The Case for Ethical Practice in Residential Proptech
The State of Proptech and Housing Equity
Over the past few years, we’ve seen buzzy headlines touting the benefits of Proptech innovation, ranging from automating mortgage approvals, digitizing rent-to-own contracts, to enabling homeownership through the blockchain. Many practices in the housing space have needed innovation and digitization—but as Proptech companies introduce technology to the space, we’re seeing existing harms exposed and exacerbated.
Tenants have been wrongfully denied housing by automated tenant-screening “black boxes” have wrongfully denied housing to tenants, homeowners of color face appraisal bias, and more. We see this encoded bias creep in when everyday people are subject to invasion of privacy from surveillance technology or discriminated against in targeted housing advertisements.
We launched the Tech, Bias, and Housing Initiative a year ago to examine these potential harms and biases in Residential Proptech. Here’s what we’ve learned so far:
- Venture capital investment pressures Proptech companies to shift priorities, prioritizing maximum returns to investors over the long-term well-being of renters and potential homeowners.
- Some Residential Proptech companies capitalize on an increasingly desperate customer base squeezed by low supply and high housing prices.
- Though these products and models are frequently marketed as a way to increase efficiency and access, particularly for people of color, low-income people, and others historically excluded from housing opportunities, there is little transparency into the impact such products have for those groups, or on the market as a whole.
But there’s good news. With the right corporate practices in place, Proptech companies can become actors that help mitigate these harms, rather than worsen them.
What Proptech Companies Can Do
TechEquity has created an Ethical Practice Guide that offers a framework with actionable steps that companies can take to reduce (and even reverse) existing bias and inequity in housing. Here’s a high-level overview of the six pillars of ethical corporate practice in Proptech:
- Education: Implement a company-wide education program that highlights the history and context of housing inequity and explores the way your company fits into that story.
- Testing: Utilize a data minimization framework and discrimination testing to proactively reduce harm and measure impact.
- Employee Engagement: Provide clear, actionable pathways for employees to raise ideas, concerns, and opportunities for improvement.
- Transparency: Provide transparent and easy-to-understand information for users and customers to level the information asymmetries that exist between consumers and housing companies.
- Recourse: Provide opportunities for customers or stakeholders who feel like they’ve been harmed to voice their concerns and make avenues for their concerns to be addressed. They are, after all, a critical source of business intelligence about how your product is experienced.
- Community Engagement: Partake in the broader societal conversation about housing—and use your position to advocate for change in addressing structural inequities in housing.
Download the Proptech Ethical Practice Guide here to get concrete ideas, considerations, and actionable strategies to make your company an agent of housing equity.
America’s housing system is built on a foundation of exclusionary practices. Proptech can play a role in fixing a broken system and ensuring that all residents have housing. In order to get there, we need to understand Residential Proptech’s potential harms, enact regulatory frameworks that protect consumers, and adopt ethical corporate practices. TechEquity’s Ethical Practice Guide is a framework that helps companies avoid reinforcing and exacerbating existing bias. We want Proptech companies to be equipped to ensure your business and product efforts make a positive contribution to ending our housing crisis.
This framework is only as good as its use in the real world. In order to actualize and operationalize ethical Proptech practices, Proptech companies will need to devote significant resources and capacity to build lasting programs. We’re here to help you lay the groundwork. If you’ve started on this journey, please let us know your feedback and we’d be happy to answer any questions as you are implementing and refining these efforts. Email firstname.lastname@example.org to get started.