Have you heard that landlords throughout the nation are leveraging artificial intelligence to boost rental costs? It’s a startling reality – a recent analysis from the White House Council of Economic Advisers has uncovered that landlords are collectively hiking rental prices by over $3.8 billion each year through an AI tool named “AI Revenue Management” provided by RealPage.

This AI solution, integrated into RealPage’s property management suite, aims to offer rent price suggestions to property owners. However, it has been misused to enable collusion among landlords, leading to unlawful inflation of rental prices. This practice, referred to as “price coordination,” is a type of price fixing that violates the Sherman Act.

The findings reveal that nearly 25% of multifamily rental properties are utilizing the RealPage pricing algorithm, with some areas experiencing even greater rates of adoption. In cities such as Atlanta and Denver, landlords employing this AI tool have managed to raise rents by as much as $181 monthly.

While RealPage maintains that its clients have the freedom to accept or reject the AI’s pricing suggestions, evidence indicates that a system has been established to enforce adherence to these AI-driven price points among landlords.

The report also highlights that the $3.8 billion figure pertains only to those landlords who directly utilize the AI tool. Others may follow suit and increase their prices in reaction to competitors who adopt the AI recommendations, resulting in even steeper costs for renters.

In summary, banning the use of AI for determining rental prices could lead to a significant reduction in rental price hikes across the country. It’s clear this situation extends beyond just tenants and landlords – it’s fundamentally about promoting fair competition in the housing market.