The AI Dilemma: How Algorithms Are Reshaping Rental Prices in California
Lisa Mailhot | December 5, 2024
Buyers
Lisa Mailhot | December 5, 2024
Buyers
If you’ve been searching for a place to rent and faced equally steep prices everywhere, you’re not imagining things. Landlords’ use of AI-powered software to determine rent prices is a significant factor behind this trend. These algorithms, developed by companies like RealPage, analyze proprietary lease data to set rents across properties. However, this practice has drawn criticism for artificially inflating prices and making housing less affordable for renters.
Federal prosecutors allege that RealPage’s software facilitates an “unlawful information-sharing scheme,” enabling landlords to maintain elevated rent levels. In response, cities like San Francisco and San Diego are leading efforts to curb the use of such pricing algorithms. For instance, San Diego is drafting an ordinance to ban these tools, mirroring San Francisco’s pioneering legislation.
California, with its high percentage of renters (44% compared to the national average of 35%), is particularly vulnerable to the effects of such practices. Renters in the state already face significant challenges due to the high cost of living. Studies have shown that low-income residents bear the brunt of rising rents, with many spending an increasing portion of their income on housing.
Despite these challenges, RealPage has received substantial investment from entities like California public pension funds, raising concerns about conflicts of interest. Critics argue that such investments inadvertently harm the people these pensions aim to support.
California’s leadership is taking steps to address this issue. Legislative actions are not only focused on banning these AI tools but also on ensuring fair housing practices. The involvement of federal prosecutors and several states in an antitrust lawsuit against RealPage underscores the gravity of the situation.
Navigating the housing market in Orange County can be daunting amidst these rising challenges. Let's connect if you’re looking for a home and want expert guidance in this competitive market. Together, we’ll find the perfect place for you to call home.
Homebuilder sentiment remains low as reliance on price cuts grows, but optimism is building with the potential for a Federal Reserve rate cut. Mortgage rates have alre… Read more
Mortgage applications just hit a three-year high as rates dip to their lowest since October 2024. Learn why this could be a window of opportunity for both buyers and s… Read more
The U.S. rental market is heating up again, with asking rents climbing at the fastest pace since 2022. Limited new apartment construction and strong demand are fueling… Read more
A new Redfin analysis shows the U.S. homeowner population ticked down 0.1% year over year in Q2 2025 while renter households jumped 2.6%. Prices remain high, mortgage … Read more
Pending home sales are climbing for the second month in a row, while mortgage rates have dropped to their lowest level in 10 months. More affordable listings are hitti… Read more
New-home sales slowed in July 2025 as affordability challenges weighed heavily on buyers, despite builder incentives and discounts. With prices dropping below existing… Read more
Nearly half of U.S. workers are reconsidering big financial moves like purchasing a home because of concerns over job stability, according to a new Redfin survey. Whil… Read more
July 2025 housing starts data shows single-family construction climbing in the South while slowing in other parts of the country. For Orange County buyers and sellers,… Read more
Apartment-building permits slowed across the U.S. this past year, signaling tighter future rental supply even as demand firms back up. Here’s what the national trend—a… Read more
Let's find a time that suits you best to chat about your goals, show you how we work, and figure out how we can help you the most
Get In Touch With Lisa
Broker Associate
949-877-7087
124 Tustin Ave Suite 200, Newport Beach, CA 92663
