Republicans Are Giving Rental Price-Fixing a Green Light
The GOP’s budget reconciliation bill includes a ban on state-level artificial intelligence regulations that could undermine efforts in several states to rein in pricing consultants like RealPage, a company that helps landlords use AI to “optimize” rent hikes.
A housing building in Bowie, Maryland, on August 25, 2024. (Maansi Srivastava for the Washington Post via Getty Images)
Republicans’ massive artificial intelligence giveaway in their must-pass budget reconciliation bill could kill crackdowns on real estate management company RealPage for raising rents and contributing to the country’s housing crisis. The move comes after RealPage drastically scaled up its lobbying efforts in Washington.
The language in the bill amounts to a ten-year ban on state governments passing any new regulations on artificial intelligence technology. According to congressional staffers and outside policy advocates monitoring the reconciliation package, that section would apply to the growing industry of pricing consultants using AI tools across various sectors, the most powerful player being RealPage.
RealPage, which offers an “analytics” platform for landlords, is currently facing a bipartisan crackdown in a number of states for helping landlords “optimize” rent increases. Those reforms would be preemptively nullified if the current language in the budget bill makes it into the final version. The House Energy and Commerce Committee voted on an initial markup of the bill yesterday afternoon.
RealPage has been hit with a torrent of class action lawsuits since 2022 for allegedly facilitating a price-fixing cartel among landlords, including an active antitrust case from the Department of Justice.
In response to these threats, RealPage has dramatically staffed up its Washington lobbying team. One of the trade groups representing RealPage, the National Multifamily Housing Council, increased its lobbying spending from $4.8 million five years ago to nearly $9 million in 2024. In the first quarter of this year, the group — which is cited alongside RealPage in one of the major class action lawsuits — disclosed that it lobbied on AI-related housing issues that now appear in the tax bill.
The primary lobbying behind the ten-year moratorium on state-level AI regulation is coming from the Big Tech giants, according to congressional staffers.
Don’t Say Price-Fixing
Over the last two years, cities and states across the country began fighting back against algorithmic rental price-setting, proposing legislation that directly targets RealPage’s business model. The company has been accused in lawsuits of raising rents in certain local housing markets by as much as 33 percent, potentially costing renters billions of dollars a year, one federal study found.
Studies show that US renters are being priced out of their homes as rents rise faster than wages. In 2023, nearly half of households that rent were cost-burdened, paying more than 30 percent of their income toward housing costs.
According to one recent legal briefing, lawmakers in dozens of states have introduced legislation this year barring or restricting algorithmic pricing, and many of these bills are specifically addressing price-setting by landlords.
Colorado is the only state so far in which such a bill has passed both chambers — although the legislation still awaits Democratic governor Jared Polis’s signature. Polis said he supports the GOP measure to prohibit state AI regulation in the reconciliation bill, which would nullify the state bill.
Various cities and municipalities have already passed and are enforcing similar ordinances. In California, several cities have implemented bans on algorithmic price-setting for rents, including Berkeley, San Diego, and San Francisco. Minneapolis and Philadelphia have also passed bans.
RealPage is currently challenging the Berkeley ordinance in federal court.
While RealPage has been particularly targeted by such bans, a host of other state-level AI legislation would also be impacted by the proposed moratorium, including state bans on deepfakes in political advertising and regulations on government use of AI.
RealPage has already received a modest reprieve from regulatory scrutiny under the Trump administration, despite the continuation of the Justice Department’s antitrust lawsuit against the company. Legal challenges against the company are also continuing on a state level across the country, from New Jersey to Washington.
The firm’s trade association, the National Multifamily Housing Council, specifically lobbied for the “repeal/removal of FTC Blogs/Guidance” targeting RealPage and other rental property managers. The policy statements in question — one titled “Price fixing by algorithm is still price fixing” — have since been scrubbed from the Federal Trade Commission’s website.