PropTech's Digital Pipeline to Prison

After the Supreme Court’s Johnson v. Grants Pass decision, the rapid rise of technologies used by landlords may automate and transform a historic US housing crisis into a pipeline to prison, write Alec Bacon and Sean McDonald.

On January 7, the US Department of Justice announced an amended complaint in its antitrust lawsuit against a Texas company called RealPage, adding six of the nation’s largest landlords to its suit for their role in allegedly participating in algorithmic pricing schemes that harmed renters through coordinated rental increases. RealPage is just one example among a category of technology companies commonly referred to as “proptech” that aim to help landlords run their properties more efficiently and improve profits.

In the midst of one of the worst homelessness crises in US recorded history, this rapidly growing category — often called “proptech” as a shorthand for the digital transformation of real estate — is making it harder for tenants to afford, qualify for, and keep housing. Following a recent Supreme Court ruling that opens the door to criminalizing homelessness, those same technologies are not only likely to make the homeless crisis worse, but they may become a digital trapdoor to incarceration.

Proptech is already attracting the attention of a range of regulators, state attorneys general, and federal investigators. However, neither enforcement actions nor existing laws adequately equip tenants to protect their rights, let alone participate in the process of establishing new standards for digital rights and governance. The digital transformation of the landlord-tenant relationship is anything but democratic and has occurred at a time when the people who need the most protection are even more vulnerable. While proptech is, of course, not itself the cause of the US homelessness crisis, it fundamentally advances the commercial interests of landlords at a time when nearly every indicator suggests that homelessness and housing insecurity are growing.

A recent study by the National Alliance to End Homelessness reported that in 2023, 463,780 Americans were unhoused, and 154,313 were experiencing chronic homelessness — the largest numbers since detailed homelessness data began collection in 2007. Housing insecurity is also rampant: Median rental prices have increased 21 percent since 2001 (while median annual income has only risen two percent in the same period), making rent unaffordable to approximately half of current renters and leaving 83% of renters as cost-burdened. According to a recent Redfin poll, 22 percent of American renters spend their entire paycheck on housing. Today, 78 percent of all American renters are living paycheck to paycheck, meaning that millions of Americans are only one bad month away from risking homelessness — and may soon be one bad month away from incarceration.

It’s against this backdrop that proptech has grown to be used by at least 90 percent of landlords. While there are specific, functional categories of applications that fit under the proptech umbrella, the primary function of proptech technologies is to enable landlords to maximize their income from rental properties – a function that literally comes at the expense of tenants and makes housing less available to the people who need it most.

Landlord adoption and use of proptech has not only complicated nearly every aspect of the US’s affordable housing crisis, it has also caught the attention of a wide range of regulators. The cases brought against proptech firms are, importantly, not because their underlying tools and associated commercial practices aren’t working as designed or intended. Instead, governments are bringing cases against proptech companies because their products’ functions are working as designed and creating real human consequences, sometimes in ways that are allegedly illegal.

Price-Fixing Software

For housing seekers and tenants, proptech has made every step of the rental process more expensive, invasive, and unstable. One of the most common forms of proptech is price-setting technologies that give landlords recommendations about how to charge the highest possible rent the market will bear. These are tools that aggregate and analyze data using proprietary algorithms in order to push landlords to maximize the price of listed rental units. For tenants, this has meant the disappearance of millions of affordable housing options, with average rent prices 33.5% percent higher than pre-2020 prices.

While landlords have always been free to seek their best returns, price-fixing technologies not only incentivize coordinated price-setting, which some US Senators have referred to as “cartel-like,” but they also increase the likelihood of rent inflation. These tools enable landlords to exchange information and coordinate collective behavior in ways that, according to the US Department of Justice, may violate the Sherman Antitrust Act.

Perhaps the best example is RealPage’s YieldStar, which influences the pricing of 70 percent of available apartment units in the US. In its marketing materials, RealPage claims responsibility for a 14 percent year-on-year increase in property pricing — a claim substantiated by its data. Neighborhoods where YieldStar is heavily used have seen rental prices surge from five and up to 80 percent. For example, a White House analysis found that Denver apartment rentals priced with RealPage were, on average, $136 more expensive per month than those priced through traditional means. According to a class action lawsuit, YieldStar allegedly achieves these results through tactics such as recommending that landlords artificially limit the available housing supply in order to drive up prices – a regulated, anti-competitive practice under the Sherman Antitrust Act. RealPage has boasted that landlords who coordinate within their platform, instead of competing with one another, could also “eliminate concessions” like offering lower rent or one month free.

YieldStar’s intended function appears to worsen the affordable housing crisis in two ways: It encourages landlords to constantly and maximally increase pricing and to limit the supply of available housing. Not only are advocates crying foul, but governments are taking legal action following substantial investigations — the US Department of Justice, the State of Arizona, the District of Columbia, and a class of private parties are all currently litigating or have pursued antitrust cases against RealPage.

When landlords use platforms to maximally compete as a cartel, they stop acting as a “reasonable” boundary on each other. While RealPage has claimed that “a rising tide raises all ships” – these ships don’t include the tenants who must actually front the costs. The growth of price-fixing proptech fundamentally undermines the idea of housing market competition as a way to protect renters.

Tenant Screening Tech

For the lucky renters who can afford available units, tenant screening technologies have quickly become another barrier to obtaining stable housing. Whereas landlords historically only required a credit check and maybe a criminal background check, tenant screening technologies take in a much wider set of data points in order to make recommendations about which applicants landlords should accept or deny. Tenant screening systems are private, opaque rating systems compiled from a range of data sources, often without any credible verification, confirmation from the tenant, or independent oversight. These reports are provided as an information service to landlords, with provider SingleKey (formerly known as Naborly) aptly advertising themselves as “the landlord’s credit bureau.” In the case of Naborly, these data points included self-reporting among landlord contributors and targeted tenants who found themselves behind on rent during COVID-19 lockdowns. 

Tenant screening is a burgeoning industry worth more than US $1 billion, with nine out of 10 US landlords using the technology in their leasing decisions. Tenant screening technologies also allegedly contribute to discriminatory practices, like “algorithmic redlining,” in ways that negatively influence housing denials at a higher rate among minority populations and may violate the Fair Housing Act.

Not only do these approaches replicate a wide range of biases against protected groups, but they also make the landlord-tenant relationship invasive, surveillant, and maddeningly arbitrary. As with many risk-scoring systems, the typical impact of their use is to replace the more human interaction of the landlord-tenant interview process. While that process has already changed dramatically (for example, “corporate landlords,” who own 45 percent of residential rental units, often run more systematic processes), there’s little question that a process rooted in human interaction offers greater transparency and participation to individual potential renters than a score generated by an inaccessible technology.

For example, one common industry practice called “wildcard searches” uses incomplete versions of an applicant’s name (including misspellings) to cast a wider net on a tenant while searching for potential tenant misconduct, even if such searches ultimately misidentify the prospective tenant. Wildcard searches are also more likely to incorrectly identify people with common last names — and members of some minority populations are statistically less likely to have a unique last name.

Worse yet, tenant screening technologies often count prior evictions and brushes with law enforcement or eviction courts as negative factors in their evaluations, meaning that they can turn one bit of bad housing luck into an almost impossible barrier to re-entry.

Eviction Tech

Once a housing seeker successfully passes the elevated screening process, their relationship with their landlord may be subject to a third growing category of proptech: eviction technologies. Essentially, eviction technologies help landlords compile reasons to evict tenants and manage the administrative aspects of trying to evict tenants as soon as possible when there’s a good opportunity to raise rents. Historically, eviction is designed as a last-ditch legal tool for landlords to deal with problem tenants. Now, landlords are using technologies that enable them to use evictions to maximize profits, regardless of the quality of the tenant or the resulting impact on their ability to get housing.

Often, proptech systems are designed with one stated purpose, but then are used by landlords to drive eviction. Teman GateGuard, for example, is a platform that presents itself as an “AI Doorman,” to its tenant users, but the smart intercom has been advertised to landlords as a tool to surveil tenant behavior and record any possible violation of a lease, no matter how small or innocuous. Teman GateGuard’s advertising materials not only brag about creating evictions but actively push landlords to relist properties in ways that massively increase rents, limit housing supply, and violate tenant privacy.

While this form of eviction tech is focused on helping landlords sidestep traditional tenant protections, like rent-stabilized leases, other forms of eviction tech seek to sidestep procedural eviction protections. SueYa, for example, advertises that it can help landlords “terminate a California tenancy early” and claims to have successfully filed over 20,000 California evictions. Meanwhile, California has one of the highest per capita homeless rates in the United States that is only likely to grow following this year’s destructive wildfires.

Other eviction platforms that don’t aim to pre-emptively evict tenants, such as Resident Interface, automate the task of initiating the eviction process for landlords at the earliest possible date and effectively eliminate the opportunity for any tenant negotiation or consideration of available, alternative solutions. In one promotional video, a Resident Interface representative describes their eviction management ‘solution’ as “a software that’s forward-looking and into the future and way ahead of the game.” Essentially, he’s stating the quiet part out loud – evicting tenants as quickly and easily as possible is the end goal.

While various forms of eviction management platforms are actively driving evictions and homelessness, they currently aren’t breaking any laws. Yet the impact of eviction technologies is to accelerate and automate the removal of people from their homes, with less due process — almost exclusively to maximize landlords’ profit margins — amid a historic housing shortage. And the impact is bearing out: housing instability has increased massively and is only projected to grow. For context, landlords filed almost 1,115,000 eviction proceedings in 2023, 100,000 more than in 2022 and 600,000 more than in 2021 – which has disproportionately impacted minorities and women.

Critically, these factors are all coming to a head in the aftermath of the US Supreme Court’s ruling in City of Grants Pass v. Johnson. Now, criminal charges can be brought against those unable to afford, qualify for, or remain in housing.

Impact of Grants Pass

On June 28, 2024, the US Supreme Court’s City of Grants Pass v. Johnson decision gave states the power to criminalize activities that are unavoidable for the homeless — such as sleeping outdoors. While “status crimes,” aka the criminalization of one’s status rather than one’s actions, were ruled unconstitutional back in the Supreme Court’s 1962 Robinson v. California decision, the scope of its ruling was left undefined. The Supreme Court’s Grants Pass decision limited this doctrine by removing status protections for homeless activity, meaning unhoused people can be arrested, depending on state/city ordinances.

California Governor Gavin Newsom was among the first to exercise this new authority by issuing an executive order requiring state agencies to evict homeless encampments. Despite a nationwide housing crisis, publicly available alternatives like shelters and homeless services are notoriously underfunded and unable to keep up with the surge of newly unhoused people.

If someone cannot afford rent, then they risk eviction (which becomes more likely due to eviction automation technologies). This eviction will then go on their record and could disqualify them from future housing through tenant screening. If people who want homes are unable to afford available housing, have experienced homelessness in the past, or are simply unlucky enough to live in a place that could be rented out for more money if they left, there may be no other option than sleeping outside, causing these people to become transitionally homeless. If a person doesn’t have somewhere to sleep, even only transitionally, one risks violating state laws that penalize homeless activity, such as loitering, sleeping in public places, or even sleeping in one’s own vehicle.

Once homeless-related “crimes” go on a person’s criminal record, they may factor into tenant screening systems (such as SingleKey), either making it harder to find housing or preventing it outright. If affordable housing is unattainable because of screening processes, the cycle restarts, and the likelihood of chronic homelessness and incarceration grows.

Who Gets to Govern Proptech?

While trying to rein in proptech’s role in the housing crisis can feel overwhelming, there are a range of institutions, states, and organizers demonstrating how to challenge these impacts. The highest-impact approaches, so far, haven’t been especially digital — they’ve been legal. And while recent momentum has been building, initial efforts to enforce equity protections for housing seekers are highlighting the urgent need for both increased – and more creative – legal interventions brought by more people. From a public governance perspective, the people impacted by technology not only need the opportunity to exert their existing rights, they need the representation and support to establish new protections.

That’s no reason to let perfect be the enemy of good – and a number of public law enforcement institutions are taking legal action against price-fixing software based on established market competition and consumer protection laws. For example, in the DOJ suit, several state attorneys general and the legal leads of a number of cities are bringing claims alleging that RealPage’s use of pricing data and subsequent recommendations qualify as illegal collusion — which could help establish a precedent against algorithmic price coordination systems. Additionally, the DOJ and other regulators have brought similar legal action against the landlords using price-fixing software – disincentivizing their use of these algorithms. Other cities aren’t waiting for courts and are establishing ordinances that ban landlords from using anti-competitive software and algorithms to set rents.

Similarly, various US federal agencies are attempting to increase awareness about illegal tenant practices and the legal steps that people can take to enforce their rights. For instance, the Consumer Financial Protection Bureau released guidance that “wildcat searches” violate the Fair Credit Reporting Act. Additionally, the Federal Trade Commission, the Department of Justice, and the Department of Housing and Urban Development jointly issued consumer advice on “Tenant Background Checks and Your Rights.” While these legal approaches represent some promise, they also often require government action to enforce regulated activities – as opposed to meaningfully supporting the people experiencing the impacts of the housing crisis.

Governmental action also paves the way for important, private actions, like class action lawsuits. For example, private plaintiffs have brought class action lawsuits against both RealPage and Yardi, making antitrust collusion allegations similar to those brought by state entities. Similarly, the tenant screening systems SafeRent and CoreLogic have recently been the subject of class action lawsuits, alleging discrimination and unfair business practices, at least one of which resulted in a substantial settlement for the plaintiffs.

Ultimately, governmental action and class action lawsuits are important and necessary to limit proptech’s automation of the housing crisis — but they’re not enough to protect the people impacted by the housing crisis, nor are they shifting the status quo of the digital landlord-tenant relationship. Regulators and agencies are not designed to be sole enforcers of market protections and conditions; they are designed to create conditions where people can enforce their own rights. In order to accomplish that, people who are individually impacted by the housing crisis need effective representation to protect their rights through the legal system.

A Tenant Right to Counsel

There is at least one straightforward solution: Local governments should publicly support legal representation for tenants (aka a “tenant right to counsel”) as a way to mitigate the impacts of the housing crisis, create accountability for technology amplifying the affordability crisis, and restore equity in the landlord-tenant relationship.

Nationally, 83 percent of landlords have legal representation, compared to just four percent of tenants who can retain counsel. While providing tenants legal representation might sound like an overwhelming proposition, a number of cities have already tested a promising approach to impressive results. Closing that gap is not only a justice and dignity issue amid a historic housing crisis, it has also been shown to significantly increase tenants’ success in eviction cases: one Minnesota study found that representation nearly doubled the number of tenants who were able to stay in their homes. The City of Cleveland piloted public representation for tenants, resulting in 81 percent of those represented avoiding eviction or an involuntary move, 88 percent of those seeking additional time to move being able to get it, and 94 percent of those seeking to mitigate damages were able to do so. Each of those wins not only helped keep tenants housed but (as the Minnesota experience showed) also helped tenants avoid creating a digital eviction record.

Similarly, a tenant right to counsel could help address emergent legal issues resulting from natural disasters and other emergency situations. For example, California’s Penal Code Section 396 is designed to prevent price gouging during times of crisis, including rental price surges. While Los Angeles has already seen frequent landlord violations of the law in the wake of the 2025 wildfires, a tenant right to counsel could help dissuade bad actors from initiating such increases as these landlords would later expect their actions to be scrutinized by attorneys. As landlords have increasingly used eviction technologies to replace tenants with more affluent renters, such legal deterrence could help prevent additional harms in the wake of crises.

Publicly funding a tenant legal right to counsel also has financial benefits — Los Angeles County commissioned a study estimating that publicly funding a $47m tenant representation would create $370.8 million in annual savings. Those savings are based, in part, on the considerable cost of using law enforcement engagement with unhoused people, a cost that is, in the aftermath of the Grants Pass ruling, likely to grow substantially.

Not only does investing in a tenant legal right to counsel make financial sense, but it is also a significant policy intervention to address the country’s affordable housing crisis – and one of the only ways to prevent proptech from becoming a digital pipeline to prison.

Tenants’ Rights Are Digital Rights

As the number of housing-insecure and homeless individuals continues to rise, the technologies digitally transforming the landlord-tenant relationships are pushing landlords to use emerging technologies to maximize rental value, seemingly without concern for its greater impact or social costs. In effect, proptech is a digital thumb on the scales of that highly regulated relationship. It exacerbates the housing crisis by driving anti-competitive pricing practices, mainstreaming biased and unverified screening practices, and maximizing the commercial use of evictions to reduce privacy norms and accelerate evictions. While there have been various public and private attempts to rein in this trend, the market for proptech has only grown as the availability of affordable housing continues to diminish.

In the aftermath of Grants Pass, the stakes of becoming unhoused have never been higher — and the need for direct public support of tenant right to counsel has never been clearer. Criminalizing homelessness not only does not help people find housing but — with nearly 90 percent of landlords using tenant-screening systems — it also self-defeatingly prevents unhoused people from finding future housing. While public and private action are important, there is no substitute for giving people the power to protect their own rights. Ensuring public representation is not just a matter of passing new laws; it’s about making the necessary public investments for people to realize those rights in practice.

Today, as a new generation of technology platforms continuously increases landlords’ power over tenants, an unprecedented number of Americans find themselves either housing insecure or entirely without shelter. That unprecedented number of people now not only have to work against those platforms to get and keep housing, they also have to worry about it becoming an inevitable pathway to incarceration. There are extraordinarily compelling human dignity reasons to invest in a tenant right to counsel in the aftermath of Grants Pass, but initial public investments have also proven to prevent huge family upheaval, provide incredible economic returns, and measurably impact eviction practices during one of the largest-ever housing crises. While there is no substitute for more affordable housing, very few interventions are more valuable, timely, or effective – digital or analog – than public investments in a tenant right to counsel.