The use of automation to improve profit outcomes for large corporations is not a new phenomenon. Even before the creation of computers and cellphones, technology has been used by those in power to lessen the amount of human labor and interaction needed to extract wealth from certain communities. The 1st century brought water mills, used by Greeks and Romans to grind grain into flour. The Industrial Revolution in the 17th and 18th century brought steam engines, changing the conditions needed for the transportation of people and goods. The 20th and 21st century brought computers and robots, used for the automation of car assembly, food processing, and electrical power generation. Now, institutional investors are relying on automation to quickly raise money, with very little consideration for the tenants and potential homeowners who are harmed in the process. Through utilizing algorithms and surveillance in a similar manner to facets of the prison industrial complex, private equity-backed corporate landlords are using software to quickly purchase homes, raise rent prices, and even replace the need for human landlords all together.This is leading to massive shifts in the housing market from renting to purchasing, and is upheaving the lives of those with less money or access to techonology. As recent inventions have shown, while automation can be used to improve our daily lives, private equity can also use advances in technology to quicken the process of disenfranchisement.
An article by Vice in November of 2022 titled Robot Landlords Are Buying Up Houses profiles the ways that corporations are outsourcing property management to algorithms and apps. The article begins with the example of the journalist’s experience with Imagine Homes in Minneapolis, Pittsburgh, and several other cities.Imagine Homes is linked to Colchis Capital Management, which is an investment management firm that maintains a private equity arm. Despite not having any actual physical offices in the cities they operate, Imagine Homes uses technology to ensure that people are able to view, apply, and pay deposits for apartments without talking to an actual person. Tenants are also able to move into apartments without any form of human interaction, and rely on a passcode for entry instead of a physical key. Imagine Homes is an example of an automated landlord, a virtual landlord “using new data tools and technologies to minimize the cost of on-site employees.” A 2019 article by scholar Desiree Fields tackled the concept of automated landlords. While Fields believes that there won’t be a future where all human landlords are replaced by technology, Fields still argues that automated landlords are expanding the “capacities of landlords in ways that also reshape the realities of what it means to be a renter.” 
While the presence of a human landlord does not always mean that tenants are more protected, automated landlords are just an example of how private equity firms use automation to expand, maximizing profit returns through minimizing reliance on human beings. Tenants, potential buyers, and just other people involved with the housing system are unable to compete with the labor that computers produce. Thus, private equity firms who utilize automated landlords have more free reign to change the terrain of the housing industry.
The prevalence of automated landlords coincides with the rise of corporate landlords buying up foreclosed homes after the 2008 financial crisis.Invitation Homes and American Homes for Rent were able to quickly snatch up foreclosed homes, in areas that were previously thriving communities for people of color.While institutional investors only own three percent of the rental market, housing advocates identify them as a threat to housing justice due to their rapid expansion in a short amount of time. This, coupled with the fact that certain areas are often more targeted than others, (for example the city of Atlanta which has a high amount of Black residents) means that automated landlords can be used by corporate landlords to further their takeover of the country’s supply of single family rentals.
There are other examples of algorithmic injustice within housing. For example, RealPage is a corporation that creates algorithmic software that is used to set rent prices. The software is popular, and used across the country by landlords to justify rent hikes, even as high as 14.5%. Utilizing private information through surveilling housing applicants, RealPage software works to assist corporate landlords as they forgo the practice of negotiation through always maintaining the upper hand during dealings with tenants. RealPage softwares provides recommendations to landlords on whether to accept applicants, and provides a scapegoat for landlords as they blame their decisions on an algorithm. Many of the suggestions from RealPage software are adopted by landlords. Not only do these types of software discriminate against potential renters, they also may contribute to the overall rising costs of rentals. As explained by law professor Maurice Stucke, “machines quickly learn the only way to win is to push prices above competitive levels.” The private equity firm Thomas Bravopurchased RealPage in 2021 after admiring the company’s success in the housing market.
Powerful purchasers within the housing market also use algorithms in the form of iBuyers, which are companies or groups that use technology to instantly purchase homes. Many iBuyers then resell these homes to private equity backed companies that rent these homes as single family rentals. No human is faster than a computer at purchasing houses, which is part of the iBuyer advantage, along with the fact that many iBuyers can offer cash for the home purchases. With their speed and money, iBuyers are acquiring homes that were previously considered affordable, which is why in 2021 the city of Los Angeles explored opportunities to ban them from the city altogether. Discussions about the impact of iBuyers on the housing market have become popular in recent years, but the iBuyer market may be slowing down. According to a recent report by Redfin (a real estate corporation), investors (including those that utilize iBuyers) are buying about half as many homes as they were a year ago.
Progress Residential, which is owned by private equity firm Pretium Partners is also using similar software to purchase up to 2,000 homes per month. As the country’s largest owner of single family rentals (SFR) in the United States, Progress currently owns over 85,000 SFRs. Using technology to speed up the purchasing process, Progress is able to assess a home within just 15 minutes of it being listed on the Multiple Listing Service real estate database. Their aggressive purchasing of homes along with rent increases of up to 30%, and “eviction administration fees,” are why Senator Elizabeth Warren sent a letter to the CEO of Progress in 2022. Warren along with housing experts identify the actions of Progress, Invitation Homes, and American Homes 4 Rent as responsible for a lack of affordable housing options across the country.
Not all technology is inherently bad. For example, technological advances can improve access to improved healthcare outcomes,lengthening the human lifespan years beyond what was previously conceived of as possible. Technology can be used to democratize the sharing of previously gatekept information, and build human connection across differences in space and language. Yet when algorithms and surveillance are used to further the goals of private equity, instead of human advancement overall, it becomes increasingly difficult to rein in an already powerful industry. As this article says in regards to robot landlords, “the struggle we face isn’t about technology — of the tools we use — it is about application. It is a struggle to change relations of production.”
https://www.imagine-homes.com; https://opencorporates.com/companies/us_nv/E0305892017-6; https://www.colchiscapital.com
https://www.thomabravo.com; https://www.realpage.com/news/thoma-bravo-completes-acquisition-of-realpage/; https://www.realpage.com/news/thoma-bravo-completes-acquisition-of-realpage/