The artificial intelligence-powered rent-pricing programs from RealPage boosted metro Atlantans’ monthly rents by $181 — more than in any other major US city — in 2023, according to an alarming new White House report.
The property-management software company enables individual landlords — corporate or otherwise — to act as cartels in local rental markets by providing them with vast amounts of aggregated rent-price data. That allows landlords in markets like metro Atlanta to “act as if they are a single dominant landlord, and use their collective market power to increase profits by setting higher prices,” the White House Council of Economic Advisers (CEA) found.
Nearly one in every four rentals nationally uses a RealPage pricing algorithm to set rates, the report adds, which has prompted a Department of Justice lawsuit accusing the company of monopolizing the country’s multifamily rental market. In metro Atlanta, that figure is even higher, the report found: Over 70% of multifamily units locally are priced based on the RealPage software’s recommendations.
“Algorithmic pricing weakens competition because it can facilitate price coordination among landlords who would otherwise be competing [for tenants],” the report explains. It’s a practice that the CEA estimates cost renters at least $3.8 billion in higher rents for 2023 alone, boosting the average US renter’s monthly housing payment by $70.
Taylor Shelton, a Georgia State University geographer and housing expert, said those numbers are “eye-catching,” but not necessarily surprising “to those of us who study the Atlanta housing market or, for that matter, anyone who has had the misfortune of renting from a large corporate landlord.”
“Just like we’ve seen with the incursion of large corporations into the single-family rental market, multifamily rental companies have been able to take advantage of an overly lax regulatory landscape in Atlanta and across the state of Georgia due to our lack of rent regulation or other protections for tenants,” Shelton said in an email.
“The use of algorithmic price-fixing tools like RealPage represents a significant exacerbating factor for these trends we’re already used to seeing, as companies that are ostensibly competing with one another are now able to coordinate prices and other rental terms via software,” the GSU housing expert added.
It’s a problem that warrants a swift solution, numerous city of Atlanta officials told Atlanta Civic Circle — but quick fixes are hard to come by in a state that’s historically afforded landlords carte blanche when setting rent prices.
Atlanta’s elected officials are hamstrung by Georgia’s legal code, which prohibits any local governments from regulating rent prices. According to Georgia statute, “No county or municipal corporation may enact, maintain, or enforce any ordinance or resolution which would regulate in any way the amount of rent to be charged for privately owned, single-family or multi-family residential rental property.”
San Francisco and Philadelphia have barred landlords from using RealPage software to set rent prices, but city of Atlanta attorneys believe Georgia law prohibits local elected officials from doing the same, according to Courtney English, Mayor Andre Dickens’ top policy advisor.
“We are having conversations with our county and state partners to figure out a solution that will help not only Atlanta, but all of Georgia,” English said in an interview. “But we have not discovered a regulation that allows us to supersede the state’s prohibition on rent control.”
Atlanta City Councilmember Jason Winston echoed English’s concerns about the city’s regulatory limitations. ”Despite these challenges,” Winston said in an email, “the city remains focused on solutions, pushing for transparency in AI tools and advocating for state-level reforms to increase affordable housing.”
Repealing the state’s rent-regulation ban would go a long way toward curbing the adverse effects from AI-driven rent-pricing in an already strained rental market, said Shelton, the GSU professor. But since those efforts routinely fail during Georgia’s biennial legislative session, which begins Jan. 13, he thinks it might be easier legislatively to “ban landlords from using these new algorithmic price-fixing tools.”
It’s past time for both Atlanta and Georgia to “level the unequal playing field between landlords and tenants, which is one of the major drivers in the kinds of predatory practices we’ve seen from landlords in recent years,” Shelton emphasized.
In a move in that direction, the Justice Department on Tuesday expanded its lawsuit against RealPage to include six major corporate landlords — including Atlanta-based Courtland Management. It accused them of colluding with one another to gouge renters with higher housing costs.
Atlanta City Councilmember Matt Westmoreland said he was “encouraged” to see the federal government widening its crackdown on large, predatory landlords. He hopes the increased federal scrutiny will help stem “this harmful practice,” given the barriers to reform at Georgia’s landlord-friendly legislature.
This practice has been going on in the Atlanta metro area for many years, and long-term renters like me have paid far too much in rent because of unfair rent increases every year when we renew leases. One property manager where I lived in Sandy Springs years ago told me that our management company used algorithmic pricing and he was open about it when residents complained about high rent increases. You’re trapped and can’t afford to move. He said all property management companies used this. Our management company was not even one of the large ones, but it used the RealPage service. Residents had no recourse, ever, even after filing complaints with the State. Shameful business when corporate greed undermines the ability of the average renter to afford a decent place to live and our state government allows it. Politicians and landlords live in nice homes; renters struggle to pay outrageous rents. This is a real blot on Georgia.
We need to be a people that is more considerate of each other in all we do. Not being considerate of each other in various ways is how people in our communities begin to retaliate in a defensive matter and worse crimes begin to outburst. Then communities end up with no peace. OK now let’s look in detail with a civil, proactive perspective and see what we are structuring. ( Our choice) We can make things of life work for each other other, or not.
I reside in a Senior Citizen apartment building for seniors 62 and up, however when I moved in the building was brand new, my rent was $860. 00 a month, my rent has increased each year I have lived here and I now pay $1,040,not including water. greed is an under statement. So many residents have moved out. Something needs to be done.