Landlords Are Using AI To Raise Rents — and Cities Are Starting To Push Back

The Rent Algorithm Controversy: Who Wins, Who Loses?

Ever wonder why apartment rents seem to climb higher than the morning sun? It might not just be market forces. A software called RealPage, used by landlords to set rents via algorithms, is catching serious heat. Federal prosecutors claim this software facilitates “unlawful information-sharing,” driving prices up and competition out. San Francisco was the first city to ban such algorithmic rent-setting tools, with places like San Diego and Philadelphia following suit. The ripple effect is growing, with even the Justice Department filing an antitrust lawsuit against RealPage, accusing it of artificially inflating rents and hurting renters in hot markets.

RealPage, which controls a whopping 80% of the commercial rent-pricing market, uses data shared by landlords—like rent prices, lease renewals, and occupancy forecasts—to create rent recommendations. Critics argue it’s like having landlords secretly huddle in a smoky room to keep prices sky-high. RealPage, however, defends its tech as legal and beneficial, insisting the real issue is housing shortages, not its algorithms. However, with rents soaring 50% above the national average in cities like San Diego, many aren’t buying it.

Tenants like Navy veteran Alan Pickens feel the squeeze. Alan and his wife, who live in a San Diego apartment complex flagged in the Justice Department’s suit, are downsizing their lives to stay afloat. Despite earning solid incomes, they’ve had to give up gym memberships and downsize cars, all while facing rents that make owning a home seem like a pipe dream. As Alan puts it, “Why are we struggling?”

Here’s where it gets stickier: Public pension funds, including California’s teachers and public employees’ retirement systems, have investments tied to RealPage. Critics say this means pensioners are inadvertently funding a system that hikes their housing costs. RealPage insists landlords can reject its pricing advice, but the lawsuit alleges that it requires landlords to jump through hoops, making it easier to follow the algorithm’s lead than buck it.

For renters, the consequences are clear: less competition, higher costs, and fewer options. For lawmakers and federal agencies, the fight is on to decide whether this tech serves innovation—or just corporate greed………[read more]

Rising Dough

In a market where technology influences rent prices, how can businesses balance innovation and ethics, ensuring fair competition while meeting consumer needs?