Did you know that landlords all over the country are utilizing artificial intelligence to inflate rental prices? It’s true – a recent report by the White House Council of Economic Advisers uncovered that landlords are collectively raising rental prices by over $3.8 billion annually using an AI tool known as “AI Revenue Management” from RealPage.

This AI tool, included in RealPage’s property management software, is supposed to offer rent price recommendations to landlords. However, it is being misused to enable collusion among landlords, allowing them to illegally inflate rental prices. This practice, called “price coordination,” is a type of price fixing and is prohibited by the Sherman Act.

According to the report, almost one in four multifamily rental properties are utilizing the RealPage pricing algorithm, with some cities seeing even higher adoption rates. In places like Atlanta and Denver, landlords using the AI tool have managed to raise rental prices by up to $181 per month.

RealPage contends that customers have the choice to accept or reject the AI’s price recommendations. Nonetheless, evidence indicates that RealPage and its landlord clients have established a system to ensure compliance with the AI-optimized pricing.

The report also highlights that the $3.8 billion figure only represents landlords directly using the AI tool. Other landlords may increase their prices in response to competitors using the AI recommendations, resulting in even higher costs for tenants.

In general, getting rid of the use of AI to determine rent prices could significantly reduce price mark-ups for rental housing nationwide. It’s obvious that this problem extends beyond just tenants and landlords – it’s about guaranteeing fair competition in the rental market.