San Francisco and Philadelphia are leading the charge against rent-setting software, passing laws to regulate the use of algorithmic systems that leverage nonpublic data.
The legislation aims to curtail the influence of companies like RealPage, which faces a federal lawsuit alleging its software facilitates price-fixing at millions of rental properties. While the new laws stop short of banning such systems entirely, they prohibit the use of confidential data in rent calculations and empower tenants to sue noncompliant landlords.
Legislators in cities like San Diego and states such as New York and Colorado are following suit, drafting measures to address what many see as an imbalance between renters and data-driven landlords.
The Wall Street Journal reported the Justice Department’s lawsuit against RealPage, filed with the support of eight state attorneys general, accuses the company of illegally using confidential data to set rents, driving up prices in violation of antitrust laws.
RealPage denies these allegations, claiming landlords using its software aren’t compelled to follow pricing recommendations. Nonetheless, the company has adjusted its services, offering landlords the option to opt out of using nonpublic data.
With housing costs soaring nationwide, lawmakers are under pressure to act. In Philadelphia, councilman Nicolas O’Rourke championed legislation banning rent-pricing software reliant on confidential data, saying: “We are living in a time where we’re not waiting for AI and algorithms to get here. They’re here.”
Advocacy groups like Local Progress and the American Economic Liberties Project have been instrumental in crafting such measures. Critics, however, argue that targeting rent algorithms is a distraction from the root cause of rising housing costs: a lack of supply.
