Ford sponsors bill to confront ‘unfair' pricing
With the Trump administration indicating little interest in the federal government's consumer protection role, it could be up to states to prohibit and prevent corporate landlords from using algorithm software to inflate rents via price fixing.
Nevada Attorney General Aaron Ford has brought forward Assembly Bill 44 to regulate price fixing of essential goods and services, including shelter, food and medicine.
Ford's office declined to say how the legislation, if passed by the Legislature and signed into law by the governor this year, would specifically address alleged practices by real estate software companies, like RealPage, that are being investigated for price fixing rents.
'We can't address hypotheticals about specific companies but to the extent any business' operation violates the provisions as laid out in AB 44, our office will not hesitate to utilize the statute to protect Nevada's consumers,' the office said in an email.
The White House Council of Economic Advisors under former President Joe Biden released an analysis in mid-December that found RealPage and other firms that market rent price algorithms r likely cost renters more than $3.8 billion in 2023.
Rent-pricing algorithms added on average $92 a month for units in Las Vegas that use such software, according to the report. The national average was $70 per month.
'Our analysis indicates that if price coordination was eliminated, there would be an economically meaningful decrease in price mark-ups for rental units using pricing algorithms,' the report found.
The White House has since removed the analysis from the website after President Donald Trump returned to office last month.
A ProPublica investigation from 2022 found rental pricing software by RealPage used algorithms to collect lease transaction data and advertised rates. The data was used to effectively tell landlords the highest rent an apartment applicant is able to pay, and then charge it.
Greystar, one of the nation's largest property management firms, featured prominently in the investigation. Greystar lists 44 apartment complexes under its management in Southern Nevada and five in the Reno area.
Currently more than 30 lawsuits nationwide allege RealPage has colluded with corporate landlords to inflate rent prices
The U.S. Department of Justice, along with Attorneys General of North Carolina, California, Colorado, Connecticut, Minnesota, Oregon, Tennessee, and Washington, filed a lawsuit against the company in August 2023 alleging it violated antitrust laws.
The department expanded its antitrust lawsuit in early January, prior to Trump's inauguration.
'RealPage will continue to aggressively defend itself in the remaining, previously filed civil lawsuits, which we believe are wholly without merit,' RealPage said in a statement in December. 'RealPage's revenue management software is purposely built to be legally compliant, enhances competition throughout the rental housing ecosystem and is highly configurable by our customers.'
The future of the lawsuit remains uncertain under the new administration.
Ben Iness, the coalition coordinator for the Nevada Housing Justice Alliance, said the state needs to take 'a bold and brave stance' to regulate the practice.
Some states, including Washington, have introduced bills to specifically prohibit landlords from using software that collect rental data to fix prices.
Lawmakers in New Jersey sought to make algorithmic systems unlawful, noting it would violate the New Jersey Antitrust Act.
In an email to Nevada Current, Ford said 'AB44 is designed to curb unfair methods of increasing prices' in general and would attempt to regulate price fixing essential goods and services under the Nevada Unfair Trade Practice Act.
The legislation, Ford added, stemmed from 'several investigations and litigations my office has been active in during my time as Attorney General.' He said details of those investigations are not yet public.
'These investigations and litigations have to do with the prices of essential goods and services like food, medicine, shelter, and the ability of companies to raise those prices to levels that impact consumers ability to purchase them,' he said.
The threshold for violating the law under the bill is when a person pays 'more than $750 for the good or service over a 30-day period or $9,000 for the good or service over a 1-year period.'
When asked about the threshold amounts, Ford said he was looking to 'balance the concerns of various industries with the need to curb the unfair practices that take advantage of consumers who must have regular, continual access to essential goods and services.'
He anticipated 'further discussions on these thresholds to occur throughout the legislation session.'
Iness noted that while the legislation is significant and has the potential to rein in rent-price fixing, the bill 'in the current form is broad and vague.'
He urged lawmakers to 'explicitly name' the practices they are looking to regulate.
'I would love, during that hearing, that they talk about housing scarcity, cost fixing and the exploitative factors around renting,' he said.
Lawmakers are expected to introduce a variety of bills this session to address the state's housing shortage and costs, as well as a landlord-tenant regulatory framework in Nevada that critics say is uniquely landlord hostile compared to most states.
Gov. Joe Lombardo named housing as one of his top legislation priorities in his state of the state address last month, and called on $1 billion in new attainable housing units, supported by some direct state spending, the Nevada State Infrastructure Bank, and bonds. The details of that legislation have yet to be released.
Iness said addressing the housing crisis needs to go beyond building more units and include expanding tenant protections.
'If folks are going to take our housing crisis seriously they need to look at all sides of it and not just the one-dimensional supply and demand approach,' Iness said.
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