The federal lawsuit against Yale, M.I.T. and other colleges is the latest legal action to question admissions practices.
Women who were vaccinated while pregnant were at no greater risk of delivering prematurely, nor of having small babies.
Architect, author, Yale academic and City Hall official, he directed the rebuilding of the World Trade Center site and helped plan a New York City Olympics.
I never thought about ending my pregnancy. Instead, at 19, I erased the future I had imagined for myself.
You can’t control your children’s sleep. And you probably don’t have to.
Intercollegiate golf was born in 1896 when Yale thrashed Columbia with mashies and niblicks. Armed with titanium drivers, Columbia sought revenge.
A battle over academic freedom at Yale. Also: Senator Kyrsten Sinema of Arizona; hazing and assault on campus; bike chaos in New York; Messi’s goal.
For decades, researchers at Yale and elsewhere have questioned the authenticity of a map that seemed to reflect Viking travels to North America. The school now says the case is closed.
The need for markets-focused competition watchdogs and consumer-centric privacy regulators to think outside their respective ‘legal silos’ and find creative ways to work together to tackle the challenge of big tech market power was the impetus for a couple of fascinating panel discussions organized by the Centre for Economic Policy Research (CEPR), which were livestreamed yesterday but are available to view on-demand here.
The conversations brought together key regulatory leaders from Europe and the US — giving a glimpse of what the future shape of digital markets oversight might look like at a time when fresh blood has just been injected to chair the FTC so regulatory change is very much in the air (at least around tech antitrust).
CEPR’s discussion premise is that integration, not merely intersection, of competition and privacy/data protection law is needed to get a proper handle on platform giants that have, in many cases, leveraged their market power to force consumers to accept an abusive ‘fee’ of ongoing surveillance.
That fee both strips consumers of their privacy and helps tech giants perpetuate market dominance by locking out interesting new competition (which can’t get the same access to people’s data so operates at a baked in disadvantage).
A running theme in Europe for a number of years now, since a 2018 flagship update to the bloc’s data protection framework (GDPR), has been the ongoing under-enforcement around the EU’s ‘on-paper’ privacy rights — which, in certain markets, means regional competition authorities are now actively grappling with exactly how and where the issue of ‘data abuse’ fits into their antitrust legal frameworks.
The regulators assembled for CEPR’s discussion included, from the UK, the Competition and Markets Authority’s CEO Andrea Coscelli and the information commissioner, Elizabeth Denham; from Germany, the FCO’s Andreas Mundt; from France, Henri Piffaut, VP of the French competition authority; and from the EU, the European Data Protection Supervisor himself, Wojciech Wiewiórowski, who advises the EU’s executive body on data protection legislation (and is the watchdog for EU institutions’ own data use).
The UK’s CMA now sits outside the EU, of course — giving the national authority a higher profile role in global mergers & acquisition decisions (vs pre-brexit), and the chance to help shape key standards in the digital sphere via the investigations and procedures it chooses to pursue (and it has been moving very quickly on that front).
The CMA has a number of major antitrust probes open into tech giants — including looking into complaints against Apple’s App Store and others targeting Google’s plan to depreciate support for third party tracking cookies (aka the so-called ‘Privacy Sandbox’) — the latter being an investigation where the CMA has actively engaged the UK’s privacy watchdog (the ICO) to work with it.
Only last week the competition watchdog said it was minded to accept a set of legally binding commitments that Google has offered which could see a quasi ‘co-design’ process taking place, between the CMA, the ICO and Google, over the shape of the key technology infrastructure that ultimately replaces tracking cookies. So a pretty major development.
Germany’s FCO has also been very active against big tech this year — making full use of an update to the national competition law which gives it the power to take proactive inventions around large digital platforms with major competitive significance — with open procedures now against Amazon, Facebook and Google.
The Bundeskartellamt was already a pioneer in pushing to loop EU data protection rules into competition enforcement in digital markets in a strategic case against Facebook, as we’ve reported before. That closely watched (and long running) case — which targets Facebook’s ‘superprofiling’ of users, based on its ability to combine user data from multiple sources to flesh out a single high dimension per-user profile — is now headed to Europe’s top court (so likely has more years to run).
But during yesterday’s discussion Mundt confirmed that the FCO’s experience litigating that case helped shape key amendments to the national law that’s given him beefier powers to tackle big tech. (And he suggested it’ll be a lot easier to regulate tech giants going forward, using these new national powers.)
“Once we have designated a company to be of ‘paramount significance’ we can prohibit certain conduct much more easily than we could in the past,” he said. “We can prohibit, for example, that a company impedes other undertaking by data processing that is relevant for competition. We can prohibit that a use of service depends on the agreement to data collection with no choice — this is the Facebook case, indeed… When this law was negotiated in parliament parliament very much referred to the Facebook case and in a certain sense this entwinement of competition law and data protection law is written in a theory of harm in the German competition law.
“This makes a lot of sense. If we talk about dominance and if we assess that this dominance has come into place because of data collection and data possession and data processing you need a parameter in how far a company is allowed to gather the data to process it.”
“The past is also the future because this Facebook case… has always been a big case. And now it is up to the European Court of Justice to say something on that,” he added. “If everything works well we might get a very clear ruling saying… as far as the ECN [European Competition Network] is concerned how far we can integrate GDPR in assessing competition matters.
“So Facebook has always been a big case — it might get even bigger in a certain sense.”
France’s competition authority and its national privacy regulator (the CNIL), meanwhile, have also been joint working in recent years.
Including over a competition complaint against Apple’s pro-user privacy App Tracking Transparency feature (which last month the antitrust watchdog declined to block) — so there’s evidence there too of respective oversight bodies seeking to bridge legal silos in order to crack the code of how to effectively regulate tech giants whose market power, panellists agreed, is predicated on earlier failures of competition law enforcement that allowed tech platforms to buy up rivals and sew up access to user data, entrenching advantage at the expense of user privacy and locking out the possibility of future competitive challenge.
The contention is that monopoly power predicated upon data access also locks consumers into an abusive relationship with platform giants which can then, in the case of ad giants like Google and Facebook, extract huge costs (paid not in monetary fees but in user privacy) for continued access to services that have also become digital staples — amping up the ‘winner takes all’ characteristic seen in digital markets (which is obviously bad for competition too).
Yet, traditionally at least, Europe’s competition authorities and data protection regulators have been focused on separate workstreams.
The consensus from the CEPR panels was very much that that is both changing and must change if civil society is to get a grip on digital markets — and wrest control back from tech giants to that ensure consumers and competitors aren’t both left trampled into the dust by data-mining giants.
Denham said her motivation to dial up collaboration with other digital regulators was the UK government entertaining the idea of creating a one-stop-shop ‘Internet’ super regulator. “What scared the hell out of me was the policymakers the legislators floating the idea of one regulator for the Internet. I mean what does that mean?” she said. “So I think what the regulators did is we got to work, we got busy, we become creative, got our of our silos to try to tackle these companies — the likes of which we have never seen before.
“And I really think what we have done in the UK — and I’m excited if others think it will work in their jurisdictions — but I think that what really pushed us is that we needed to show policymakers and the public that we had our act together. I think consumers and citizens don’t really care if the solution they’re looking for comes from the CMA, the ICO, Ofcom… they just want somebody to have their back when it comes to protection of privacy and protection of markets.
“We’re trying to use our regulatory levers in the most creative way possible to make the digital markets work and protect fundamental rights.”
During the earlier panel, the CMA’s Simeon Thornton, a director at the authority, made some interesting remarks vis-a-vis its (ongoing) Google ‘Privacy Sandbox’ investigation — and the joint working it’s doing with the ICO on that case — asserting that “data protection and respecting users’ rights to privacy are very much at the heart of the commitments upon which we are currently consulting”.
“If we accept the commitments Google will be required to develop the proposals according to a number of criteria including impacts on privacy outcomes and compliance with data protection principles, and impacts on user experience and user control over the use of their personal data — alongside the overriding objective of the commitments which is to address our competition concerns,” he went on, adding: “We have worked closely with the ICO in seeking to understand the proposals and if we do accept the commitments then we will continue to work closely with the ICO in influencing the future development of those proposals.”
“If we accept the commitments that’s not the end of the CMA’s work — on the contrary that’s when, in many respects, the real work begins. Under the commitments the CMA will be closely involved in the development, implementation and monitoring of the proposals, including through the design of trials for example. It’s a substantial investment from the CMA and we will be dedicating the right people — including data scientists, for example, to the job,” he added. “The commitments ensure that Google addresses any concerns that the CMA has. And if outstanding concerns cannot be resolved with Google they explicitly provide for the CMA to reopen the case and — if necessary — impose any interim measures necessary to avoid harm to competition.
“So there’s no doubt this is a big undertaking. And it’s going to be challenging for the CMA, I’m sure of that. But personally I think this is the sort of approach that is required if we are really to tackle the sort of concerns we’re seeing in digital markets today.”
Thornton also said: “I think as regulators we do need to step up. We need to get involved before the harm materializes — rather than waiting after the event to stop it from materializing, rather than waiting until that harm is irrevocable… I think it’s a big move and it’s a challenging one but personally I think it’s a sign of the future direction of travel in a number of these sorts of cases.”
Also speaking during the regulatory panel session was FTC commissioner Rebecca Slaughter — a dissenter on the $5BN fine it hit Facebook with back in 2019 for violating an earlier consent order (as she argued the settlement provided no deterrent to address underlying privacy abuse, leaving Facebook free to continue exploiting users’ data) — as well as Chris D’Angelo, the chief deputy AG of the New York Attorney General, which is leading a major states antitrust case against Facebook.
Slaughter pointed out that the FTC already combines a consumer focus with attention on competition but said that historically there has been separation of divisions and investigations — and she agreed on the need for more joined-up working.
She also advocated for US regulators to get out of a pattern of ineffective enforcement in digital markets on issues like privacy and competition where companies have, historically, been given — at best — what amounts to wrist slaps that don’t address root causes of market abuse, perpetuating both consumer abuse and market failure. And be prepared to litigate more.
As regulators toughen up their stipulations they will need to be prepared for tech giants to push back — and therefore be prepared to sue instead of accepting a weak settlement.
“That is what is most galling to me that even where we take action, in our best faith good public servants working hard to take action, we keep coming back to the same questions, again and again,” she said. “Which means that the actions we are taking isn’t working. We need different action to keep us from having the same conversation again and again.”
Slaughter also argued that it’s important for regulators not to pile all the burden of avoiding data abuses on consumers themselves.
“I want to sound a note of caution around approaches that are centered around user control,” she said. “I think transparency and control are important. I think it is really problematic to put the burden on consumers to work through the markets and the use of data, figure out who has their data, how it’s being used, make decisions… I think you end up with notice fatigue; I think you end up with decision fatigue; you get very abusive manipulation of dark patterns to push people into decisions.
“So I really worry about a framework that is built at all around the idea of control as the central tenant or the way we solve the problem. I’ll keep coming back to the notion of what instead we need to be focusing on is where is the burden on the firms to limit their collection in the first instance, prohibit their sharing, prohibit abusive use of data and I think that that’s where we need to be focused from a policy perspective.
“I think there will be ongoing debates about privacy legislation in the US and while I’m actually a very strong advocate for a better federal framework with more tools that facilitate aggressive enforcement but I think if we had done it ten years ago we probably would have ended up with a notice and consent privacy law and I think that that would have not been a great outcome for consumers at the end of the day. So I think the debate and discussion has evolved in an important way. I also think we don’t have to wait for Congress to act.”
As regards more radical solutions to the problem of market-denting tech giants — such as breaking up sprawling and (self-servingly) interlocking services empires — the message from Europe’s most ‘digitally switched on’ regulators seemed to be don’t look to us for that; we are going to have to stay in our lanes.
So tl;dr — if antitrust and privacy regulators’ joint working just sums to more intelligent fiddling round the edges of digital market failure, and it’s break-ups of US tech giants that’s what’s really needed to reboot digital markets, then it’s going to be up to US agencies to wield the hammers. (Or, as Coscelli elegantly phrased it: “It’s probably more realistic for the US agencies to be in the lead in terms of structural separation if and when it’s appropriate — rather than an agency like ours [working from inside a mid-sized economy such as the UK’s].”)
The lack of any representative from the European Commission on the panel was an interesting omission in that regard — perhaps hinting at ongoing ‘structural separation’ between DG Comp and DG Justice where digital policymaking streams are concerned.
The current competition chief, Margrethe Vestager — who also heads up digital strategy for the bloc, as an EVP — has repeatedly expressed reluctance to impose radical ‘break up’ remedies on tech giants. She also recently preferred to waive through another Google digital merger (its acquisition of fitness wearable Fitbit) — agreeing to accept a number of ‘concessions’ and ignoring major mobilization by civil society (and indeed EU data protection agencies) urging her to block it.
Yet in an earlier CEPR discussion session, another panellist — Yale University’s Dina Srinivasan — pointed to the challenges of trying to regulate the behavior of companies when there are clear conflicts of interest, unless and until you impose structural separation as she said has been necessary in other markets (like financial services).
“In advertising we have an electronically traded market with exchanges and we have brokers on both sides. In a competitive market — when competition was working — you saw that those brokers were acting in the best interest of buyers and sellers. And as part of carrying out that function they were sort of protecting the data that belonged to buyers and sellers in that market, and not playing with the data in other ways — not trading on it, not doing conduct similar to insider trading or even front running,” she said, giving an example of how that changed as Google gained market power.
“So Google acquired DoubleClick, made promises to continue operating in that manner, the promises were not binding and on the record — the enforcement agencies or the agencies that cleared the merger didn’t make Google promise that they would abide by that moving forward and so as Google gained market power in that market there’s no regulatory requirement to continue to act in the best interests of your clients, so now it becomes a market power issue, and after they gain enough market power they can flip data ownership and say ‘okay, you know what before you owned this data and we weren’t allowed to do anything with it but now we’re going to use that data to for example sell our own advertising on exchanges’.
“But what we know from other markets — and from financial markets — is when you flip data ownership and you engage in conduct like that that allows the firm to now build market power in yet another market.”
The CMA’s Coscelli picked up on Srinivasan’s point — saying it was a “powerful” one, and that the challenges of policing “very complicated” situations involving conflicts of interests is something that regulators with merger control powers should be bearing in mind as they consider whether or not to green light tech acquisitions.
(Just one example of a merger in the digital space that the CMA is still scrutizing is Facebook’s acquisition of animated GIF platform Giphy. And it’s interesting to speculate whether, had brexit happened a little faster, the CMA might have stepped in to block Google’s Fitibit merger where the EU wouldn’t.)
Coscelli also flagged the issue of regulatory under-enforcement in digital markets as a key one, saying: “One of the reasons we are today where we are is partially historic under-enforcement by competition authorities on merger control — and that’s a theme that is extremely interesting and relevant to us because after the exit from the EU we now have a bigger role in merger control on global mergers. So it’s very important to us that we take the right decisions going forward.”
“Quite often we intervene in areas where there is under-enforcement by regulators in specific areas… If you think about it when you design systems where you have vertical regulators in specific sectors and horizontal regulators like us or the ICO we are more successful if the vertical regulators do their job and I’m sure they are more success if we do our job properly.
“I think we systematically underestimate… the ability of companies to work through whatever behavior or commitments or arrangement are offered to us, so I think these are very important points,” he added, signalling that a higher degree of attention is likely to be applied to tech mergers in Europe as a result of the CMA stepping out from the EU’s competition regulation umbrella.
Also speaking during the same panel, the EDPS warned that across Europe more broadly — i.e. beyond the small but engaged gathering of regulators brought together by CEPR — data protection and competition regulators are far from where they need to be on joint working, implying that the challenge of effectively regulating big tech across the EU is still a pretty Sisyphean one.
It’s true that the Commission is not sitting on hands in the face of tech giant market power.
At the end of last year it proposed a regime of ex ante regulations for so-called ‘gatekeeper’ platforms, under the Digital Markets Act. But the problem of how to effectively enforce pan-EU laws — when the various agencies involved in oversight are typically decentralized across Member States — is one key complication for the bloc. (The Commission’s answer with the DMA was to suggest putting itself in charge of overseeing gatekeepers but it remains to be seen what enforcement structure EU institutions will agree on.)
Clearly, the need for careful and coordinated joint working across multiple agencies with different legal competencies — if, indeed, that’s really what’s needed to properly address captured digital markets vs structural separation of Google’s search and adtech, for example, and Facebook’s various social products — steps up the EU’s regulatory challenge in digital markets.
“We can say that no effective competition nor protection of the rights in the digital economy can be ensured when the different regulators do not talk to each other and understand each other,” Wiewiórowski warned. “While we are still thinking about the cooperation it looks a little bit like everybody is afraid they will have to trade a little bit of its own possibility to assess.”
“If you think about the classical regulators isn’t it true that at some point we are reaching this border where we know how to work, we know how to behave, we need a little bit of help and a little bit of understanding of the other regulator’s work… What is interesting for me is there is — at the same time — the discussion about splitting of the task of the American regulators joining the ones on the European side. But even the statements of some of the commissioners in the European Union saying about the bigger role the Commission will play in the data protection and solving the enforcement problems of the GDPR show there is no clear understanding what are the differences between these fields.”
One thing is clear: Big tech’s dominance of digital markets won’t be unpicked overnight. But, on both sides of the Atlantic, there are now a bunch of theories on how to do it — and growing appetite to wade in.
A dispute centering on the celebrity professor Amy Chua exposes a culture pitting student against student, professor against professor.
Many people are putting off wedding receptions, bar mitzvahs and quinceañeras, underscoring persistent fears about the virus.
The Yale School of Medicine said the tone and content of a lecture by Dr. Aruna Khilanani, who has a private practice in New York, were “antithetical to the values of the school.”
College in a pandemic was not the experience that most students had in mind. But at year’s end, some see positive experiences and insights that came out of it.
In “America on Fire,” the historian Elizabeth Hinton offers a sweeping reconsideration of the racial unrest that shook American cities in the 1960s and 70s.
At Yale, a colleague said, he showed “there was a way to compete hard and well in financial markets, but to have our lives be about something that mattered more.”
The aftermath of the George Floyd protests and a decreased reliance on standardized tests have led to more diverse admissions at elite universities.
Even before the pandemic, many female scientists felt unsupported in their fields. Now, some are hitting a breaking point.
The psychiatrist, Bandy X. Lee, said she was let go after the lawyer Alan M. Dershowitz complained to the university. Yale said she violated ethics rules against diagnosing public figures, her lawsuit claims.
It may seem simple, but it bears repeating: sleep, gratitude and helping other people.
It may seem simple, but it bears repeating: sleep, gratitude and helping other people.
Absolution is off the table. And liberal ideals themselves are up for renegotiation.
An education program is immersing underprivileged students in Ivy League classes, and the students’ success has raised questions about how elite university gatekeepers determine college prospects.
He was most closely associated with the Yale School, which took on the foundations of literary scholarship in the 1970s and ’80s.
Kevin Jiang’s killing has attracted attention because of ties to Yale and has put a spotlight on an uptick in shootings in New Haven, Conn.
Analysis of a trove of data extracted from the Chicago Police Department has revealed major differences between how black and white officers, as well as male and female ones, actually enforce the law. This rare apples-to-apples comparison supports the idea that improving diversity in law enforcement may also improve the quality of policing.
Historically hard data from police departments has been extremely hard to come by, for a variety of reasons. As the authors put it in the paper:
Rigorous evaluation of the effects of police diversity has been stymied by a lack of sufficiently fine-grained data on officer deployment and behavior that makes it difficult or impossible to ensure that officers being compared are facing common circumstances while on duty.
…At present, a patchwork of nonstandard record-keeping and disclosure practices across roughly 18,000 U.S. police agencies has severely impeded broader policy evaluation.
This study by B.A. Ba et al., however, is based on highly detailed CPD records resulting from requests made to the department over a period of three years. It’s a collaboration between researchers from UC Irvine, the University of Pennsylvania, Princeton, and Columbia, and was published today in Science (access is free).
The records include millions of shifts and patrols from 2012 through 2015, which the team carefully sorted and pruned until it had a set that would allow the kind of analysis they hoped to do: comparing police work that is similar in all respects except the demographics of the officers doing it.
If on a Monday in March, in the same district at the same time of day, no serious differences could be found between Black officers and white officers, then race could be tentatively ruled out as a major contributor to how police do their work. On the other hand, if there were serious differences found, then that might indicate — as a topic for further study — the possibility of systemic bias of some kind.
As you might expect, the analysis found that there are indeed serious differences that, having isolated all the other variables, only correlate with the race of the officer. This may seem obvious to some and controversial to others, but the point of this work is not to assume or confirm assumptions, but to show plainly with data that there are disparities associated with race that need investigation and explanation.
Some of the specific findings can be summarized as follows:
- Minority officers (black and Hispanic, self-identified) “receive vastly different patrol assignments,” something that had to be controlled for in order to provide effective comparisons for the other findings.
- Black officers use force 35 percent less than white officers on average, with most of the difference coming from force used against black civilians.
- Black officers perform far fewer “discretionary stops” for “suspicious behavior.”
- Hispanic officers showed similar, but smaller reductions.
- Female officers use force considerably less often than male ones, again especially when it comes to black civilians.
- Much of the disparity in stops, arrests, and use of force results from differences in pursuing low-level offenses, especially in majority-black neighborhoods.
The data show (as a sort of inverse image of the above list) that white male officers stop, arrest, and use force more often, especially on people of color, and frequently as a result of minor crimes or “discretionary stops” with vague justifications.
The researchers are careful to point out that as conclusive as the patterns may appear to be, it’s important to understand that there is no causal mechanism studied or suggested. In fact they expressly point out that the data could be interpreted in two directions:
One explanation for these disparities centers on racial bias, i.e., white officers are more likely than Black officers to harass Black civilians. Technically, it is also possible that Black officers respond more leniently when observing crimes in progress.
More study is required, but they point out that one explanation — leniency by Black officers on minor offenses — has very little effect on public safety (violent crimes are addressed largely the same regardless of race and gender). The other — systemic racism — is significantly more harmful. Though they are “observationally equivalent” in the context of this data specifically, they are not equivalent in consequence. (Nor in likelihood — nor are they entirely incompatible with each other.)
In a valuable commentary on the paper and its implications, Yale’s Philip Atiba Goff notes that its findings are rich in implications that we ignore at our peril:
The magnitude of the differences provides strong evidence that — at least in some cities — the number of officers who identify with vulnerable groups can matter quite a bit in predicting police behavior. Although this does not settle the matter, the work stands alone in its ability to make apples-to-apples comparisons across officers – regardless of how many may be bad apples.
Given that Ba et al. find negligible demographic differences in officers’ responses to community violence, such a large difference in discretionary stops compels a reader to ask: Are any of those excess stops by white officers necessary? Should a department even be making them, given the demonstrated risk for abuse so evident in vulnerable communities?
Are any of those excess use of force incidents by white officers necessary? And if the excess force is not necessary for public safety, why does the department target Black communities for so much physical coercion? These questions are difficult to answer outside a broader engagement with the purpose of policing — and its limitations.
In other words, while it may require further study to get at the core of these issues, police departments may look at them and find that their resources are not necessarily being used to best effect. Indeed they may have to face the possibility — if only to refute it — that much of what officers do has little, no, or even negative value to the community. As Goff concludes:
With violence trending downward the past three decades, mostly troubling small geographic areas, and possibly occupying a small portion of police activity, what should the role of police be? Failing to take seriously the possibility that the answer should be “much less” may end up frustrating both researchers and a public that has been asking the question for far longer than most scientists.
This revealing study was only possible because the authors and legal authorities in Chicago compelled the police there to release this data. As noted above it can be difficult, if it is even possible, to collect large-scale data from any department, let alone from many departments for analysis at a national scale. The authors freely admit that their findings, in their specificity to Chicago, may not apply equally in other cities.
But that’s meant to be a call to action; if when finally given access to real data, researchers find problems of this magnitude, every department in the country should be weighing the benefits and risks of continued obfuscation with those of openness and collaboration.
The Trump administration had claimed that the school’s practices hurt white and Asian-American applicants, violating the Civil Rights Act of 1964.
Appointed head of the incoming administration’s task force on health equity, the Yale University scientist “is not sitting in her ivory tower.”
As a scholar and a federal appellate judge, he changed the shape of laws on campaign finance and corporate governance.
The department says the school’s admissions practices violated the Civil Rights Act of 1964. Yale’s president says the allegation was based on “inaccurate statistics and unfounded conclusions.”
Women produce a more powerful immune response than do men, a new study finds.
Jed Rubenfeld, a high-profile professor who helped students obtain sought-after clerkships, denied he had harassed anyone.
The United States is currently in the middle of an affordable housing crisis that’s putting the nation’s most economically insecure citizens at risk of becoming homeless even as a pandemic continues to spread across the country.
But one Atlanta startup called PadSplit is using the same model that Airbnb created (which ultimately drove up rental and housing prices across the country) to bring down costs for subsidized housing and provide relief for some of the people most at risk.
America’s second housing crisis
Twelve years after the last housing crisis in the United States caused a global economic meltdown, the U.S. is once again on the brink of another real estate-related economic disaster.
This time, it’s not speculators and investors that will carry the weight of the coming collapse, but low income renters faced with still sky-high housing costs and no income thanks to historic unemployment caused by the nation’s COVID-19 epidemic, as Vox reported.
Before COVID-19 swept across the world, half of U.S. renters were spending roughly 30 percent of their income on apartments and homes. One fifth of the population actually spent over half of their income on rent, and now, with roughly 10 percent of the country unemployed, that population faces eviction and the prospect of homelessness.
To solve the problem of housing insecurity, PadSplit borrows a page from the Airbnb playbook by creating a marketplace where homeowners can list rooms for rent for long-term stays.
Each room comes furnished with wifi and includes access to laundry facilities. And the company provides access to free telemedicine services and reports weekly payments to credit agencies so renters can build their credit scores.
Currently, the company manages 1,000 units in the Atlanta area and has expanded its presence into Maryland. The company’s renters include teachers, grocery store employees, restaurant workers — all people whose services are considered essential during the COVID-19 epidemic. “40 percent of our population has been functionally homeless,” said company founder, Atticus LeBlanc. “The average income [for our renters] is $25,000 per year.”
The average age of an occupant in a PadSplit room is 39, but renters have been as young as 19 or as old as 77, according to the company.
A quick scan of PadSplit rates in the Atlanta area shows rents of roughly $140 to $250 per week for rooms in existing homes. “We are focused on longer term stays for lower income,” said LeBlanc.
The company screens tenants and landlords, including criminal background checks and employment verification. “We sit between a hotel provider and a longer term apartment,” said Leblanc. “Where we need to both be an immediate housing provider for people who are in difficult situations while also underwriting that [person].” Owners looking to rent on PadSplit also need to prove that they haven’t been convicted of a felony within the last seven years.
LeBlanc, a New Orleans native turned Atlanta entrepreneur was named for Atticus Finch, the fictional lawyer whose fight for social justice in “To Kill A Mockingbird” is a staple of schoolroom lit assignments, and a model for white liberal southern gentry.
“My mother… said she wanted to give me someone to live up to,” says LeBlanc.
With a degree in architecture from Yale University, LeBlanc has run a real estate development and construction business in Atlanta for over 12 years. He launched PadSplit in 2017, after writing up the idea for the business in response to a competition from the Atlanta housing non-profit, House ATL and the non-profit Enterprise Community Partners.
LeBlanc’s plan was selected as one of the finalists and he received a small grant from the organization and the JPMorgan Chase foundation to pursue the business.
With the help of John O’Bryan, a serial entrepreneur who had built businesses in the vacation rental industry, LeBlanc built up the marketplace that would become PadSplit, starting first in Atlanta and moving out to surrounding suburbs and into Maryland. LeBlanc later brought in Frank Furman, a Naval Academy graduate, US Marine Corps veteran and former McKinsey consultant to help grow the business.
Now, the company, a Techstars accelerator graduate, has $10 million in new financing from Core Innovation Capital, Alate Partners, the Citi Impact Fund, Kapor Capital, Impact Engine and Cox Enterprises to expand PadSplit into Texas, starting with Houston and quickly ramp up hiring.
“PadSplit provides a truly unique solution to a complicated national problem that’s becoming more dire each day,” said Arjan Schütte, Founder and Managing Partner of Core Innovation Capital, in a statement. “We’re proud to support Atticus and the PadSplit team as they expand into new markets and introduce critical housing supply at a time when so many require affordable housing.”
Making money in affordable housing
According to LeBlanc, affordable housing is built around two things. One is the subsidy owners receive from the federal government and the second is a percentage of the cost of rentals. To convince owners that being in the affordable housing market was a good idea, LeBlanc just proved to them that they could get higher risk-adjusted returns versus other long-term rentals.
So far, that’s been proven out, he says. Through its model of fixed costs and weekly rent payments, PadSplit occupants have been able to save roughly $516 per month, according to data supplied by the company. Lowering rent has also allowed tenants to build credit, move into their own apartments and bought vehicles — or even, in some cases, houses of their own.
The company estimates it has also saved taxpayers over $203 million in subsidies by eliminating the the need to build subsidized housing units. Property owners have also benefited, the company said, increasing revenues on properties by over 60 percent.
And LeBlanc isn’t just the founder of PadSplit, he’s also a customer. “I rent a room downstairs in my personal home,” he said.
Ultimately, LeBlanc sees housing stability and a path to home ownership as one of the key tenets of economic equality in the United States.
“Every zoning law in America was based on a system that had no racial equity. We’re still battling those vestiges that exist in almost every jurisdiction,” he says.
And for LeBlanc the problem goes back to nearly 100 years. “If you acknowledge that racial inequality led to income stratification where it was impossible for returning Black GIs to get access to the same wealth building opportunities that white returning GIs had.. it’s no surprise that you have lower incomes by a substantial margin for African Americans as you do for whites.”
LeBlanc sees his business providing an additional revenue stream for the owners who rent properties, and an on-ramp to the financial system for people who are at risk or historically disenfranchised.
“We wanted to create a value proposition that is valuable to anyone in the housing space,” said LeBlanc.
The Trump administration’s charge that the university discriminates against Asian-American applicants was disputed by many Asian-American students and others.
The department’s civil rights division accused the university of violating the Civil Rights Act by discriminating against Asian-American and white applicants.
To provide some semblance of the campus experience during a pandemic, colleges say large chunks of the student body will have to stay away and study remotely for all or part of the year.
The debts our institutions owe to the problematic past can’t just be canceled.
As riders prepare to start riding the trains again during New York City’s initial reopening, the safety of public transit is a big question.
Researchers thought Covid-19 might displace climate change as a threat in the American mind. It hasn’t, according to a new survey.
Saliva tests like the one developed by Rutgers are less painful for patients and less risky to medical workers.
Craig McFarland, the valedictorian of his high school in Jacksonville, Fla., received acceptance letters from 17 colleges and universities in all.