The Homeless-Industrial Complex

...210 days to go...

I just finished reading “There is No Place For Us: Working and Homeless in America,” a new book by New York Times journalist Brian Goldstone. The book follows five homeless families as they’re pushed into homelessness by gentrification and precarious, low-wage jobs. While set in Atlanta rather than Seattle, the experiences feel uncomfortably familiar.

What jumped out at me was Goldstone’s reporting on the infrastructure that profits from homelessness - the “homeless industrial complex.” These aren’t the nonprofits trying to help people. These are the businesses and systems that extract wealth from vulnerable families, often making it harder for them to escape homelessness.

Credit Scores: The Inescapable Trap

Many problems for the families in this book began with damage to their credit scores. In one case, a family’s rental house burned down due to arson by an ex-boyfriend. The leasing company demanded two additional months’ rent to sever the lease. When the family refused, they were evicted.

An eviction on your record makes securing new housing dramatically harder. The families were forced into extended stay hotels or moved in with friends and family. The cruel irony? Neither situation helps repair credit scores. Consistent payments at an extended stay hotel or contributing to a friend’s rent don’t get reported to credit bureaus, so there’s no path back to good credit.

Application Fees: A Tax on Poor Credit

The last time I rented an apartment was in 2015, in the midst of a crisis for my first marriage. Needless to say my mind was elsewhere so I don’t recall much about application fees, but I would have had to pay them. With a strong job at Deloitte, good credit, and no evictions, I was approved immediately and moved in that day.

In Georgia, non-refundable application fees for low-end rentals routinely run as high as $350, with no guarantee of approval. For renters with poor credit, this becomes an enormous tax. They can’t know if they’ll be approved for any particular property, so they’re forced to submit multiple applications hoping one comes through.

Washington caps application fees at the cost of a credit check. I called my old building and learned it’s $21 per adult - relatively affordable. But this protection obviously doesn’t exist in many states like Georgia.

Extended Stay Hotels: Expensive and Unprotected

Extended stay hotels become a last resort for renters who can’t secure housing elsewhere and don’t want to take their families to shelters. Despite being significantly more expensive than apartments on a per-square-foot basis, they provide none of the basic tenant protections.

For example, in Seattle extended stay guests are ineligible for the Just Cause Eviction Ordinance, which requires landlords to give tenants notice and provide at least 14 days to get current on their rent before initiating eviction proceedings. The ordinance also requires landlords to prove the eviction is being initiated for one of 16 “just cause” reasons. This prevents them from evicting a tenant in retaliation for, say, demanding the landlord remove mold or cockroaches from the property (evictions for similar reasons happened to several Atlanta families profiled in Goldstone’s book).

At an extended stay? You can be evicted for being a single day late on rent, or for almost any reason at all.

Co-Signing Companies: Increasing Costs While Narrowing Options

This was a new one to me. Companies like TheGuarantors and Rhino will cover a renter’s lease if they fail to pay, meaning that families can sometimes get keys to an apartment even if they fail to pass the application themselves.

But the service requires an additional one-time payment from the renter, typically around the size of an extra month’s security deposit. And it’s only accepted by certain landlords, often those managing higher-end properties. These services increase housing costs both directly (through fees) and indirectly (by steering renters toward more expensive properties).

Rent-to-Own Stores: Predatory Financing

Stores like Rent-A-Center target renters with poor credit, financing furniture and electronics at usurious interest rates. At the Rent-A-Center in Burien, a refrigerator listed at $1,230 would require payments of $2,049 if financed using monthly payments over 19 months - an effective interest rate of 69%!

Private Equity: Aggressive Evictions as Business Model

Private equity firms have purchased many homes and extended stay properties over the last 15 years. Unfortunately, corporate landlords are generally much more aggressive than mom-and-pop property owners in moving to evict renters who are late on payments, while also skimping on maintenance to increase profits.

PE-backed companies like Roswell Road Partners and Covenant Capital Group in Atlanta have a policy of automatically initiating eviction proceedings when tenants are even a few days late on rent. From their perspective, the threat may force payment, and they can pass court costs directly to tenants.

What This Means

These systems create a poverty trap. A single financial shock - a medical bill, a car repair, a temporary job loss - can start a cascade leading to missed rent, eviction, and damaged credit. Before long families can find themselves living in an extended stay hotel with no path back to true housing.

Meanwhile there are big profits to be had in exploiting these people. Efficiency Lodge, one of the extended stay hotels profiled in the book with 14 properties in Georgia and Florida, acknowledged in an SEC filing that housing-insecure families and individuals were a target demographic for its properties. Similarly, Greg Juceam, the Chief Executive of Extended Stay America, confessed that rapidly rising rents across the country had been a “tailwind” for his company.

In Seattle, the good news is that we have taken some concrete steps already to protect renters, including the Just Cause Eviction Ordinance discussed above as well as a 10% cap on rent increases annually, which was passed in 2025 (I personally wish this was closer to 5%, but it’s a start).

But we need to do more to protect those already well along the journey into homelessness, who may not have a tenancy to protect. It would be great to see these protections applied to extended stay residents who have lived at a property for a certain amount of time (say, 90 days or more).