By Daniel Berlind, CEO of Snappt on Nov 3, 2022

It’s The Economy Stupid!

In 1992, Bill Clinton’s campaign manager James Carville uttered the infamous words “It’s the Economy, Stupid.” It was the right phrase at the right time, as the country was in a recession and the voters were ready for a change. Clinton won, becoming the 42nd president of the United States.

Thirty years later the economy is once again front and center, and it has roiled the political landscape as we quickly approach the midterms. There are seventeen congressional races that the UVA Center for Politics rate as too close to call:

  • CA-13 (Alameda, Berkeley, Oakland)
  • CA-27 (Altadena, Arcadia, South Pasadena)
  • KS-03 (Eastern Kansas City)
  • MI-08 (Rural southeast Michigan)
  • NM-02 (Rural, south of Albuquerque)
  • NV-03 (South of Las Vegas)
  • OH-13 (Area east of Akron)
  • PA-08 (Area east of Scranton)
  • VA-02 (Virginia Beach, Williamsburg, Norfolk)
  • NY-03 (North shore of Long Island)
  • TX-28 (Eastern outskirts of San Antonio
  • TX-34 (Gulf Coast between Brownsville and Corpus Christi)
  • MN-02 (South Twin Cities metro area)
  • OR-05 (Oregon's central coast through Salem, north to the southern Portland suburbs)
  • OH-01 (Western four-fifths of Cincinnati
  • NY-19 (New York's Catskills and mid-Hudson Valley regions)
  • CA-22 (San Joaquin Valley, comprising parts of Fresno and Tulare counties)

A closer examination of these districts shows economic issues have hit them hard:

  • Inflation is 1.6 times higher than the national average
  • Unemployment is double the national average

I was curious if the economic factors driving the close congressional races were having a similar effect on document fraud rates. Document fraud is where applicants for apartment rentals fraudulently alter the financial documentation (pay stubs and bank statements) that landlords require of applicants.

Snappt, the leader in document fraud detection, has scanned more than 1,500,000 financial documents to date. When we correlated these districts to our fraud records, we found a clear trend: On average, document fraud is found in 8% of cases. However, in almost all of the competitive districts, document fraud exceeded the average significantly. In Eastern Kansas City (KS-03) the fraud rate was 50% higher at 12%!

Inflation and unemployment are drivers of document fraud, so it wasn’t surprising to find this clear correlation.  But there were other factors we found in these districts that also contributed to high document fraud rates:

  • Year-over-year rent increases averaged more than 11%, making it more difficult to qualify for apartments.  In South of Las Vegas (NV-03) rents are up more than 28%!
  • Across these competitive districts, rental vacancy rates were 23% lower than the national average (4.0% versus 5.2%), making it harder to find an apartment.  In the San Joaquin Valley, comprising parts of Fresno and Tulare counties (CA-22) vacancy rates are down to 2.4%!

Our findings show that the same economic forces that are making this year rough for congressional incumbents are also making things hard for renters – driving up document fraud. I guess for both politicians and property managers we’re back to “It’s the economy, stupid!”

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