Protecting tenants rights in the renting era

Throughout much of the early 2000s, the housing market flourished. New construction was sprouting up everywhere, and everyone seemed to be able to acquire a mortgage. For some, this was a tremendous opportunity to purchase their first home or to upgrade to something akin to a dream home.

Of course, we know that this boom was predicated on unwise lending practices and reckless investments by large financial institutions. In 2008, the housing bubble burst and plummeted the globe into an unprecedented recession. The consequences of this prolific era were so profound that most of our attention was spent striving to return the housing market to its pre-recession health.

Now, it seems the proverbial pendulum has swung the other way. The global economy is finally humming again, but an international housing shortage has reoriented our relationship with housing and caused a significant spike in the number of people choosing to rent rather than purchase a home. This is a nuanced issue, but it’s playing out in extraordinary ways.

According to Zillow, a popular platform for prospective home buyers, “The number of homes hitting the market has been steady, but those homes that do list are selling very quickly, leaving few homes on the market at any given time — a clear sign that demand is outpacing supply.”

Housing is not an optional luxury but an essential commodity. On Maslow’s famous hierarchy of needs, it’s ranked as a first necessity alongside air, water, food, sleep, and clothing. Therefore, in the absence of viable opportunities to purchase homes, there is a surge of renters not only in expensive urban areas but also in metros and suburbs as well.

For example, although the population in the European Union has increased by more than 12 million people in the past decade, its homeownership rates have actually decreased in the past decade. Meanwhile, the percentage of renters in many E.U. nations is approaching 10% growth since just before the recession.

In a 2017 study on homeownership, the Pew Research Center discovered similar findings in the U.S. The study notes, “More U.S. households are renting than at any point in 50 years.” Moreover, the International Monetary Fund found that house prices have grown faster than rents in over half the countries in the world.

Big changes. New problems.

This movement toward rentals is creating a congested market for renters, and it’s producing a prosperous scenario for landlords. This isn’t inherently a problem. After all, market forces will do dictate what they will.

However, it does make certain issues more palpable. With markets overwhelmingly in favor of landlords and property owners, now is a critical time to nail down renters’ rights to ensure that they are treated fairly and that they are not taken advantage of.

For instance, security deposits are a frequent tension point between landlords and renters. Paid upfront to cover incidental damage or wreckage from unscrupulous behavior, this money should be returned to most renters who abide by the rules and leave their rental in decent condition. Unfortunately, there are few objective measurements for this, and it’s easy for desperate renters to fall victim to a predatory landlord.

More likely, renters won’t fall victim to malicious landlords, but they will disagree on the outcome of a dispute. Since landlords hold the security deposit, they have all the power, so renters frequently lose out.

New problems. New solutions.

The answer to this problem is not a more altruistic mindset. In this case, we can put the best available technology to work in creating a comprehensive solution that is fair for everyone. When it comes to creating verifiable records, transmitting value, and ensuring equity, there is no better technology than the blockchain.

More importantly, the blockchain allows new platforms to develop on top of its technology to produce new solutions for modern problems.

RxEAL, a startup hosted on the Ethereum blockchain, produced a platform that is solving the problem with security deposits in this competitive rental market. Using smart contracts that function as a digital escrow service, RxEAL can immediately pay a landlord or a renter with the funds from a security deposit.

Perhaps most impressively, they provide remediation services when a dispute arises. Billions are lost each year as landlords and renters take one another to court. With RxEAL, these disputes are handled by qualified experts, while eliminating the court costs and other inconveniences associated with lawsuits. This is great news for renters as they receive a fair arbiter who can make objective decisions about the fate of their security deposit.

Along the way, RxEAL’s service may solve other problems for the crypto economy, but their primary contribution to the rental market is that it can make a better experience for everyone involved.

Competitive markets can be daunting, confusing, and concerning, but the blockchain and RxEAL create a trustworthy, fair environment that is at once comforting and compelling.

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