DRW calls for regulation of RentTech amongst housing crisis

The real estate industry is often overlooked in conversations about data privacy and security, but it is one of the most data-invasive industries, accumulating huge amounts of personal information on homebuyers and renters. Digital technologies and automated systems are increasingly being integrated into the housing sector, with little public scrutiny.

While the integration of digital intermediaries is generally framed as a “disruption” or comes with promises of social change for the better, often it actually results in an intensification of existing problems, rather than changing them.

More than ever, renters are aware of the privacy and security risks that come with providing their personal information to digital intermediaries. And yet, in the midst of the current housing crisis and with immense power imbalances between renters, real estate agents and landlords, many renters feel no choice but to provide copious amounts of information, in whatever form they are asked.

We are urging regulators and policymakers around Australia to implement robust regulations and safeguards to better protect renters in the digital economy and to prevent RentTech from worsening the housing crisis.

Some of the risks that are created or exacerbated by the increasing and unregulated use of RentTech include:

  • Renter privacy and security. RentTech facilitates ever more collection, use and sharing of renter personal information in the real estate industry. The majority of this occurs with little to no regulation (2/3 of real estate agents are not covered by the Privacy Act), and with minimal digital security assurances. This data is rarely used in the interest of renters, and increases the risk of harm should there be a data breach.
  • Bias and unlawful discrimination. The use of machine learning and other automated decision-making systems increases the risk of bias and discrimination and can exacerbate pre-existing inequalities.
  • Regulatory evasion by design. Many platforms enable the circumvention of existing renter protections through their very design. For example, where application platforms include an editable “rental amount” field, circumventing prohibitions on soliciting rental bids.

WHAT IS ‘RENTTECH’?

‘RentTech’ is a subset of the broader ‘PropTech’ industry, that is primarily concerned with relationships and data flows between residential renters, landlords, real estate agents, property managers, and third-party intermediaries.

RentTech intervenes in almost every step of a renter’s housing experience. From searching for a property, applying for a rental, being assessed, submitting bonds and deposits, connecting utilities, paying rent, logging maintenance requests or complaints, and contacting their property manager.

Some examples include:

  • Property management platforms including digital dashboards or apps like Ailo and Simple Rent
  • Scoring systems that use machine learning, data scraping and analytics in order to automate some or part of the assessment of renter applications, such as Snug
  • Payment processing platforms like Kolmeo and Rental Rewards
  • Listing services, advertising platforms and application systems like those owned by REA Group, an
  • Novel insurance instruments that claim to smooth deposits and bonds while effectively functioning like landlords insurance, paid for by the renter, such as another product offered by Snug.

OUR ADVOCACY

Digital Rights Watch actively participates in government consultations to advocate for improved protections for renters in the digital economy. You can read our submissions in full here:

Digital Rights Watch has actively raised attention to digital rights issues in relation to renter privacy and the risks of the proliferation of RentTech in public submissions, government roundtables, and in the media.

Our Recommendations:

  1. Ensure the regulatory framework for RentTech preserves renters’ digital rights—in particular to privacy, non-discrimination and digital security. 
  2. Mandate data minimisation for landlords and real estate agents. 
  3. Ensure fee-free options, either directly or through third-party platforms, are made available and promoted to prospective and existing renters. 
  4. Ensure that renter use of third party property management or rent payment apps are strictly opt-in. 
  5. Prohibit technology designed to evade existing regulation, such as editable rental amount fields in third party application platforms which circumvent prohibitions on solicitation.
  6. Implement robust safeguards regarding the use of any third party platforms and the use of automated decision-making in the management of tenancies.
  7. Investigate public alternatives to private tenancy application processes that prioritise data minimisation and protect renters’ privacy and rights. 
  8. Investigate developing a publicly accessible database of rental information to better inform policy making and correct the informational imbalance between renters and landlords.

We also strongly recommend that the small business exemption of the Privacy Act be removed, as approximately two thirds of real estate agents are not covered by the Act, and not therefore not required to adhere to the Australian Privacy Principles.

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