AI Is Changing Tenant Screening for Better Or for Worse

• Give some credit: New AI tools are helping property managers screen prospective renters but handing over tenant screening to a robot doesn’t come without risks.

• Save it for the bedroom: AvalonBay is being sued for advertising that certain rooms are bedrooms even though they lack windows.

• Cold heat pumps: Carrier has become the first company to produce a heat pump unit that passes the DOE’s Cold Climate Heat Pump Challenge.

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Multifamily

AI Is Changing Tenant Screening for Better Or for Worse

In the evolving landscape of rental housing, traditional credit scores are proving inadequate in assessing the financial reliability of many prospective tenants. A significant portion of the population, including 28 million credit-invisible and 21 million unscorable adults in the U.S., often face barriers in securing housing due to these outdated metrics. This issue disproportionately affects younger renters, freelancers, and those in non-traditional employment, who may not have conventional credit histories but demonstrate financial responsibility through alternative means.

Innovative solutions are emerging to address these challenges. Companies like Snappt are leveraging AI-powered platforms to provide a more comprehensive evaluation of applicants. By analyzing a range of financial behaviors—such as on-time rent payments, bank account stability, and consistent cash flow—these tools offer a nuanced understanding of a tenant's reliability. This approach not only enhances the accuracy of tenant assessments but also promotes inclusivity by considering a broader spectrum of financial data.

Despite the benefits, the integration of AI in tenant screening is not without its complexities. While these technologies can reduce fraud and streamline the leasing process, they also raise concerns regarding algorithmic bias and data privacy. Ensuring transparency and human oversight in AI-driven decisions is crucial to prevent the perpetuation of existing inequities. As the rental market continues to evolve, embracing innovative screening methods—while maintaining ethical standards—will be key to fostering a fair and accessible housing environment for all.

Overheard

AvalonBay In Legal Trouble Over Windowless Bedrooms

A lawsuit was filed against the housing REIT AvalonBay Communities that claims that the company for advertising bedrooms that don't have windows. D.C. housing code requires that a bedroom must have a window or at least frosted glass that lets in natural light.

Calling a room a bedroom even though it does not have a window is not against the law when it comes to advertising to traditional renters. But when it comes to renting to tenants with housing vouchers, the local housing authority has rules for what can be legally called a bedroom. AvalonBay is also being accused of discrimination for allegedly actively encouraging voucher holders not to apply to lease the property in question.

No judgment has been issued by the court yet, but if the plaintiffs win it would likely force the AvalonBay to change the way it advertises. There could also be punitive damages associated with the judgment, which would serve as a deterrent to other landlords from engaging in similar advertising.

Carrier Sets Cold-Climate Record Ahead of Refrigerant Bans

Carrier has become one of the first manufacturers to complete the U.S. Department of Energy’s Cold Climate Heat Pump Challenge, demonstrating a system capable of maintaining full heating capacity at 0°F and operating in temperatures as low as -23°F. The new model is now the top-rated DOE cold climate heat pump, establishing a new benchmark for residential and light commercial performance.

Launched in 2021, the federal initiative was designed to accelerate the development of electric, centrally ducted residential heat pumps that can perform reliably in colder regions. Carrier is one of four companies, alongside Lennox, Bosch, and Trane, that plan to bring challenge-compliant products to market by the end of this year. Others, including Daikin and Rheem, are expected to commercialize their models in the coming year.

Executives from Carrier and Lennox said the advanced technologies developed for residential cold-climate heat pumps will soon be scaled up for commercial use, with plans to integrate them into rooftop units as part of the DOE’s ongoing Commercial Building Heat Pump Accelerator program.

Carrier’s unit also utilizes low green house gas refrigerants, R-32 and R-454B. These technologies are becoming increasingly necessary as new federal rules phase out higher global warming potential alternatives ahead of 2026, with additional mandates pending in states such as California and New York.

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