In a bold move aimed at addressing the growing housing affordability crisis, Democratic presidential nominee Vice President Kamala Harris has introduced a new housing plan that could dramatically alter the way rents are set across the country. The core of her proposal is a ban on landlords using algorithms that some claim are used to manipulate rental prices.
This proposed legislation, aptly titled the “Preventing the Algorithmic Facilitation of Rental Housing Cartels Act,” directly targets companies like RealPage, a real estate technology firm accused of using its algorithm, YieldStar, to inflate rents beyond market levels. YieldStar, which analyzes data from multiple markets to suggest rental prices to landlords, has drawn scrutiny from law enforcement agencies, with Arizona and Washington, D.C. attorneys general filing lawsuits against RealPage, alleging price-fixing and collusion.
“Landlords using RealPage are not just taking the market price for rent — they’re setting the market price,” stated Arizona Attorney General Kris Mayes, who estimates that 70% of rental homes in Phoenix and 50% in Tucson are owned by firms using RealPage’s software.
The allegations of algorithmic manipulation come amidst a surge in rental costs, fueled partly by a significant housing shortage. Since 2019, U.S. rents have climbed by approximately 19%, leaving many struggling to afford housing. Public opinion reflects the urgency of the situation, with most Americans — 83% of Democrats and 68% of Republicans — recognizing the lack of affordable housing as a major issue.
Beyond tackling algorithmic rent-setting, Harris’s plan also includes provisions to restrict Wall Street investors from purchasing homes in bulk, further addressing concerns about the impact of large-scale investment on housing affordability.
While the proposals have garnered support for addressing potential abuses in the housing market, some experts caution against overly restrictive measures. Critics argue that excessive regulation could deter investment in new housing construction, exacerbating the existing supply shortage.
“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. The debate surrounding Harris’s plan highlights the complex nature of the housing affordability crisis and the need to find solutions that effectively address both demand and supply factors.
RealPage has not yet commented publicly on the allegations against it.
