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Rental software company RealPage could soon see a reprieve from state and local efforts to ban its algorithmic pricing system for landlords thanks to a new tax bill passed Thursday by the House of Representatives.
The bill, titled “One, Big, Beautiful Bill,” includes a sweeping provision that would prevent state and local governments from regulating artificial intelligence and automated decision systems for a period of 10 years.
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The legislation states: “No state or political subdivision thereof may enforce any law or regulation regulating artificial intelligence models, artificial intelligence systems or automated decision systems during the 10-year period beginning on the date of the enactment of this Act,” according to Newsweek.
The 1,000-plus-page bill, which includes about $4.9 trillion in tax breaks, now heads to the Senate for approval or amendments.
The House Republican tax bill comes as RealPage faces mounting legal pressure. The company has been the subject of multiple class-action lawsuits and a government investigation tied to its rent-setting technology.
Most recently, New Jersey Attorney General Matthew Platkin sued RealPage and a dozen other entities, alleging collusion to unfairly raise rents in violation of state and federal antitrust and consumer protection laws. In a previously concluded investigation, the Department of Justice, joined by attorneys from eight states, filed a civil antitrust lawsuit accusing RealPage of using nonpublic, sensitive rental data shared by competing landlords to train its algorithm, thereby reducing competition and inflating rent prices.
While RealPage has denied wrongdoing, it continues to fight a wave of lawsuits that analysts say pose significant financial risk.
Capstone, a D.C.-based policy-risk advisory firm, estimates potential monetary damages could reach $73 billion, the Wall Street Journal reported.
Legal experts believe the proposed federal bill would do little to halt these lawsuits, which are based on existing antitrust and consumer protection laws — not solely on AI regulation.
Spencer Van Every | Analyst at Capstone
“I don’t think this has any real impact on the lawsuits,” Capstone Analyst Spencer Van Every told the outlet. “And the lawsuits are the bigger risk for RealPage.”
Nonetheless, if the bill becomes law, it could block dozens of efforts to regulate or ban algorithmic pricing systems. Cities, including San Francisco, Philadelphia and Providence, Rhode Island, have already enacted such bans, while others, including New Jersey and San Diego, are next in line. However, local officials warn the federal bill could dismantle efforts already underway.
In response, some municipalities are considering lawsuits against the federal government or expanding tenant protection laws.
James Solomon | New Jersey Councilman
“Rent control — that would be the biggest tool if folks are using algorithms to jack up rents,” New Jersey Councilman James Solomon said, as reported by the WSJ.
RealPage has already taken legal action of its own, filing a lawsuit against the city of Berkeley, California, over a recent ordinance banning algorithmic rent recommendations. The company claims the city’s ordinance infringes on free speech and was driven by misinformation about its software.
