SPRINGFIELD – In the face of sky-high rental costs in Chicago and across Illinois, Senator Graciela Guzmán is working to crack down on price fixing schemes landlords conduct using AI algorithms.
“Renters deserve a fair, transparent and accountable housing market,” said Guzmán (D-Chicago). “AI algorithms allow landlords to rig the market in their favor and gouge every dollar from families looking for a place to live. We need to crack down on AI-driven rent fixing schemes that hurt competition and renters.”
AI-driven rental pricing platforms are known to facilitate rent price-fixing, causing artificial, double-digit rent increases in an era when people are already struggling to afford their day-to-day life. Under Senate Bill 343, landlords would not be able to coordinate pricing indirectly through a shared third-party service or software, such as an algorithm that sets prices across multiple competing landlords. This legislation would prohibit the use of rent-setting algorithms by banning:
- Fixing, controlling or maintaining rental pricing, fees, or any other rental term for residential rental units in Illinois
- Engaging in price coordination for residential rental units in the state, including through the sale, licensure, or provision of any service or product that involves price coordination of residential rental units.
- Makes it a violation to engage in price coordination or use, subscribe to, or contract with a service that involves price coordination for residential rental units in the state.
According to the Sanford Journal of Public Policy, rent across Chicago’s 77 neighborhoods jumped 10% over the past year, and RealPage’s recommendations can translate into rent hikes 5 to 10% above market value. In Chicago alone, roughly one-third of multifamily rental units, about 100,000 apartments, are now influenced by RealPage’s algorithm.
“Affordability is a huge issue for families in my community and across the state,” said Guzmán. “Illinois residents are already dealing with high prices at the grocery store and skyrocketing insurance and energy costs. The last thing people need is algorithmic collusion on their rent price that they are not even aware of.”
Senate Bill 343 has passed the Senate and heads to House for further consideration.
