ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / ECONOMY & WORK

New Bill Targets Landlords Using Algorithms to Jack Up Rent Prices

The proposed legislation seeks to close a legal loophole and prevent landlords from price gouging
PUBLISHED MAR 21, 2024
A "for rent" sign is posted in front of a house | Getty Images | Photo by Justin Sullivan
A "for rent" sign is posted in front of a house | Getty Images | Photo by Justin Sullivan

US Senator Richard Blumenthal is sponsoring bills to stop what he says is price gouging by landlords facilitated by the use of algorithms and software. In a release, Blumenthal alleges that shared software platforms are used by landlords to collude with other landlords and raise rent prices across the nation. Thus, the Preventing Algorithmic Collusion Act seeks to close a loophole in the antitrust laws and prevent landlords from exploiting software. Here’s all you need to know about the proposed legislation.

Sen. Richard Blumenthal (D-CT) speaks with reporters | Getty Images | Photo by Anna Moneymaker
Sen. Richard Blumenthal (D-CT) speaks with reporters | Getty Images | Photo by Anna Moneymaker

According to Senator Blumenthal’s official release, companies like RealPage and Yardi which advertise their products as “property management software,” help landlords across the nation coordinate prices and increase the rent in the market.

Real estate software is pretty common amongst landlords as they aggregate data on nearby rents and recommend rent prices/hikes.

However, according to Blumenthal, this practice impacts all renters, not just those living in buildings where landlords use the software.

“Potentially every renter in Connecticut is paying more, because some significant proportion of property owners and landlords are benefitting by this rental price gouging,” Blumenthal said in his release.

Further in a CTpublic report, Tom Freeman, an attorney with Greater Hartford Legal Aid, said that local housing advocates have witnessed the effect of the software price gouging first and its impact on Connecticut neighborhoods.



 

According to Freeman, people are afraid for a certain time of the year when they know their lease will be renewed and the rent prices will go up by a certain amount. “We see those downstream effects all the time of the rents just continually rising,” Freeman said in the report.

Graystay Partners Rental in Connecticut is already facing allegations of using such software to gouge rent prices in a class action lawsuit, according to Blumenthal.

The Preventing Algorithmic Collusion Act seeks to prevent companies and landlords from using algorithms to collude and set higher rent prices. While price fixing and other forms of collusion are illegal under the antitrust laws, the use of algorithms to determine pricing decisions is not covered under them, as per Blumenthal.



 

Thus, to strengthen the current price-fixing law, the proposed legislation seeks to implement the following changes. The legislation seeks to clarify the law to make it easier to challenge algorithmic price-fixing. The aim is to help antitrust enforcers prevent algorithmic price-fixing beforehand.

It also seeks to increase transparency by directing companies that use algorithms to set prices to disclose the use of such software and give antitrust enforcers the ability to audit the pricing algorithm. The legislation also seeks to ban companies from using competitively sensitive information from direct competitors to inform or train a particular pricing algorithm.

Furthermore, the proposed legislation if passed will direct the Federal Trade Commission to study pricing algorithms and their impact on competition.

The National Apartment Association (NAA) said in a statement on Wednesday that implementing and embracing new technologies is important and responsible use of technology can help manage the supply and demand of properties.

The NAA stated that the nation’s housing cost crisis is exacerbated by a lack of all housing types. Thus, to solve the problem, the U.S. will need 4.3 million new rental homes by 2035 only to keep pace with demand and address the shortfall.

MORE ON MARKET REALIST
The product had its doubters, but, in the end, the entrepreneurs were able to make a lasting impact.
14 hours ago
Things were not looking too good at one point as most of the sharks had backed out... until the end.
1 day ago
A number of episodes with the icon reprising his role as host will be released this year.
1 day ago
She had only believed that her items were worth a thousand bucks and that was not the case.
1 day ago
The host wasn't expecting such unusual answers to be among the top options.
1 day ago
He was able to get the puzzle right just in the nick of time in order to win a significant amount of cash.
1 day ago
The host seemed pretty confident that the answer was in no way going to be correct.
2 days ago
The history attached to the flag is tragic, and it personally affected the guest.
2 days ago
The product was unique and could help millions of new mothers around the globe.
3 days ago
Viewers believe that the game show sometimes doesn't allow participants to win multiple prizes.
3 days ago
Harvey was clearly annoyed by the answer and refused to buy any explanation.
3 days ago
After his impressive 74 winning streak, Ken Jennings has been hosting the show since 2022 with a $4 million paycheck.
3 days ago
Drew Carey was supposed to look scary, but the host ended up being funny and awkward.
3 days ago
Steve Harvey mocked Snoop Dogg over his choice and went on to roast the rapper more.
3 days ago
It seemed like she was going to lose her chance of winning, but that was not the case after all.
3 days ago
The host is clearly not a fan of hyping up answers that he doesn't personally approve of.
4 days ago
The contestant's appearance was eerily similar to the host's look many years ago.
4 days ago
The East Coast Wrestling Association website has inducted 'Big' Bill Page into the Hall of Fame.
4 days ago
Her composure and confidence in front of all those people were unwavering and commendable.
4 days ago
The duke of Verdura had crafted a masterpiece, a pair of Maltese cross bracelets in enamel for Coco Chanel.
4 days ago