U.S. Senator Richard Blumenthal (D-CT) is partly blaming increasing rent prices on software used by landlords.
RealPage and Yardi are advertised as property management software. But Blumenthal said they are actually loopholes that allow landlords to compare price increases.
It is illegal for property management companies to compare price increases.
“Software algorithms that do the work of cartels and collusion ought to be stopped. Because it is inflating rent for the ordinary person who goes to the landlord and is given a price that's based on an algorithm rather than real competition,” Blumenthal said. “Stifling competition ultimately means higher prices for renting apartments and homes here in Connecticut and all around the country.”
According to Blumenthal, rent has increased 20% on average in the last four years.
He is co-sponsoring the Preventing Algorithmic Collusion Act, which would keep rental companies from using the software to set higher prices.
“Price fixing is illegal under the law; when people come together, whether it is in a smoke-filled room or a secret meeting, or on the phone when they agree to set prices among themselves, whether they're landlords or retail sellers,” Blumenthal said. “What's happening here is that prices are set and collusion is achieved through software and algorithms.”
A class action lawsuit against Graystay Partners Rental in Connecticut, who is accused of using the software, is already underway, according to Blumenthal.
“They own apartment buildings in Newington and elsewhere in Connecticut. So this practice affects all communities, housing throughout the Connecticut area, and countrywide. And that is the reason why we feel that Congress ought to be involved here,” Blumenthal said.
Blumenthal is also co-sponsoring the Preventing the Algorithmic Facilitation of Rental Housing Cartels Act, aimed at software companies.
