of no-fault evictions, official complaints and government sanctions."
But it won't happen as long as it's the landlords who pay for the searchable listing.
This might be what they ought to do, but what we are seeing is an entitled class who feel they have a right to fixed income irrespective of economic fundamentals.
economic fundamentals work great to describe say a restaurant.. if your not making money you can close and not serve customers thus drastically reducing your costs.
This is very different for a landlord who is required to keep providing services (often mandated by government).
So while I get what you are saying - it's not exactly an equivalent example.
> if your not making money you can close and not serve customers thus drastically reducing your costs.
The fixed costs of running a restaurant are $20-100k per month. That's why, once a restaurant has failed, you can literally buy it for nothing just by assuming the lease...
This seems like it would naturally be one data point and risk calculation service in an eventual/inevitable social credit system.
Publicly trying to create that specific aspect in isolation seems to be a big misstep, though they'd probably have a better chance with it legally in the US than Canada.
> "The more data we have on what happens over the next few days is going to really accelerate our ability to retrain our AI systems and then help all of you accurately understand tenant risk moving forward into this new world,"
This is actually dumb in terms of ML, and really dumb in terms of discrimination.
Given someone missed rent April 1st 2020, what does that tell you going forward about their future? Does it imply they're likely to miss rent again someday? Far less than the same data point any other time before. So it's not useful that way. So why get these data points about people?
Perhaps what it does imply is that they may have poor health? Or a disability? Or that they don't have a university degree? Or (data still coming as to this relationship) that they are more likely to be a specific race?
I feel that what these folks are really doing is trying to have their model learn to predict "won't pay rent" based on a data point that implies all the things they're not allowed to train their model to predict with due to obvious discrimination laws.
Edit 5 minutes later: It could be innocent stupidity too. Hanlon's razor is important.
There's value in the converse of that data point, though, right? If someone made rent on April 1st (and maybe even more importantly May 1st), that might be an even stronger signal that they'll continue to do so without interruption.
Depends on how common each is. It's a signal that puts people in the top or bottom X% of renters. If knowing someone is in the bottom 90% of renters isn't that useful, then knowing someone else is in the top 10% is, yes. If the threshold is closer to the median, then both sides are closer in usefulness to each other.
I'd be pretty surprised if making rent in April was really at the 90th percentile, though.
The UK government announced and started support for pay (income tax) as you earn employees a while before support for the self employed/contractors, so maybe the AI prefers standard salaried employment above all else.
the whole concept of predicting human behavior on very sparse and backward-looking data is problematic, not just in this one instance. even in cases where we have a ginormous amount of data (equity markets, self-driving cars) and a recognizable set of rules/heuristics does it fail to predict human behavior well enough to depend on predictive models. we're infinitely complex relative to these models. they just don't seem to have enough degrees of freedom to pin us down (yet; who knows in a thousand years).
in the case of landlords, it's tantalizing to pay a few bucks and get some comfort that you've done your due diligence, rather than facing the uncomfortable reality and esteem hit that there is no certainty predicting future behavior. and renters pay for that ignorance and moral hazard.
Landlords don't need to "predict human behavior" they only need to reduce their risk a little more than their competitors to have a slight edge in the market.
Assuming the blacklist is changed into a new variable in the risk assessment equation, a missed payment for April 1st could probably answer the question "did this person have enough saved to cover one rent check?". This assumes they didn't intentional skip rent with forgiveness in mind, to save for upcoming months without work. I can't imagine missed payments after April will be useful.
The lowest estimate I can find for percentage of Americans that live paycheck to paycheck is 49% and the highest is 80%. This just feels like a list of people who didn't get paid in March.
They're going to use black-swan events for their training data - which is complete nonsense.
Their training sets will be full of false-negatives (good renters that can't make rent. I.e, people with long history of being able to pay rent, but suddenly can't make rent b/c extraordinary events)
Hrm. Wasn't everyone saying a few years ago that "freedom to do X isn't freedom from consequences for doing X"? How is this situation any different?
If you don't pay your rent, that's fine. Plenty of jurisdictions have suspended rent payments. But that you didn't pay your rent is a true fact. You either did or you didn't. It's part of history. It's a feature of objective reality. You can't stop people from remembering true facts and talking about them. You don't make a better world by suppressing information.
> Plenty of jurisdictions have suspended rent payments.
Many jurisdictions where I am have suspended evictions for non-payment of rent, but not the rent payments themselves. Tenants are still liable for the rent and may be liable for additional interest.
In the U.S., it would probably be unconstitutional for a government to just take away all the rents from landlords.
The big problem here is that it will be hidden. If I get a tenant applying this fall, and I see on their credit report a "missed April rent" mark, I'm going to ignore it for obvious reasons.
But if I get their report, it will just say "high risk" but won't tell me why, and I'll have no way of knowing it was because of missing rent in April.
I think it would be a good rule that whenever somebody requests a report about a person that information needs to be available to the person too. Whenever somebody gets a credit report about, you get a copy. Same for background reports, credit reports and stuff like this.
And this is what people talk about when they mention the dangers of blindly trusting technology. It bakes in inequality, and no one is to blame, because it's such a complicated piece of software/hardware/code/whatever you want to blame.
How is a screening service like this that fabricates a summary instead of impartially presenting all the raw data they have not in violation of libel laws?
I’m reasonably sure this is illegal in the US (in Virginia at least.) You’re required to process rental applications in the order you receive them and can only reject them for certain reasons (failing a credit check for example.) Unless a credit company starts using this it means very little here.
If you know anyone in California who might be affected by this company please let them know to file a complaint against Naborly. They apparently have no idea what the laws here are, and they are also most likely in violation of numerous other United States credit reporting laws.
Edit: Their Privacy Policy says nothing about California, and it looks like they're most likely already in violation of California's CCPA.
Edit 2: Can't find them registered anywhere in the US as a credit reporting agency. I guess YC is now funding companies flagrantly violating US law.
Naborly are in Ontario; they are, it sounds, flagrantly violating Canadian law. A former privacy commissioner is quoted as saying that they would investigate Naborly over these allegations.
For examples of flagrantly violating US law amongst YC's prides and joy [0], consider examining DoorDash [1] or Airbnb [2].
I'm interested in checking this out myself, if you're comfortable sharing those communications would you contact me, devin at techcrunch dot com? I'd just like to see how the company approached this.
I am curious at what point all those private corporations with their never ending data gathering, scoring, etc will accomplish that exact thing done by China. China profiles their citizens, assigns them social score and the ones that do not get enough points get their rights diminished. We seem to have a lot of black lists that affect our lives. And those lists multiply and grow bigger by the day. But of course as long as we being screwed by corporations rather than the government it is all kosher.
So... is data good or is it not? I mean, I am sure each and every bank, renter, landlord, whatever has a list including those people who did not pay on April 1.
Otherwise it would be against everybody’s interests.
What is the problem here? Intent? Ah, then the burden of the proof is greater.
There's actually a TON of regulatory compliance involved with tenant screening like this in the US.
Pretty sure that they run afoul of a few provisions in the FCRA. That they claim to "keep reporting fully confidential and DO NOT notify your tenant that you have reported to our system." seems really fishy to me. If a landlord makes an adverse decision based on information in their system, the person being screened has a legal right to view that information and dispute it.
It's becoming increasingly obvious that we're assembling our own copy of China's social credit system, except it's privately-owned (and apparently YC-funded). I don't see that as an improvement in any way.
Unless you can request and dispute your data, it's absolutely illegal. I'm sure they are reaming out a loophole, but the bottom line is; A company cannot secretly gather data used for financial decisions and just not tell you about it.
And the email that was sent after the initial request for data:
>I would appreciate a moment of your time to clarify my team’s efforts to make a positive impact amidst the COVID-19 crisis.
Yesterday, I wrote an email asking landlords to provide information on April rent payments. This information was intended to allow Naborly to better support landlords and tenants and promote a mutual understanding of the severe impact the economic shutdown is having on the rental industry. Upon reflection, I recognize that the email was poorly worded and did not provide sufficient context. I am deeply sorry if it suggested that Naborly or myself were trying to do anything other than help.
Our goal at Naborly is to provide a tenant screening tool that is free from bias, and we are firm believers that housing is a human right. For tenants, we aim to remove traditional barriers to housing such as level of income, student or immigration status, or prior evictions. For landlords, we provide a screening tool that captures a tenant’s entire ability to pay rent, beyond factors such as credit history.
As part of that goal, we have always had a reporting tool that allows landlords to provide feedback, both positive and negative, on their tenants. In light of the COVID-19 crisis, this information is more important than ever. We serve over 800,000 rental units and their owners and are in a unique position to compile information on the hardships facing tenants and landlords alike. Having accurate information allows us to adapt our screening tools to ensure tenants are not unfairly viewed as intentionally delinquent on their rent obligations. Last week, we were grateful to have received survey responses from more than 5000 tenants and 700 landlords on the difficulties the COVID-19 pandemic has created for them, and were able to use that information to promote a constructive dialogue between tenants and landlords. You can read the results of our survey here.
Naborly is and will always be committed to unbiased accuracy, fairness, and equality in our risk assessment. The notion that we are trying to hurt tenants in this time of crisis is against everything we believe in as a team. I am deeply sorry that the way I expressed myself did not reflect who we are as a company and what we are trying to accomplish. It was not my intention.
Our support lines are open to all landlords and tenants to assist in navigating the government programs available to them and to answer any other questions they may have.
How is this unbiased? Your LRANK product looks at geographies. How can you avoid discriminating against marginalized populations in bad neighbourhoods? How are people supposed to come up in the world if you rank them based on where they're from. You got some serious white privilege with this sh*t.
Yelp itself is roughly like this actually, a few large apartment buildings are on there. One of the places I used to live offered us a Starbucks gift card if we wrote a positive review.
This seems to be a common thread amongst YC startups. Uber, AirBNB, Instacart, DoorDash, etc. Why do many YC companies act in such sociopathic manners?
Just because you can doesn't mean you should
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