Promised reform of third-party rental apps stalls as renters navigate 'brutal' market
After years of experience in Melbourne's highly competitive rental market, Indy is familiar with jumping through hoops to secure a home.
But a recent encounter with a third-party app she had to use to apply for a rental property took her by surprise.
Despite her having already entered information including "years and years of previous addresses", pay slips, and details from documents such as her passport and Medicare card to meet identification requirements, the app popped up with two paid options for more intensive "background checks".
"I've been renting for years and I hadn't come across this before," she said.
"There are two different levels and you can pay extra.
"It sort of explicitly says that it will speed up processing, that you'll be bumped ahead in the queue for this rental if you do that, if you pay them 30 bucks."
Indy did not pay the extra fee and missed out on the property.
She said although she had some reservations about the risk of having all her personal data "clustered together" on apps used by real estate agents to manage applications, there was also an element of convenience.
"I do quite enjoy how a lot of the agencies all use the same app, so if you've done one application, you've done them all," she said.
"It is already such a time-consuming process trying to find a place so it is a bit easier having it all on the one site."
The use of such third-party platforms by real estate agents to manage rental applications is already firmly embedded in Australia's rental market, but some people are concerned regulation around issues such as data management, fees and potential discrimination in the apps is falling behind.
University of Technology, Sydney, researcher Linda Przhedetsky, whose work focuses on rental application technologies in Australia, said in some cases, the apps were exacerbating existing problems in the rental market.
"We're seeing these apps ask for consumers to pay, with the cost being money or data, just to apply for a property," she said.
"We're seeing people being charged multiple costs, we're seeing people being charged multiple times for background checks across different services, and not everyone can afford to pay this.
"We're also seeing people feel deeply uncomfortable by the amount of data that's collected about them, and there are some major concerns about how that data is used.
"The way that these apps work is very opaque. We don't know what safeguards there are in place to prevent people from being discriminated against or being treated unfairly."
She said regulations needed to be updated to protect renters.
"Our regulatory framework needs to be updated so that we can prevent harm from occurring as a result of these technologies," she said.
Ms Przhedetsky also said people should be able to opt out of using the apps without it affecting how their application was considered.
Australian technology companies that process rental applications for the real estate industry appear to be pulling back their platforms, as consumer backlash grows about the fledgling industry's allegedly "opaque" practices.
A survey of more than 1,000 renters, conducted by consumer advocacy group CHOICE and released earlier this year, showed 41 per cent felt pressured to use a third-party app by their real estate agent or landlord.
Ms Przhedetsky said it was very concerning people were being asked to pay extra for background checks through the apps — like in Indy's case — particularly because such checks can be obtained for free online.
As part of her research, Ms Przhedetsky keeps track of overseas trends, and she said in countries such as the US, rental apps had taken a turn not yet seen in the Australian market.
"In overseas markets where these technologies are more established and more invasive, we're seeing these apps claim to predict things like someone's eviction potential, and rate their levels of honesty," she said.
"If we want to make sure that these kinds of apps aren't going to be in the Australian market, we really need to act now, and introduce regulation that prevents anything like this from happening here."
In Victoria, the way renters' privacy and data is managed by agents was recently addressed both in sweeping housing sector reforms dubbed the Housing Statement, and in the results of a parliamentary inquiry examining the state's rental and housing affordability crisis.
The Victorian government's Housing Statement, released in September, promised to "standardise rental applications, saving renters time and giving them a clear idea of what they can expect to be asked for during the application process".
"We'll also limit the kind of information agents or landlords can keep on file, and how long they can keep it for, better protecting renters' privacy and data," it read.
The inquiry report, tabled in parliament this week, found that "the lack of a standard rental application process has resulted in disparate practices from real estate agencies and third‑party RentTech platforms".
"For some renters this has meant the over-collection of personal information, risking their privacy and data security," it said.
It recommended the Victorian government "urgently implement" its promised reforms in this area.
But when asked when such changes would be introduced to parliament, a government spokesperson said it was "working on all aspects of the Housing Statement, including multiple actions to support renters, and will have more to say in due course".
Despite actively searching and applying for rental properties with a friend for more than three months, Indy has had no luck so far.
"It's not going to be news to anyone, but it's a brutal market out there," she said.
"I had a really ambitious plan to get into a place before Christmas.
"I'm losing hope rapidly … hopefully in January," she said.
In the meantime, Indy is luckily able to keep living in her current share house.
She said knowing that rents kept increasing and it had become the norm for prospective tenants to bid above the advertised rental fee in an attempt to secure a place had left her feeling "powerless".
"It just makes me so angry," she said.
"They just raise the rents willy-nilly every single year as a rule.
"I don't know anyone who hasn't had their rent rise in the past year."
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