The Rent Is Too Damn High: Did Trump Just 'Bless' Using AI to Jack Up Rents?

In September, renters dealing with affordability challenges started getting some actual good news - price drops. “National average rent fell 0.3% from August,” reported the Wall Street Journal, “the steepest September drop in more than 15 years, according to data firm CoStar.” It was an unexpected decline. Why? While there was a lot of multi-family apartment building the past few years as rents increased, the construction boom had tapered off, and big landlords thought the rent hikes could resume. Only, as the WSJ noted, this “glut of new units is taking longer to absorb than expected.”

One driver of lower rents that went unmentioned is that a main focal point for pricing rental units - the data sharing software and consulting firm RealPage - has undergone a legal assault for years. In October of 2022, during the post-Covid inflationary moment, Heather Vogell published an investigative piece at Propublica on how one corporation was using algorithms to help giant landlords collude. Median rents in some cities went up 18% in the spring of 2022, and the whole industry was talking about the giant price spike. Vogell reported a remarkable comment from one executive about RealPage’s role in the rental increases: “I think it’s driving it, quite honestly.”

Here’s how the alleged conspiracy worked. RealPage, which is owned by powerful private equity fund Thoma Bravo, allegedly shared sensitive rental and occupancy information across its clients, who are big corporate landlords. It then worked with them to raise rents and keep additional units off the market through a variety of tactics. For instance, RealPage software automatically recommended higher rents to clients. It also made it difficult for landlord employees to lower rents or give concessions, and it had pricing advisors who organized meetings for landlords to exchange information.

As the architect of RealPage once explained about the value of the software and why landlords should be charging more and have more empty units, “[i]f you have idiots undervaluing, it costs the whole system.”

The story created an uproar, including lawsuits from Arizona and D.C. and reactions from local and Federal lawmakers. Multiple states and cities have now passed bills banning the kind of algorithmic price-fixing fostered by RealPage. In August of 2024, the Department of Justice Antitrust Division, as well as nine states (CA, CO, CT, IL, MA, MN, NC, OR, TN) filed a monopolization and price-fixing lawsuit. The complaint even had price-fixing ...