A new survey of rental housing providers by the National Multifamily Housing Council (NMHC) has found increasing fraud activity, which is contributing to both the growth in rents and number of evictions.
In the past 12 months, 93.3% of respondents reported experiencing fraud and 70.7% cited an increase in fraudulent activity.
According to the NMHC, the rise in false rental housing applications is driven in part by social media platforms and is exacerbating rental costs, fueling affordability challenges, and undermining the credibility of eviction data.
One notable finding is nearly one-quarter, 23.8%, of eviction filings stemmed from fraudulent applications and the subsequent failure to pay rent over the past three years. Almost half, 47.2%, of respondents said this share varies by jurisdiction, with many calling out Atlanta and markets in Florida and Texas where increases have been most concentrated.
In addition, according to the NMHC, 58.5% of respondents noted they experienced an increase in nonpayment of rent due to fraud in the past 12 months.
“There has been anecdotal evidence of the rise of fraudulent activity over recent years, but now we have clear evidence of the staggering impact of these crimes on the rental housing market,” said NMHC president Sharon Wilson Géno. “While most renters are honest, those who are not are causing the cost of rental housing to increase for everyone.”
The NMHC has called on lawmakers and courts to take action to address the problem. “Additional delays in many jurisdictions in the lease enforcement process, even when there is clear fraud, incentivizes bad actors and means that this illegal behavior costs responsible renters even more,” she said.
The survey was conducted between Nov. 15 and Jan. 9 and received responses from NMHC and National Apartment Association members representing 75 leading owners, developers, and managers. Key findings from those respondents who experienced fraud include:
- 84.3% reported seeing applicants falsifying or fabricating pay stubs, employment references, or other income documentation;
- 80% said they observed prospective renters misrepresenting information on applications;
- 70% reported identity theft, fraudulent ID documents, or the use of someone else’s information;
- 67.1% cited unauthorized cohabitants, illegal subletting, or other actions to evade the leasing and application process; and
- 62.9% reported the use of fraudulent checks or other payment methods.