AI's Housing Mirage Traps Renters

Virtual staging may effortlessly fit a six-seater dining table into a studio apartment, a feat physically impossible for actual tenants.

Joyce, a lifelong New Yorker, anticipated challenges in securing her first solo apartment in the city, but she didn't expect the process to be "hell." After enduring numerous viewings of tiny, overpriced properties she candidly labeled "shitholes," Joyce believed she had discovered her ideal living space: a reasonably priced studio in Manhattan.

"It was big and airy, and there was a fireplace," she recalled. The kitchen, though compact, appeared well-equipped and recently renovated. Eager to see it, she immediately scheduled a viewing, only to discover upon arrival that five other women, all roughly her age, had appointments following hers.

"I get in, and it's not the same apartment at all," she recounted. The space was considerably smaller than depicted online. Key features were altered: the kitchen sink was different, the stove lacked several knobs, and the promised fireplace was absent. "There's the idea of the apartment that we saw in the pictures," she observed, "and then there was the apartment itself." She added, "My friend said we should've known it was AI because there was a plant on the gas stove in the picture."

New York City real estate brokers have long possessed a talent for presenting even dilapidated apartments favorably in photographs. However, generative AI now empowers them to achieve this with a simple click, intensifying the challenge for renters. This development necessitates even greater scrutiny of every listing to prevent the disappointment of an apartment that appears significantly superior online than in reality.

While virtual staging itself is not a novel concept, the integration of AI is. Bee, a Florida-based Realtor whose last name is withheld for privacy, noted that virtual staging frequently assists clients in visualizing how a home could be refurnished or remodeled. "You'd be surprised how little creativity a buyer or renter has," she remarked. She further explained the cost efficiency: "Virtual staging could be anywhere from, like, $40 to $400 based on what you're having these stagers do, whereas real-life staging can't be done for under a couple grand."

Bee provided an example from one of her current listings: a house featuring what she described as "dated" furniture. The original living room showcased plush sofas, an ornate wooden coffee table, a Persian-style rug, and heavy drapes. She then presented a version "redecorated" with ChatGPT, which featured a distinctly modern aesthetic with a white sofa, track lighting, and a simple, woven rug. While this edited photo isn't used in the official listing, she shares it with clients to illustrate the potential for updating the space.

Real estate professionals have access to various virtual staging tools; Bee's preferred platforms are Stuccco and BoxBrownie, both charging per listing. However, Bee highlighted a critical distinction between employing virtual staging software to illustrate a home's potential with new furnishings and minor upgrades, and using AI tools to generate deceptive listings. "There's a lawsuit waiting to happen," she warned. She elaborated on the terminology: "I think 'digitally altered' is not accurate. I don't necessarily put 'digitally altered' if I have AI make a bed, but 'digitally altered,' to me, says, 'I patched a hole.'"

Madison, a Queens resident, began her apartment search early, ahead of her lease expiration in the fall. Over her six years in New York, she had previously secured apartments through Facebook groups and, on one occasion, via the queer dating and classifieds app Lex. This current search, conducted on StreetEasy, has revealed a noticeable increase in AI-enhanced listings.

"I think scammy or misleading pictures for apartments have existed for as long as internet listings for apartments have, but it's really egregious now," Madison stated. She noted that while pre-AI real estate deceptions might involve photos of entirely different properties, "now I'm looking at a picture of a room that more or less looks real until you start looking at the details of the furniture and things like that, where they clearly took a picture of the actual room and said, 'Hey, ChatGPT, can you put some furniture in this for me?'"

In response to this trend, some states are beginning to regulate AI-enhanced listings. New York recently enacted a law requiring AI disclosure in advertisements, though its primary focus is on "synthetic performers" rather than AI-generated furniture. Nevertheless, the New York Secretary of State issued a warning last year regarding misleading AI-generated or AI-enhanced listings, emphasizing that brokers are already forbidden from publishing dishonest advertisements.

California's recent Altered Image Law takes a more comprehensive approach, mandating that anyone advertising property disclose the use of AI to alter or enhance images. However, similar to broader broker and Realtor regulations, the legal frameworks governing AI's application in listings and other advertisements exhibit significant variation across states.

Joyce, who eventually secured an apartment after a multi-month search, observed that even the property descriptions seem to be AI-generated. "Everything is 'charming.' Everything is 'cozy.' You notice the same wording patterns over and over again, where everything has 'spa-like finishes,'" she noted. She concluded, "Brokers are already so dishonest, and now they have, like, the lying machine in their pocket."