Financialization and the Algorithmization of Tenant Discrimination in the Private Rented Sector

Abstract: This paper draws a connection between two key trends in the private rented sector: the growing presence of large-scale global “financialised” investors and the pervasive use of algorithmic methods of tenant screening. Through examining discrimination against welfare-recipients in the UK by two largely overlooked financial institutions/products– banks selling buy-to-let mortgages, and insurance companies selling rent guarantee insurance - it makes two main arguments. First, it demonstrates theoretically and empirically how the abstract, quantified and centralised nature of algorithmic forms of discrimination align with the logics of these financial institutions. Hence, as they have adopted a growing financial stake in the private rented sector, so algorithmic methods of discrimination have supplanted more judgemental methods. Second, it shows how political and legal factors have led large-scale global investors to shift away from class-based forms of algorithmic discrimination towards more complex, opaque and pernicious attribute-based forms of algorithmic discrimination. Due to the economic and political-legal factors above, we conclude that there is likely to be a bifurcation of letting practices in the private rented sector: small-scale landlords will continue to rely on judgemental methods of discrimination while large-scale global investors increasingly rely on attribute-based algorithmic methods.

About the Speaker:

Chris Foye is a Lecturer in Real Estate and Planning at the Bartlett School of Planning, University College London. His research analyses housing markets and policy from a range of disciplinary perspectives including economics, geography, sociology and political science.