Ban Algorithmic Rental Pricing

Price-Fixing by Algorithm: How Software Collusion Is Driving Rents Through the Roof

Landlords across the United States are using pricing algorithms to coordinate rent increases in what the Department of Justice calls an illegal anticompetitive scheme harming millions of renters. This is documented collusion facilitated by RealPage, a Texas-based software company whose algorithms control pricing for over four million rental units—approximately eight percent of all rental housing nationwide.¹ In some markets, RealPage’s reach extends far deeper: in Washington, D.C., the algorithm influences pricing for more than ninety percent of units in large buildings.² Massachusetts Attorney General Andrea Joy Campbell joined the Justice Department in August 2024 in suing RealPage and five major landlords operating over 1.3 million units across forty-three states for using algorithmic pricing to suppress rental competition and keep rents artificially high.³

How RealPage’s Algorithm Coordinates Price-Fixing

The scheme works through elegant simplicity disguised as technological innovation. Landlords feed their confidential pricing data—rental rates, occupancy figures, renewal percentages, discount strategies—into RealPage’s algorithm. The algorithm aggregates this competitively sensitive information from competing landlords and spits out pricing recommendations that systematically push rents higher than market competition would permit.⁴ RealPage executives do not hide this function. When asked what role the software played in driving rents up by 14.5 percent—a record increase the company celebrated at an industry conference—a RealPage vice president responded: “I think it’s driving it, quite honestly.”¹ He elaborated: “As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually.”¹

This is price-fixing. The fact that an algorithm intermediates the coordination does not change the fundamental illegality. When horizontal competitors share confidential pricing information and use that shared information to coordinate price increases, antitrust law calls this collusion regardless of whether humans or computers execute the scheme. The Justice Department’s lawsuit alleges exactly this: that landlords “participated in an unlawful scheme to decrease competition in apartment pricing by sharing sensitive rental data and coordinating through common algorithms to keep rents artificially high.”⁴ Massachusetts Attorney General Campbell emphasized that “This lawsuit against RealPage and the named landlords is one step towards that accountability.”³

RealPage markets its algorithm—formerly called YieldStar, now rebranded as AIRM (AI Revenue Management)—by promising to “help you outperform the market 3% to 7%.”⁵ This is not a prediction. This is a performance guarantee achieved by suppressing market competition. Greystar, the nation’s largest property management firm and a defendant in the Justice Department lawsuit, found that even during an economic downturn, its buildings using YieldStar “outperformed their markets by 4.8%.”⁵ What “outperforming the market” means in plain English is charging renters more than market competition would permit. When every major landlord in a market uses the same algorithm fed by the same shared data, the algorithm does not respond to market forces. The algorithm becomes the market force, systematically pushing rents upward in coordinated lockstep.

The Justice Department and Massachusetts Lawsuits

The defendants in the Justice Department lawsuit read like a who’s who of corporate landlord power: Greystar Real Estate Partners, Blackstone’s LivCor, Camden Property Trust, Cushman & Wakefield’s Pinnacle Property Management, Willow Bridge Property Company, and Cortland Management (which settled separately).⁴ Together these companies operate over 1.3 million rental units.⁴ Massachusetts Attorney General Campbell’s lawsuit names five of these defendants—Greystar, LivCor, Camden, Cushman & Wakefield, and Willow Bridge—emphasizing their operation of rental housing throughout Massachusetts.³ These are not small-time landlords experimenting with new technology. These are sophisticated real estate corporations that understood exactly what they were doing when they joined RealPage’s coordinated pricing scheme.

The complaint details how coordination extended far beyond simply subscribing to algorithm recommendations. Landlords engaged in what they euphemistically called “market surveys” but which the Justice Department more accurately describes as “call arounds”—direct communications where property managers shared rental rates, occupancy figures, pricing strategies, and discount information with competitors.⁴ Executives exchanged competitively sensitive information including renewal rates, pricing strategies, and RealPage pricing recommendations. Greystar, for example, provided Camden with upcoming quarterly pricing approaches and RealPage algorithm recommendations.⁴ Landlords participated in RealPage user groups where they discussed pricing methodologies and strategies, including renewal increases and concession plans.⁴ They shared technical parameters controlling how the algorithm operated, such as auto-accept settings and daily price adjustment limits.⁴

This coordination violated the most basic antitrust principle: competitors cannot coordinate prices. The Sherman Act prohibits agreements in restraint of trade. When Greystar shares its pricing strategy with Camden, when landlords participate in user groups discussing renewal rates, when property managers conduct “call arounds” exchanging occupancy data, these are precisely the activities that antitrust law prohibits. The algorithm provides a veneer of technological sophistication, but the underlying conduct remains old-fashioned price-fixing. Acting Assistant Attorney General Doha Mekki stated: “Today’s action seeks to end their practice of putting profits over people and make housing more affordable for millions.”⁴

RealPage’s market dominance makes the anticompetitive effects particularly severe. The company controls eighty percent of the market for rent-setting software.⁶ RealPage has access to transactional apartment data from the rent rolls of over thirteen million units, with clients controlling 19.7 million out of 22 million “investment-grade” housing units in the United States—almost ninety percent of the market for multifamily rental housing.⁶ In over forty markets nationwide, anywhere between thirty and sixty percent of multifamily apartments use RealPage as their pricing algorithm.⁶ This concentration means that in many cities, a single algorithm—fed by shared data from nominally competing landlords—determines pricing for the majority of available rental housing. Renters face the illusion of choice among multiple landlords while those landlords coordinate pricing through algorithmic intermediation.

The Human Cost: Crushing Working Families

The human impact proves devastating. Working families face rent increases of hundreds of dollars per month with no corresponding improvement in housing quality or neighborhood amenities. The increases reflect not market fundamentals but algorithmic coordination. Young people struggle to afford their first apartments. Families choose between paying rent and buying groceries. Seniors on fixed incomes face displacement from communities where they have lived for decades. The housing affordability crisis—already severe due to insufficient construction and wage stagnation—is substantially worsened by algorithmic price-fixing that extracts additional rents through illegal coordination.

The geographic scope extends nationwide. The Justice Department lawsuit references landlords operating across forty-three states and the District of Columbia.⁴ Massachusetts Attorney General Campbell’s participation reflects impacts throughout the Commonwealth.³ ProPublica documented RealPage’s influence in Seattle, Dallas, Denver, Washington D.C., and numerous other cities.¹ This is not a problem affecting one market or one region. This is systematic algorithmic price-fixing operating at national scale, enabled by a single dominant software company and executed by the country’s largest corporate landlords.

Federal Legislation: The Welch-Wyden Bill

Federal legislation to ban algorithmic rental pricing has been introduced but not enacted. Senators Peter Welch of Vermont and Ron Wyden of Oregon introduced the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act of 2024, legislation that would make it illegal for property owners to contract with companies that coordinate rent prices and housing supply information, and would bar two or more rental owners from coordinating on such information.⁷ The bill was cosponsored by Senators Amy Klobuchar, Bernie Sanders, Mazie Hirono, Laphonza Butler, Jeff Merkley, and Richard Blumenthal.⁷ The legislation was referred to the Senate Judiciary Committee but has not advanced.⁷

Senator Welch emphasized that reporting by ProPublica and other outlets demonstrated how companies like RealPage and Yardi “advertise their products as ‘property management software,’ but in fact help landlords coordinate prices to increase rental rates in the same market.”⁷ Reports indicate that the practice increases rents for client landlords between five and twelve percent.⁷ The bill’s stall in committee reflects the political power of the real estate industry and the challenge of enacting reforms that directly threaten corporate profits. But legislative inaction does not make the problem less urgent or the solution less necessary. Congress must pass comprehensive legislation banning algorithmic rental pricing or acknowledge that it prioritizes landlord profits over housing affordability.

Massachusetts has introduced complementary state-level legislation—Senate Bill S.1016 and its House companion—using a “Coordination Ban” approach to prohibit landlords from subscribing to algorithmic pricing services.⁸ While state action is valuable, federal legislation remains essential to address this nationwide scheme comprehensively.

What Congress Must Do: Ban Algorithmic Pricing Entirely

The policy solution is straightforward: Congress must ban algorithmic rental pricing entirely. Federal legislation should prohibit any service that aggregates confidential pricing information from competing landlords and uses that information to recommend or set rents. Civil penalties should be substantial—not $200 fines but penalties calculated as percentages of revenue sufficient to eliminate profit incentives for violation. Criminal penalties should apply to corporate executives who knowingly implement illegal coordination schemes. Private rights of action should permit tenants to sue for damages when landlords use prohibited algorithms, with damages tripled as antitrust law permits.

The ban must cover not just explicitly coordinated pricing but also the information sharing that enables coordination. Landlords should be prohibited from sharing confidential pricing data with competitors through any intermediary, algorithmic or otherwise. Software companies should be prohibited from aggregating such data across competing landlords. “User groups” and “market surveys” that facilitate information exchange among competitors should be explicitly prohibited when they involve competitively sensitive information. The transparency that serves consumers—public posting of rental rates, clear disclosure of fees, honest advertising—should be encouraged. The transparency that serves landlord coordination—sharing confidential strategies through algorithm intermediaries—should be banned.

Enforcement requires aggressive federal action. The Justice Department’s lawsuit against RealPage and six major landlords represents crucial accountability, but litigation alone proves insufficient.⁴ Settlements must include strong injunctive relief prohibiting future algorithmic coordination, not just modest fines that landlords treat as cost of doing business. The Cortland Management settlement requiring cessation of competitor data use, court-appointed monitoring, and prohibition on sharing competitively sensitive information provides a model.⁴ All defendants should be required to accept similar terms, with monitoring ensuring compliance.

State attorneys general must file parallel lawsuits under state antitrust and consumer protection laws. Massachusetts Attorney General Campbell’s participation in the Justice Department lawsuit represents important leadership.³ Class action lawsuits by tenants should be encouraged, with courts recognizing tenant standing to challenge algorithmic pricing that raised their rents through illegal coordination. The real estate industry should face a litigation environment where algorithmic price-fixing creates massive legal exposure, discouraging future coordination.

Congress must pass the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act.⁷ Senators Welch and Wyden deserve credit for introducing legislation directly confronting algorithmic coordination, and the bill’s bipartisan cosponsorship demonstrates potential for broad support. But potential support means nothing without action. The Senate Judiciary Committee must hold hearings, advance the legislation, and force floor votes. Every senator should be required to explain their position: do you support banning algorithmic price-fixing that raises rents through illegal coordination, or do you prioritize corporate landlord profits over housing affordability? There is no middle ground. Either algorithmic rental pricing is prohibited, or it remains legal. Choose.

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