Price Fixing Discovered Across Ten States Is Driving a Housing Crisis That’s Forcing Millions into Homelessness
At the onset of summer 2022, several major publications, including Time Magazine, sounded the alarm on a disturbing real estate trend – double-digit rent hikes. With the chronic lack of affordable housing fueling homelessness for decades, the sudden surge in rents was a dire warning of an impending nationwide crisis.
In fact, if you look at the data, you will find that homelessness increased by a whopping 12% between 2022 and 2023, echoing the rental markups to the letter and shattering the previous record high. The figures were jarring, but what was worse was that nobody could figure out why.
Keep that 2022 date in mind because it’s relevant to the story. At that time, experts pointed to the recent influx of renters as a key driver of the astronomical monthly rate increases, explaining how would-be home purchasers were trapped into perpetual tenancy after being outpriced by the ever-constricting housing market. Fair enough.
They also cited slow housing construction, apartment projects in limbo due to lack of repairs, remote work giving way to mass relocation in places with traditionally lower rents, and the loss of COVID-era financial support systems. All of these factors played a part.
However, unbeknownst to many, a more sinister force was at play: a landlord conspiracy so egregious that it prompted an FBI investigation.
Now, in 2024, we know what happened. Wealthy landlords leveraged artificial intelligence to set rent prices at record highs. This scandal occurred in at least ten states across the country, causing staggering and likely irreparable damage to the economy. And this is merely scratching the surface of the present-day dystopian nightmare we’re all living in.
Mass Displacement is Built into the Modern American Landscape
In an eye-opening interview with Invisible People reporters, a homeless San Francisco man named Vincent explained how he lost his rental unit to eviction while studying to become a chiropractor. His story is emblematic of about 7 million others as the American rental market continues to boast a devastating shortage of 7.4 million affordable homes.
“I didn’t realize what a quagmire the streets were. I didn’t realize how they sucked you in and kept you there,” said Vincent, his flat, dull tone falling in complete synchrony with the city’s backdrop.
Behind him, monotone storefronts line the streets, only interrupted by spinning wheels and scattered commercial signs—business as usual.
San Francisco is the capital of unaffordable housing and homelessness. You will rarely find one of these crises without the other. The city’s story betokens what might happen if widespread unaffordability were to occur across multiple metropolitan cities, a sad reality already in full swing.
Since 2020, experts have warned of a pending avalanche of evictions, but nobody foresaw the shocking twist. Artificial intelligence has been steadily stealing occupations from the working class, but that’s not all. It has also been quietly working in the background for wealthy real estate investors to keep the rents capped—and sky-high.
Double-Digit Rent Hikes Are Not a Mere Trend
They are a deliberate, algorithmic standard designed to exploit the housing market.
When nonprofit news corporation ProPublica began a probe into the Texas conglomerate Real Page, the actual reason behind the drive in rent hikes became crystal clear. In fact, at least initially, the company didn’t even try to hide the fact that its algorithm-based software, YieldStar, was being used nationwide to boost rents and increase landlord profits.
“As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually,” bragged RealPage executive Andrew Bowen in the heyday of the algorithm’s “success.”
The cost, of course, was crippling rent hikes for everyday people as the American rent burden surged to a nationwide high, leaving half of all US-based renters forking over more than 30% of their salaries toward housing.
According to investigators, the algorithm was designed to recommend that agencies set artificially high rates, encouraging most major leasing companies to comply with an agreed-upon standard. This kind of orchestrated rate inflation is legally referred to as price-fixing. Following the ProPublica probe, corrupt landlords and property owners in at least ten states have been accused of the crime. The Justice Department has also filed a lawsuit against RealPage, accusing the company of violating antitrust laws.
Double-Standards: For Years, Landlords Have Lobbied Against Fixed Rates When This Was Suggested as a Form of Rent Control
“The irony is that rent stabilization is often attacked by landlords under the guise that there should be no rent setting,” said tenant rights attorney Leah Goodridge in an exclusive discussion with Invisible People. “Yet, here they are cavorting to set the rent at unaffordable levels and worsening the housing crisis.”
What happened to the narrative that fixed rental rates are bad for middle-class communities, a wild claim corporate investment firms made for years when people argued in favor of rent control?
This is yet another landlord case of regulations for thee but not for we. Again and again, we are coaxed into making concessions for major corporations that very much work at the expense of the people. The only difference is that now, with an algorithm involved, big tech is being levied as another weapon with which to pummel poor people and pedestalize the rich.
“These lawsuits are a prime example of why we cannot rely on the omnipresent market to dictate housing policy—the market is rigged by algorithmic, rent-setting software,” Goodridge explained.
Talk to Your Legislators About Drafting and Enacting Tenant Rights
Real-life villains are laughing behind keyboards as their fingers dance across the screens, and all they can see are the dollar signs. RealPage executives have even admitted that it is easier to express less empathy for renters once a machine is crunching numbers for you. This raises the broader question of whether vital, life-sustaining items such as housing should be for-profit or for sale at all.
Talk to your legislators about drafting laws that protect renters from unfathomable rent hikes that only exacerbate the homeless crisis.
