By Emma Rault, Columnist
Big corporate landlords all over the US are using the same Artificial Intelligence tool to set rents. Renters, prosecutors, and regulators are pushing back, arguing that this is illegal “price fixing” that is driving rents up.
More than 30 lawsuits have been filed against a company called RealPage and a group of corporate landlords. Twenty of these companies use RealPage’s rent-setting tool in Los Angeles. Together, they account for over 52% of all rental apartment buildings in the LA market.
And they’re active in the harbor area, with buildings in San Pedro, Wilmington, Harbor City, Carson, and Long Beach.
One of these corporations is Greystar, which currently manages 554 units in San Pedro — divided between San Pedro Bank Lofts, Harborview Apartments, Harbor Terrace Apartments, and the brand-new Suncrest At Ponte Vista — and another 1,721 in Long Beach.
Leasing managers for those first three buildings confirmed to Random Lengths that RealPage’s AI software is used to set the rents there. Suncrest At Ponte Vista’s leasing manager said they don’t plan to use it at this point.
RealPage collects private information that landlords don’t usually share with their competitors, such as lease expiry dates, vacancy rates, and rents being paid by current tenants. Its algorithm then uses this pooled information to tell landlords how much to charge.
Experts argue that this is price fixing — and that it’s harming renters.
Price fixing is when a number of players from the same industry get together and figure out what to charge. That isn’t happening here in the literal sense — the landlords aren’t communicating directly with one another. But they are, in effect, whispering it into the algorithm’s ear.
According to the Federal Trade Commission and the Department of Justice, that amounts to the same thing. Price fixing by algorithm is still price fixing, the agencies concluded in a March 2024 statement.
In a 2017 talk Maureen K. Ohlhausen, then FTC Acting Chair, said: “Is it ok for a guy named Bob to collect confidential price strategy information from all the participants in a market, and then tell everybody how they should price? If it isn’t ok for a guy named Bob to do it, then it probably isn’t ok for an algorithm to do it either.”
The Department of Justice has launched a criminal investigation into RealPage and some of its users. Dozens of tenants have filed class-action lawsuits — and the Attorneys General of Arizona and the District of Columbia are suing too.
They say the algorithm artificially pushes up rents above market rate to help landlords “outperform the market” by 3% to 7%.
“It is almost certain that people were evicted as a result of these price increases, and that some people were made homeless by them,” Arizona Attorney General Kris Mayes told media outlet More Perfect Union.
A tenant of San Pedro Bank Lofts, who spoke to Random Lengths on condition of anonymity, says the leasing manager was upfront with him about Greystar’s use of AI to set rents. “He said it was an algorithm that’s out of his hands.”
One of the algorithm’s developers told ProPublica that leasing agents, unlike AI, had “too much empathy.”
It’s hard to say whether the use of AI has driven up rents in San Pedro, because Greystar’s arrival is fairly recent. It took over San Pedro Bank Lofts and Harbor Terrace Apartments in 2023 and has been managing Harborview Apartments for about four years.
But rents at all three buildings are significantly higher than at comparable properties in their submarkets, according to a real-estate professional who wished to remain anonymous.
This is worrying at a time when renters are struggling to keep their heads above water. A recent UCLA survey showed that 4 in 10 renters in LA County worry about becoming homeless.
Fifty-eight percent of Los Angeles Harbor Region residents are renters. For many, homeownership is beyond reach, and even people with generational ties to the community worry about being priced out.
The Bank Lofts tenant we spoke to, a born-and-raised San Pedran, is one of them. He is seeing more and more longtime locals being displaced.
“I often worry, ‘Is that gonna be me sometime in the next couple of years?’”
Critics argue that AI isn’t just making tenants pay more.
Attorney General Mayes says that sometimes the software advises landlords to deliberately keep units vacant, restricting the housing supply.
And because these are such big players — corporations in charge of hundreds of billions of dollars worth of real estate — their actions could be having a ripple effect, triggering a rent surge across the market.
Meanwhile, tenants living under the algorithm find themselves in a precarious situation.
The algorithm can’t generate the new rent until only a month before the lease ends, the Bank Lofts tenant explained. Before that point, no one knows what the new amount will be — not even the leasing manager.
If the tenant can’t afford the increase, that leaves them just one month to find a new place.
The Corporate Takeover of Housing
The RealPage lawsuits draw attention to a bigger issue: the takeover of rental housing by corporate landlords over the last two decades.
According to a 2021 report by SAJE (Strategic Actions for a Just Economy), 43% of rental units in Los Angeles are owned by corporate landlords, backed by private investors and huge Wall Street firms.
The report shows that corporate ownership is tied to higher rents, increased evictions, higher vacancy rates, slum conditions, and other unethical practices.
Greystar is a major owner and manager of apartment buildings, with more than 50 buildings in Los Angeles and around 750,000 units worldwide. It has come under repeated legal scrutiny.
In January, for example, a former tenant in Colorado sued the company for “junk fees,” hidden charges for services like pest control that are not disclosed in the lease.
This appears to be not uncommon in Greystar buildings: “That’s, like, the worst part of living here,” the San Pedro Bank Lofts tenant told us. “I didn’t know any of that until I’d moved in.”
Also in January, Greystar charged the family of a deceased Colorado tenant more than $4,000, arguing that she broke the lease by dying. Other lawsuits accuse the company of withholding security deposits and violating privacy laws. In 2019, it hit an 83-year-old grandmother with a lease violation for taking too many cookies from a communal plate.
Greystar doesn’t own its San Pedro buildings. San Pedro Bank Lofts and Harbor Terrace Apartments are owned by MWest Holdings LLC, an investment firm based in Sherman Oaks, and Harborview Apartments is owned by Blackstone, the world’s largest commercial landlord.
This web of faceless entities is changing the rental landscape in a part of LA that has always prided itself on its small-town feel.
Kathy Creighton, a born-and-raised San Pedran with Croatian roots, manages an eight-unit apartment building owned by her mother. The building’s plumber is someone she went to high school with; she has known many of the tenants for years.
“It’s my reputation on the line, too … I would be embarrassed to do anything less than [running the building] how it’s supposed to be run.”
When corporations are in charge, that accountability — that network of relationships — gets lost.
Larry Gross, Executive Director of the Coalition for Economic Survival, echoes Creighton’s view.
“Usually, you’ll find people have a more stable housing situation when they know the landlord … and they’ve developed a relationship,” he told Random Lengths. “The corporate landlords have no contact with the people they rent to. Their main motivation is for their shareholders and board of directors to maximize their profits.”
The Dangers of AI
Gross considers the use of AI pricing software “a tremendous threat” to renters’ ability to find affordable housing.
“It’s likely to be more widespread [in Los Angeles] than we think. That should be a deep concern to everyone.”
And it’s not just our rents, Gross says. “It’s another indication of why AI is so, so very dangerous unchecked. We all know — that’s why we saw SAG-AFTRA go out on strike — it also threatens jobs. People are being put into an economic vise, and it’s AI that’s tightening that vise around their necks.”
But tenants’ advocates are pushing back, and the lawsuits against RealPage and Greystar are moving forward. Two other corporate landlords agreed to settle in February.
Greystar’s corporate management declined to comment on this story.