This story is part of a two-year (2024-26) series prioritizing solutions to housing insecurity through collaborative storytelling. For more information about the series, please see the project overview. For questions or comments, please contact Sue Robinson at robinson4@wisc.edu.
As Madison renters confront escalating housing costs, a new bill introduced in the Wisconsin Senate would prohibit the use of AI pricing algorithms in the rental housing market, a novel technology that critics claim may artificially increase rent and suppress competition.
This recent legislative push is a part of a broader battle over AI, antitrust and affordability for renters across America. The central debate is whether AI pricing software suggests fair rental rates or enables property managers to coordinate price hikes and weaken market competition to the detriment of renters.
Introduced in March by nine Democratic state senators, including Sen. Kelda Roys, D-Madison, the new Wisconsin bill, 2025 Senate Bill 142, follows in the footsteps of similar legislation that was recently enacted in San Francisco, San Diego, Berkeley and Philadelphia.
Senate Bill 142 states, in part, “This bill prohibits the use of algorithmic software in setting rental rates or occupancy levels for residential dwelling units and prohibits persons from selling, licensing, or providing algorithmic software to a residential landlord.”
Roys said her inspiration for coauthoring the bill was a 2022 investigation by ProPublica reporting that RealPage, a property management and data analytics company, sold software to major landlords in cities like Denver, Nashville, Atlanta and Seattle that allowed them to share sensitive pricing data and collectively push rents upward.
Reading the article made her “appalled at the way it seemed like we’re essentially tech-washing really monopolistic, anti-competitive practices that would be illegal for you and I to do in a dark room somewhere,” Roys said.
The ProPublica investigation sparked concern among Roys and other lawmakers that the widespread use of algorithmic pricing technology could enable anti-competitive behavior that would violate traditional antitrust laws.
In August 2024, the U.S. Department of Justice filed an antitrust lawsuit against RealPage alleging that its pricing algorithm was, “an unlawful scheme to decrease competition among landlords in apartment pricing and to monopolize the market.”
The lawsuit claims RealPage made deals with competing landlords who collectively agreed to share private rental data, including rental rates, vacancy rates and lease terms, which RealPage used to fuel its algorithms. The software then generates rental cost recommendations that maximize pricing based on this nonpublic data, according to the Department of Justice.
The government’s complaint charges that in a free market landlords would be competing against each other for renters by offering lower prices, discounts and attractive lease terms, but with pricing set using AI assistance, landlords can rely on shared data to keep rents high and reduce the pressure to compete.
Summarizing the government’s allegations against RealPage, Peter Carstensen, a professor of law emeritus at UW–Madison Law School and former attorney for the antitrust division of the U.S. Department of Justice, said the algorithm may essentially enable property owners to collude while still maintaining that they never got together and collectively agreed to raise prices — which would be a felony, Carstensen said.
“We’re letting landlords skirt the law by selling it as a fancy software product,” Roys said. “The goal is to have affordable housing for everyone so that everyone in our community can thrive.”
When it comes to Madison specifically, many questions remain. Are AI pricing algorithms being used in Wisconsin? If so, have they contributed to recent price spikes? Even then, do the algorithms actually violate federal antitrust laws?
“We certainly believe that this is happening in Wisconsin. I reached out to RealPage to try to confirm that,” Roys said. “They said, ‘Yes, we do have data in Wisconsin, we do business in Wisconsin,’ but they would not share any details with me.”
Madison rental prices have increased over 30% since March 2020, and the average price of a one-bedroom apartment has risen more than 50% since 2017, according to the Cap Times.
Roys further noted that some of the landlords and property management companies named in lawsuits and the ProPublica article operate in Madison.
One of those companies is Greystar, one of the largest property management firms in the country and owner of The Hub on Campus Madison, according to the Daily Cardinal.
When asked if The Hub used RealPage’s algorithmic pricing software, The Hub and Greystar declined to comment, according to the Daily Cardinal.
Madison Commons reached out to RealPage for further information about its technology and with questions about its usage in Madison, but received no response.
Whether or not RealPage’s price-setting algorithm is used in Madison, there is debate over the degree to which AI-assisted price-setting drives up rental prices.
“A lot of bills like this are ultimately trying to address a problem that everyone recognizes, which is just high housing prices and scarce housing in general,” said James Broughel, a senior fellow at the Competitive Enterprise Institute and economist at George Mason University who focuses on innovation and regulation.
“The source of that is really related to the supply of housing, not the software necessarily. I don’t think anyone thinks that software is the main driver of that,” Broughel said.
Broughel believes the best way to attack rising housing and rental prices is to deregulate zoning and construction policies that make it more difficult to build and limit the supply in the market.
While Roys said she agrees that the main cause of rising rental prices is a shortage of supply, she reiterated that the Wisconsin bill she coauthored isn’t solely about trying to bring rental prices down; it is also designed to help enforce federal antitrust laws, which she believes this technology is violating, she said.
However, others, including Broughel, are concerned that the bill’s broad definition of the term “algorithmic software” could make the law confusing to enforce and risk including technologies that weren’t meant to be regulated.
Senate Bill 142 defines “algorithmic software” as “software that uses an algorithm to perform calculations on nonpublic competitor data regarding rent or occupancy levels in this state for the purpose of informing a landlord’s decision regarding residential housing occupancy rates, whether to leave a residential unit vacant, or the amount of rent that a landlord may obtain for a residential unit.”
“The software definition was very general,” Broughel said of the Wisconsin proposal. “If I was using an Excel spreadsheet and had a bunch of information in it, maybe some of that information is not public, and I use a formula, would this violate the law?”
Roys acknowledged this is a novel area of law and it can be hard to create regulatory definitions. But, she added, “You don’t want to underregulate and then have companies basically just ignore the law,” or “just tweak a couple things about their product, or how they market it, and continue violating the law.”
Senate Bill 142 sits in limbo until the Senate Committee on Government Operations and Economic Development schedules a public hearing. After the hearing, the committee could vote to recommend the bill for consideration by the full Senate, in which case it would undergo further votes and possibly advance in the legislative process.
Nationally, the Justice Department’s lawsuit against RealPage remains ongoing. In the coming years, regulators at the Federal Trade Commission and the Trump administration will evaluate whether or not to implement new antitrust guidelines on AI-driven pricing algorithms, according to Carstensen. Until clearer regulations emerge, more lawsuits will likely be filed, alleging that AI pricing tools violate antitrust laws across industries like housing, hotels, agriculture and airlines, Carstensen said.
Whether or not Senate Bill 142 becomes law in Wisconsin, it represents a frustration with rising rental prices and perhaps points towards a larger battle brewing over AI-driven price setting across various industries — a newfangled version of the age-old tension between slowing market innovation and letting new technological developments run unchecked.
A concern of Broughel’s is that the unfamiliarity and newness of the technology could create fears that lead to unnecessary regulation and stifle innovation by scaring away further investments into AI pricing technologies.
“We’re just at the beginning of this AI revolution, and it seems like we don’t know what the effects would be of banning certain pricing activities or the use of certain software,” Broughel said. “This is going to scare people away, and it will slow down the use of new technologies.”
However, to Roys, it is important not to let fears of slowing market innovation lead to new technological developments being put to use without first ensuring they don’t run afoul of existing laws.
“I am the founder of a tech-enabled startup, and I’m very much for innovation, but I am not for” allowing technology to create new ways for businesses to “hurt people,” Roys said.
