Why This Apartment Association Wants a Federal Privacy Standard

The National Multifamily Housing Council (NMHC) has called for a national federal data privacy standard in response to the Federal Trade Commission’s first steps toward a data collection and security rule.

“This preliminary step toward possible regulation on data collection and security reflects an increased focus by the Administration on the impact of automated systems and data security on consumers,” NMHC had previously noted. “The FTC’s Advanced Notice of Proposed Rulemaking puts forward 95 theoretical questions on consumer privacy including harm to consumers children and the impact of algorithmic decision-making.”

Multifamily is an area that could feel effects from such regulation. Owners and operators already have access to sensitive personal data about their consumer tenants. In a push for expanded offerings and greater relevance, many proptech companies are expanding into functions that can use existing data and gather even more.

“Apartment owners and operators, as well as their service providers, rely heavily on personal data about apartment applicants, residents and employees to run their day-to-day business,” NMHC wrote in its letter to the FTC. “Therefore, we are actively engaged in issues surrounding data security and safeguarding consumer privacy. Given the sensitivity of the information that apartment operators rely on and the ever-expanding cyber threat landscape we face, our industry has placed a high priority on strengthening defenses against vulnerabilities and protecting personal data and consumer privacy.”

Concerns about protecting data have been expanding in real estate. Fannie Mae recently launched single-family social disclosures for mortgage-backed securities. “This is a significant step forward in terms of providing insights for market participants while working to protect borrower privacy, and we remain committed to continued engagement with the investor community for further developments in socially conscious investments,” Devang Doshi, Senior Vice President of Single-Family Capital Markets at Fannie Mae, has said.

But NMHC explicitly argued that Congress, not just the FTC, should be involved in the issue. “The legislative process is important and necessary, as the elected members of Congress can reflect the needs of their constituencies while creating laws that reflect compromise,” it wrote.

There are two likely aspects to this. One is that it might be easier to have a direct influence on key congressional representatives through lobbying and communications from larger business operations from their own constituencies. The other is a desire for predictability. As has been seen in a number of areas, regulatory efforts during one administration can be altered and even reversed by a subsequent one. No one in business wants to make compliance efforts only to face changing standards and expectations later on.