“I never honestly thought that I would be renting again in this country at this point, you know, with all the statistics and rising housing costs, whether you’re a renter or you have a mortgage,” Daniels said. “I honestly never thought it would be possible again.… I’ve been so content living the way that I was living, because I built that life.”
One of the most persistent wealth gaps in the United States is between renters and homeowners, and the gap is bigger than ever. The average renter has a net worth of just $10,400, versus $400,000 for the average homeowner, according to a 2024 Aspen Institute report. On top of that, almost half of renters struggle to pay their rent, which makes it even harder to save money for a house. Rent is a burden, and it’s always rising. Homeownership, in addition to building wealth, stabilizes housing costs and allows people to save in other ways, like investing in retirement accounts.
Renter-equity programs are rare, and only beginning to take shape. Colorado’s program is the first government-run program in the country that lets renters share in their building’s equity. But is it just another way for investors to make money in a broken system?
Daniels opened checking and savings accounts, and $20 was immediately deposited as an incentive. When she pays her rent, $1,766 a month, she gets 2 percent cash back deposited into the account, and if she leaves it there for 12 months it will be matched too. Over time, she could potentially share in some of the value of her appreciating townhome, as well.
“We started offering cash back for paying rent,” said Rowland Hobbs, Stake’s co-founder and CEO. “It was the first time that landlords were offering a positive incentive for paying rent, rather than just—I’m going to put it bluntly—carrying a stick, you know, and being like, ‘We’re just going to evict you if you don’t pay,’ because of that unique moment in time.”
Stake wants the idea to spread through the private market, but the idea has so far mostly taken among affordable housing nonprofits. In 2013, Enterprise Community Partners, which funds, builds, and runs nonprofit housing around the country, started a Real Estate Equity Program that raised capital from investors and banks looking for social responsibility investments. Enterprise used the money to purchase aging affordable housing communities and reinvest in them, keeping them affordable.
To try to do that, they launched the Renter Wealth Creation Fund, also partnered with Stake, in 2022. “There’s a role for profit sharing in rental housing that we think is worth demonstrating, not just because we think it will be good for the residents themselves,” he said, “but also because … you can align interest with residents in a way that generates even more stable communities and better returns for investors.”
Daniels, in Colorado, says the savings already make a difference for her. “It may not be a ton of money, but it’s a start in the right direction for renters,” she said. “It’s a start to something I think that, across the country, could be really helpful and supportive to renters out there.” Her on-time payments are also reported to credit agencies, raising her credit score.
Tara Raghuveer, the director of the Tenant Union Federation, said her organization has heard from tenants across the country suspicious about their landlords wanting them to sign up for a renter rewards program, which some tenants suspect is just another way to track them with data. “These [financial technology] companies make their money almost identically to other credit card rewards programs through the side fees, late fees,” she said. “The rent rewards scheme right now seems to be just a way to get people to sign up for the cards. And I think there’s a lot to be concerned about on that front, mostly related to data collection and privacy and the kind of information that we’re then handing over to our landlords and their vendor partners when tenants are compelled to sign up for these endeavors.”
At base, though, Raghuveer’s larger point is that these are still moneymaking schemes, designed to serve investors and not tenants. “In the context of the housing market writ large, which is the Wild West, there’s basically no regulation, especially no regulation protecting tenants,” she said. “In that context, there is abundant opportunity for the most exploitative market actors to invent all sorts of moneymaking schemes.”
As long as renter-equity programs rely on making money for private start-ups and providing incentives for investors, they will never make a truly meaningful difference for renters—let alone reform a broken and unequal housing system. And even well-intentioned state government efforts will necessarily be limited in scope, not to mention vulnerable to political interference: Colorado’s nascent program is already vulnerable to budget cuts.
“It’s still very hard to turn a cash-back benefit on your rent every month into a source of sustainable, growing wealth,” said Katherine Lucas McKay, associate director of the Financial Security Program at the Aspen Institute. “So of course, it’s good if a business can find a way to make money by helping renters.… It just doesn’t compare with the returns on property ownership, or the returns on market investing.”
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