In an arti­cle for CAL­mat­ters, Wendy Fry explains how prop­er­ty own­ers are increas­ing­ly using the same AI tool to set rents in what fed­er­al pros­e­cu­tors are call­ing “an unlaw­ful infor­ma­tion-shar­ing scheme.”

Many land­lords now use a sin­gle com­pa­ny’s soft­ware — which uses an algo­rithm based on pro­pri­etary lease infor­ma­tion — to help set rent prices.

“The ille­gal­ly main­tained prof­its that result from these price align­ment schemes come out of the pock­ets of the peo­ple that can least afford it,” said Cal­i­for­nia Jus­tice Depart­ment spokesper­son Elis­sa Perez.

In Cal­i­for­nia and across the coun­try, city lead­ers are tak­ing action to pro­hib­it the prac­tice. In July, San Fran­cis­co became the first city to ban “the sale or use of algo­rith­mic devices to set rents or man­age occu­pan­cy lev­els.” Last month, Philadel­phia passed a sim­i­lar ban. San Diego and San Jose are con­sid­er­ing their own ordi­nances. While a pro­posed state bill that would have banned algo­rith­mic price-set­ting failed to make it through the leg­is­la­ture this year, the law­mak­er who intro­duced it says she will bring it back in the next ses­sion.

Mean­while, a fed­er­al antitrust suit charges the com­pa­ny, Real­Page, with enrich­ing itself and land­lords at the expense of renters by arti­fi­cial­ly inflat­ing prices. Fed­er­al offi­cials say the com­pa­ny con­trols 80 per­cent of com­mer­cial rev­enue man­age­ment soft­ware.