Your Landlord Might Be Raising Rent Using Algorithms — And Kamala Harris Plans To Ban It. Will She Succeed? Here's What's At Stake

In a new, ambitious housing plan, Democratic presidential nominee Vice President Kamala Harris has just introduced a measure that could fundamentally shift how rents are set in many parts of the country. 

Perhaps the most striking feature of her proposal is to ban landlords from using algorithms that some claim allow them to coordinate rent increases with other property owners. This bill, entitled the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act, aims to prevent landlords from using such algorithms to increase rental prices. This approach has been receiving increasing legal and public attention.

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“Some corporate landlords collude with each other to set artificially high rental prices, often using algorithms and price-fixing software to do it,” Harris recently said. “It’s anticompetitive, and it drives up costs.”

Rents have surged in recent years, partly because of an acute housing shortage. Since 2019, U.S. rents are up by about 19%, and more people than ever are struggling to afford their housing. According to recent surveys, most Americans — 83% of Democrats and 68% of Republicans — agree that the lack of affordable housing is a major problem.

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This new proposed legislation targets RealPage, a technology company that deals in real estate, which was accused of using its algorithm YieldStar to inflate rents above the market range. YieldStar analyzes private data from multiple markets and suggests rental prices to landlords. This has piqued law enforcement agencies’ interest amid claims of price-fixing and collusion, with attorneys general of Arizona and Washington, D.C., filing lawsuits against RealPage.

“Landlords using RealPage are not just taking the market price for rent — they’re setting the market price,” said Arizona Attorney General Kris Mayes. She estimated that 70% of rental homes in Phoenix and 50% in Tucson are owned by firms using RealPage’s software. In Washington, D.C., the attorney general has sued RealPage and its clients similarly, alleging they have created a “housing cartel” controlling over 30% of the city’s multifamily units.

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Maurice Stucke, a former antitrust prosecutor with the Department of Justice, said, “When you start seeing prices going up and demand dropping, that quite often is a red flag for collusion.” RealPage has not commented publicly on these accusations.

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In addition to suppressing algorithmic rent-setting, Harris is pushing the passage of legislation that will hamstring Wall Street investors from buying houses in bulk. But critics argue these merely alleviate the most egregious abuses and don’t take on the larger issue of housing affordability head-on. The real test, they say, is embedded in the thicket of supply and demand. 

“People think the big landlords have more power than they do,” said Jenny Schuetz, an expert in urban economics with the Brookings Institution. Even as she called for scrutiny of the practices, Ms. Schuetz questioned whether they would do much to ease renters’ pain. The concern is that too much regulation would discourage investment in new housing, worsening the supply problem. 

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“If you hit private equity too hard, you risk reducing the capital available for building new homes,” noted Ben Metcalf, managing director at UC Berkeley's Terner Center for Housing Innovation.