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.
“This measure is about restoring fairness, transparency and accountability to our housing market by cracking down on AI-driven rent fixing schemes that undermine competition and exploit renters,” said Guzmán. “I’m proud to have worked alongside partners at the city, state and local levels to confront the growing abuse of algorithmic pricing tools and put people ahead of corporate greed.”
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.
“At a time when families are already struggling with rising costs, we cannot allow landlords to collude through software designed to maximize profits at the expense of our communities,” said Guzmán. “Let’s be clear, this is not innovation, this is digital price fixing. Illinois is sending a clear message: our housing market should work for renters, not predatory corporations.”
Senate Bill 343 – which is part of the Senate’s AI protection package – was heard in the Senate Executive Committee.
