With vacancy decontrol and the Ford government’s removal of rent control on buildings constructed after 2018, Toronto renters are all too aware of escalating prices for vacant units and annual double-digit rent increases on an apartment they’re already renting. With a structural housing supply shortage driving rent inflation, landlords are said to pass on massive rent increases to tenants according to what the market will bear. But what if these large increases are not solely the machinations of the “free market”, but rather the product of illegal price collusion between landlords facilitated by the same algorithmic pricing software currently subject to antitrust investigations in the United States? In the U.S., the Federal Bureau of Investigation is investigating property management software company RealPage for illegal algorithmic rent setting through its software Yieldstar. The Department of Justice launched a lawsuit last August, claiming that the AI software allows landlords to collude on their rents, avoiding fair competition in the market. The influence of RealPage across U.S. rental markets was significant: it set roughly 60 person of prices in the D.C. area, and 70 person in Phoenix, Arizona. A recent CBC investigation found that Yieldstar software has been in use by landlords and property managers in Canada since 2017. Reporting has documented its use by property management company GWLRA, as well as Dream Unlimited and its property manager Rhapsody Living. In response, the federal government recently announced that it is launching an investigation into price-fixing by landlords using algorithms through the Competition Bureau. The full extent of this software’s use in the Toronto rental market is unknown, nor do we have a full picture of who is using it. In this context, is imperative that the City employ all tools at its disposal to ensure fairness for renters by taking action against landlords who cheat to illegally drive up their profits.
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