Trust and the Future of Multifamily Fraud

Declining social trust has created a multifamily fraud arms race. Are private renter networks the future?

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If you ask multifamily operators about their problems, it won’t take too long for the topic of fraud to come up. Almost 80% of multifamily owners reported an increase in fraud over the past 12 months. From fake pay stubs to stolen or fake identities, fraud is increasingly costing owners in a big way. While new anti-fraud solutions have arisen, parallel advances in AI have led to an arms race between fraudsters and technology providers.

But multifamily fraud cannot be properly understood outside the context of broader trends in American society: specifically, the same declining social trust that has led to widespread antisocial behavior and disorder. And to understand where fraud is headed, we’ll need to look across other symptoms of—and solutions to—declining social trust.

It’s in that frame we’ll analyze a new company, 100, which is deploying the most radical anti-fraud solution yet. Led by veteran proptech entrepreneur Caren Maio, 100 looks to create a private, pre-vetted renter network akin to TSA Pre. In fact, they’ve partnered with CLEAR, the identity verification company familiar to anyone who has stood in an airport security line, to make it happen.

Today’s letter will tackle:

• The growing epidemic of multifamily fraud;

• Social and political drivers of growing fraud;

• The multifamily fraud arms race;

• Declining social trust;

• Privatization, whitelists, and the future of multifamily fraud and its prevention;

• What it all means for the real estate industry.