Dive Brief:
- Two U.S. senators introduced a bill last week meant to prevent the use of algorithmic systems to raise the price of rental housing units.
- If passed, the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act of 2024 would make it unlawful for rental companies to use services that coordinate rental housing prices and unit supply information. It would also prohibit price coordination between two or more owners.
- The bill, authored by Senators Ron Wyden, D-Ore., and Peter Welch, D-Vt., follows a series of lawsuits about whether property management software, including products by RealPage and Yardi, has allowed property owners to indirectly coordinate rent prices. The Department of Justice has also conducted an investigation into RealPage’s pricing algorithm.
Dive Insight:
RealPage and Yardi’s property management software uses pricing and leasing information in order to suggest rents to its clients. RealPage has stated that its software allows its clients to increase rents between 5% and 12%, according to the bill’s authors, who singled out the two companies by name in a press release.
“Setting prices with an algorithm is no different from doing it over cigars and whiskey in a private club,” Wyden said in the release. “Although it's my view that these cartels are already violating existing antitrust laws, I want the law to be painfully clear that algorithmic price fixing of rents is a crime.”
Under the bill, a rental owner coordinating rents or supply information with another landlord, such as through an algorithm or software, would be considered a violation of the Sherman Antitrust Act.
The legislation would also prevent two or more coordinating parties from merging if the union would lessen competition, and allow individual plaintiffs to invalidate any pre-dispute arbitration agreement or joint action waiver that would prevent them from filing suit under the act.
RealPage did not respond to a request for comment on this article. Yardi declined to comment, and referred Multifamily Dive to the National Multifamily Housing Council, which also declined to comment.
The bill’s co-sponsors include Sens. Amy Klobuchar, D-Minn., Bernie Sanders, I-Vt., Mazie Hirono, D-Hawaii, Laphonza Butler, D-Calif., Jeff Merkley, D-Ore., and Richard Blumenthal, D-Conn. It is also endorsed by the American Economic Liberties Project, the National Low Income Housing Coalition and the National Alliance to End Homelessness.
A few days ago, Wyden and Klobuchar also introduced the Preventing Algorithmic Collusion Act, which would apply similar restrictions on using algorithms to collude on prices across all industries.
