Two nationwide companies offer software that allows landlords to compare and set rental prices using algorithms. Two of Vermont’s members of Congress say that’s price fixing.
U.S. Rep. Becca Balint, D-Vt., and U.S. Sen. Peter Welch, D-Vt., want to outlaw the use of rental property management software that allows landlords to compare and set rental prices using algorithms — behavior that, the two members of Congress allege, is akin to price fixing.
“What they do is, basically, they aggregate and artificially coordinate price increases, and so it really results in less competition, higher rent prices, pricing people out,” Balint told VTDigger in an interview Thursday morning. “If it weren’t being done by AI or an algorithm, we would call it what it is, which is a price fixing cartel, right? That’s what is happening.”
On Wednesday, Balint introduced a bill in the House that would bar landlords and property management companies from using these software programs, which reports have shown and a federal lawsuit has alleged correlate with exponential, coordinated rent hikes. Welch introduced a companion version of the same bill in the Senate in January.
The two most notable platforms that offer such property management software, according to Balint and Welch’s offices, are RealPage and Yardi. According to Reuters, RealPage has been subject to more than 20 federal lawsuits, in which plaintiffs have argued that the company’s practices violate federal antitrust laws, and artificially hike their rent. The U.S. Department of Justice has backed the tenants’ claims in court, according to ProPublica.
Neither RealPage nor Yardi responded to multiple requests for comment on Thursday.
But Yardi certainly has a footprint in Vermont, according to its publicly available market information. Yardi’s website shows that within the University of Vermont’s market area, Yardi holds pricing data on 33 properties within Chittenden County. (The University of Vermont told VTDigger on Thursday that it does not utilize either Yardi or RealPage.)
Welch said in a statement on the bill that Vermonters “are amongst the hardest hit by the housing crisis raging across the country,” with low vacancy rates and steadily increasing prices.
“In the midst of this crisis and at a time when families are struggling to put food on the table, housing providers are using anticompetitive pricing algorithms to raise rents. It’s outrageous,” he said in January, when he introduced his version of the bill.
Balint, Vermont’s lone House member, cosponsored the Preventing Algorithmic Facilitation of Rental Housing Cartels Act alongside U.S. Rep. Jesús García, a Democrat from Chicago. She told VTDigger that her involvement is meant to send a message: “No, this isn’t just impacting folks in cities.”
“It’s impacting folks in more rural areas, more suburban areas,” she said. “We have given over our control in the marketplace to these computers, essentially.”
That’s despite the fact that, in a rural state like Vermont, there may be a perception that small, local landlords are the norm.
“What I want people to understand is that property management and owning vast swaths of rental units has become big business across this country,” Balint said. “You are contracting with a particular property manager, and on the face of it, it may seem like it is being run by a small local Mom and Pop … situation. But what is the larger, national conglomerate at play here?”
Story Written by Sarah Mearhoff, VTDigger