CA Landlords Are Using AI To Raise Rents, San Jose and Others Are Pushing Back

Many renters are feeling the strain of skyrocketing rents, which have been exacerbated by a pervasive algorithm-driven pricing strategy. This scheme, exploited by landlords using centralized software to set rent, has recently drawn the ire of federal prosecutors and prompted legislative action in California cities. San Diego is taking steps, similar to those in San Francisco, to obliterate the practice of algorithmic rent setting, arguing it is not just unethical but unlawful and detrimental to rental affordability.

The federal antitrust lawsuit against RealPage, a property management software company, is a pivotal moment in the battle for equitable housing. This lawsuit posits that RealPage operates as an 'algorithmic intermediary' that collects and exploits sensitive market data from landlords, thereby enabling them to fix rental prices collectively. This manipulation not only harms potential tenants by inflating rents but also raises significant competition concerns, highlighting an alarming trend where a handful of landlords can artificially influence market dynamics.

San Diego city officials, motivated by the need to protect renters, are pushing forward with an ordinance to ban the use of software that sets rents based on opaque algorithms. Councilmembers Peter Ortiz, Omar Torres, and David Cohen emphasize their commitment to ensuring rental prices remain fair and just, in response to what they see as a market manipulated by technology and lacking any transparency. Their initiative comes on the heels of similar actions by San Francisco, showcasing a growing trend among California cities to combat unfair housing practices.

Despite efforts by politicians like Sen. Melissa Hurtado to curb algorithmic pricing, the proposed legislation failed to progress this year. This highlights the complexity and pushback surrounding the regulation of tech-driven methods influencing rent prices. The struggle showcases a broader battle between conventional legislation and the rapid advancement of technology in real estate, advocating for more thorough reforms, especially to ensure that renters are no longer victims of price manipulation orchestrated by algorithmic data usage.

Read at San Jose Inside