In Atlanta, a renter looking for a modest apartment might notice a puzzling trend: units in seemingly similar buildings are priced almost identically. It’s not a coincidence. An artificial intelligence tool called “AI Revenue Management,” embedded within the property management software RealPage, is shaping rents for millions of Americans.
According to a report from the White House Council of Economic Advisers (CEA), this AI isn’t just influencing the market — it’s driving rents higher, often without landlords ever needing to discuss a single price.
An AI-driven cartel
The software, created by RealPage, uses algorithms to suggest optimal rental prices based on competitor data. Ostensibly, the tool is there to help landlords maximize revenue. In reality, critics allege it facilitates something more troubling: price coordination.
By analyzing market data and recommending prices, the AI effectively allows landlords to act as a single, dominant entity — a cartel. The algorithm recommends prices that are higher than the profit-maximizing price each landlord would set independently, the CEA argues. This behavior, known as “price fixing,” is illegal under the Sherman Act, which outlaws anti-competitive practices.
The scope of the issue is staggering. Nearly one in four multifamily rental properties in the U.S. use RealPage’s software. In cities like Atlanta, Dallas, and Denver, that number exceeds 50%. On average, renters in these AI-managed properties pay $70 more per month — a total of $3.6 billion annually, according to the CEA report. In some areas, the AI-driven increase reaches $181 per month.
Pushing back against algorithmic pricing
The backlash has been swift. The Department of Justice (DOJ) and attorneys general from eight states have filed a civil antitrust lawsuit against RealPage, alleging that the software “deprives renters of the benefits of competition” and harms millions of Americans, according to journalists from Popular Information.
RealPage denies the allegations, arguing that landlords have “100% discretion to accept or reject software price recommendations.” But evidence from a separate class-action lawsuit suggests otherwise. According to the complaint, RealPage uses a compliance system to enforce adherence to its AI-generated prices. Landlords who deviate often face hurdles, needing approval from RealPage’s “Pricing Advisors” or senior management. Witnesses report that deviation requests are denied almost 99% of the time.
Some cities are taking matters into their own hands. San Francisco and Philadelphia have already passed laws banning algorithmic tools like RealPage from setting rents. Other cities, including San Jose and San Diego, are considering similar legislation.
A Market Forever Changed?
The implications of RealPage’s AI stretch far beyond the tenants it directly affects. By setting rents higher, the software pressures non-participating landlords to raise their prices as well. This ripple effect means the true cost of AI-driven rent inflation could be billions more than the CEA’s estimates.
Critics argue this reflects a broader issue with AI in markets. While these tools promise efficiency, they often exacerbate inequalities. Housing, a basic human need, becomes yet another domain where algorithms benefit corporations at the expense of individuals.
As lawsuits and legislation continue to unfold, one question looms: how much control should AI have in shaping the markets we depend on? For millions of renters, the answer may determine whether they can afford to stay in their homes.
