New bill would ban algorithms, AI-based software to raise rent prices

 

MADISON, Wis. (CBS 58) -- Across the state, renters are struggling with rising housing costs and inflation.

While there are many factors contributing to the housing crisis, including a lack of units, a pair of Democratic lawmakers want to try and help by preventing rental companies from using computers to hike prices.

Senator Kelda Roys (D-Madison) and Rep. Brienne Brown (D-Whitewater) are proposing legislation that targets companies like RealPage, a software that shares private data and uses algorithms to help landlords raise rent.

The bill would prohibit algorithmic software in setting rental rates and ban companies from selling similar programs.

"We should make it clear you can't make a computer do for you, what it would be illegal to do yourself," said Roys.

The U.S. Justice Department is suing several large landlords, including property management companies in Milwaukee and Madison, for using RealPage.

The DOJ alleges the company illegally helped landlords unfairly fix prices by sharing confidential information to "maximize price increase" on millions of properties.

Antitrust experts say the allegations in the lawsuits depict a clear violation of federal antitrust laws, which prohibit agreements with competitors to set prices.

"At the end of the day, it looks like a price-fixing agreement," said Peter Carstensen, an emeritus law professor at University of Wisconsin-Madison. "It takes a 'quick look' to see these kinds of agreements are unreasonable and therefore unlawful."

Wisconsin has not joined the DOJ's lawsuit. Ten states are accusing six landlords that operate in 43 states of scheming to avoid lower rents.

The Justice Department said one of the six landlords has agreed to cooperate with prosecutors.

In Wisconsin, Greystar and Willow Bridge were added as defendants. Greystar oversees three Milwaukee-area apartments in the Deer District, Lydell in Glendale and Evoni in Milwaukee.

In Madison, Hub on Campus and Sycamore Woods are operated by Willow Bridge.

The lawsuits and proposed legislation come as Wisconsin has seen some of the nation's fastest-rising rents.

A report last year by the real estate website Rent, found Wisconsin was among the 10 states with the steepest rent increases from January 2023 compared to the same month in 2024.

Lorie Hobbs, a resident of Madison, said she's been looking for months to find something affordable for her son.

"I think it's absolutely ridiculous," she said. "I've been having a very hard time. I've been looking and looking and it's not easy."

Daneil Tabi, a junior at UW-Madison, worries there's a lot of students that won't be able to find affordable housing on campus even with a flux of new units being built to try and ease a shortage.

"I feel bad for incoming students who probably don't have the money to be paying that, which is crazy," Tabi said. "Every day I think about it."

The latest bill is in addition to other efforts lawmakers have recently approved to address the housing crisis.

Soon, the state will begin offering loan programs aimed at incentivizing development, a bipartisan measure signed into law last year.