Evictions have been front-page news during the pandemic. At the start of the pandemic, the National Low Income Housing Coalition estimated that without assistance, 30 to 40 million Americans would be in danger of eviction by the end of that year. It’s a heart-wrenching situation, which was largely avoided through widespread eviction moratoriums around the country.

But there is another side to the eviction crisis: Criminals actively trying to get into apartments they have no ability (nor intention) to pay for. Their modus operandi is to submit fake pay stubs and bank statements to convince landlords they have the means required to afford the rent.

One in eight paystubs or bank statements submitted to apartment owners are fake today. Fraudsters submitted more than 10 million fake financial documents last year. It is called application fraud, and experts estimate that this crime accounts for one in four of all evictions.

Snappt, a business with expertise in spotting fake financial documentation, has scanned several million pay stubs and bank statements. Based on a deep analysis of these documents, they have released their “Treacherous 20” list — the list of the top 20 major metropolitan areas by application fraud rate.

The Snappt Treacherous 20

The top 20 major metropolitan areas by application fraud rate:

1) Atlanta - 17.9%
2) Houston - 16.2%
3) Dallas/Fort Worth - 13.2%
4) Charlotte - 11.7%
5) Phoenix - 11.2%
6) Los Angeles - 10.8%
7) Tampa/St. Petersburg - 10.4%
8) Miami - 10.0%
9) St. Louis - 9.5%
10) Minneapolis/St. Paul - 9.2%
11) Chicago - 8.9%
12) Orlando - 8.5%
13) Las Vegas - 8.2%
14) Detroit - 8.0%
15) Philadelphia - 7.9%
16) Southern California Inland Empire (Riverside, Ontario) - 7.9%
17) Sacramento - 7.4%
18) Washington, DC - 6.6%
19) New York/New Jersey - 6.1%
20) Denver - 6.0%

Note that the eviction rates — which are often driven by application fraud — ran as high as one in nine for the Treacherous 20. The average eviction rate was 4.83%, nearly double the national average of 2.6%. In Atlanta, property managers are seeing fake paystubs or bank statements every fifth or sixth applicant. Houston and Dallas were not far behind.

Drivers of application fraud

There are many drivers of application fraud, but rent increases and unemployment stick out. Many of the Treacherous 20 show extreme movement along these drivers.

• Increasing rent. Higher rents make it more difficult to qualify. This in turn causes more people to turn to application fraud. Annual rent increases as high as 29.5% show up on the list (Tampa/St. Petersburg). In fact, nearly half showed double-digit rent increases in 2022.
• Unemployment. Unemployment makes it impossible to qualify for an apartment. This drives applicants to fraudulently alter bank statements and pay stubs. Unemployment rates were as high as 5.7% on the list, well above the national average of 3.8%. In fact, half of the metro areas on the list have unemployment rates at or above the national average.

A post-pandemic world

The pandemic was tough for everyone. While eviction moratoriums kept many renters safe, owners faced high losses. And, as application fraud soars, the risk to owners is getting even higher. Solutions like Snappt help protect landlords.