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February 14, 2025

CT lawmakers seek to prohibit landlords’ use of revenue management software

HBJ PHOTO | DAVID KRECHEVSKY The State Capitol in Hartford.
By David Krechevsky

State legislators are considering a bill that would prohibit landlords from using software to inflate rents.

The legislature’s General Law Committee will conduct a public hearing Friday to discuss legislation sponsored by Rep. Kara Rochelle (D-Ansonia).

The intent of House Bill 6478 is to “prohibit the use of certain software that uses one or more algorithms to examine data for the purpose of increasing landlord and property manager profits by constraining housing supply and increasing rental rates.”

In January, state Attorney General William Tong announced that Connecticut had joined with the U.S. Department of Justice and nine other states in filing an amended complaint in an antitrust lawsuit against RealPage, “suing six of the nation’s largest landlords for participating in algorithmic pricing schemes that harmed renters.”

According to Tong, California, Colorado, Minnesota, North Carolina, Oregon, Tennessee and Washington joined the Justice Department in filing the initial complaint in August 2024. In addition to Connecticut, Illinois and Massachusetts also joined the amended complaint in January as co-plaintiffs, increasing the total number of co-plaintiffs to 10.

Tong said the amended complaint alleges that the landlords — Greystar Real Estate Partners LLC; Blackstone’s LivCor LLC; Camden Property Trust; Cushman & Wakefield Inc. and Pinnacle Property Management Services LLC; Willow Bridge Property Company LLC; and Cortland Management LLC — participated in “an unlawful scheme to decrease competition among landlords in apartment pricing, harming millions of American renters.”

Combined, the landlords operate more than 1.3 million units in 43 states and the District of Columbia, he said, noting that three of the cited landlords operate multiple apartment complexes in Connecticut.

At the same time as the amended complaint was filed, the Justice Department also filed a proposed consent decree with Cortland that requires it to cooperate with the government, stop using its competitors’ sensitive data to set rents, and stop using the same algorithm as its competitors without a corporate monitor.

Last year, San Francisco became the first city in the U.S. to ban so-called revenue management software, followed by Philadelphia as the second. San Francisco’s ordinance sets civil penalties of up to $1,000 per violation, as well as fines to cover damages, restitution and attorneys' fees.

Rochelle’s proposed bill would prohibit the use of any software that:

  • is developed by a third party for the purpose of providing services to one or more landlords or property managers;
  • uses one or more algorithms to examine sensitive, proprietary or publicly available data regarding the housing market, including, but not limited to, data submitted by one or more landlords or property managers; and 
  • makes recommendations to one or more landlords or property managers for the purpose of establishing occupancy levels and rental rates that maximize landlord and property manager profits.

The legislation does not state what penalties would be imposed for violations.

In written testimony submitted in advance of the public hearing, Jim Perras, CEO of the Home Builders & Remodelers Association of Connecticut Inc., states that his organization is opposed to the bill.

In his testimony, Perras states the bill is “overly restrictive in that it broadly prohibits the use of algorithm-driven software in rental pricing without distinguishing between responsible market analysis and anti-competitive practices.”

“Without the ability to accurately assess demand, this bill could unintentionally discourage private investment, limiting available units in the long term and exacerbating Connecticut’s housing crisis,” he states.

He adds that the bill does not state how regulators will monitor compliance “or differentiate between software use for rent setting and other legitimate property management purposes.”
 
Pat Garofalo, director of state and local policy at the American Economic Liberties Project, submitted testimony in support of the bill. 

Citing third-party price-setters like RealPage, Garofalo says that while they might provide beneficial services, “these platforms have the functional result of suppressing competition. Instead of trying to fill units via competitive pricing, landlords and property managers are cooperating to set prices.”

He states that, “according to several investigations and legal complaints, these algorithms advise landlords to hold some units off the market, creating artificial scarcity, as well as to maximize churn, i.e. displace renters in order to raise the price of a unit.”

The result, he said, is inflated rents, artificially constrained housing supply, and higher profits for corporate landlords, property managers, and third-party rent-setters.

Friday’s hearing is set to begin at 10 a.m. in Room 1A of the Legislative Office Building in Hartford.

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