Senator Pérez introduces legislation to protect California renters from manipulative AI software fueling unfair rent increases
SACRAMENTO – Senator Sasha Renée Pérez (D-Pasadena) has introduced legislation to protect renters by prohibiting the use of artificial intelligence (AI) algorithms to manipulate and unfairly increase rents.
In 2024, the U.S. Department of Justice filed an antitrust lawsuit against a Texas property management software company alleging that the collection, combination, and exploitation of landlords’ competitively sensitive information, causes renters to pay inflated prices.
In the same spirit of protecting renters, SB 52, The End AI Rent Hikes Act, would prohibit the use of this kind of anti-competitive software because of its harmful impact on renters. In 2024, the White House Council of Economic Advisers found these AI software tools cost renters $3.8 billion in properties where algorithms are used to determine rents. This creates even greater housing instability. According to research from the U.S. Government Accountability Office, a $100 increase in median rent is associated with a 9% increase in homelessness.
“Sadly, many people no longer believe the American Dream is possible. Despite hard work, people can’t find economic stability. California renters - like myself - are getting hit with unbearably high rents and now it’s even worse with this type of AI technology,” said Senator Sasha Renée Pérez (D-Pasadena). “A marketplace works best when there is free and fair competition. SB 52 would prevent this technology from creating a monopoly-like environment where prices get manipulated and families suffer at the hands of hi-tech abuse.”
California is home to a disproportionate number of renters. 44 percent of Californians rent the place they call home as compared to 35 percent nationally. The state’s median rent is $2,800, which is 40 percent higher than the national median. In the City of Los Angeles, the median rent is $2,800, while in the City and County of San Francisco, the median rent is $3,285.
The End AI Rent Hikes Act is sponsored by TechEquity, Western Center on Law and Poverty, and the Alliance of Californians for Community Empowerment (ACCE).
“Landlords are using AI to inflate rents above and beyond what is fair, hurting California renters who are just trying to get by. We need to update our laws to protect renters from this tech-powered exploitation so we can prevent it from making our already-dire housing crisis worse,” said Catherine Bracy, CEO and Founder of TechEquity.
"The abusive use of technology worsens an already impossible housing market. Disasters like the fires in Los Angeles expose the harms of rent gouging on families in need and the vital importance of protecting tenants from the harmful use of these algorithms,” said Cori Racela, Executive Director of Western Center on Law and Poverty.
"As a tenant of the world’s largest corporate landlord, I've experienced firsthand how corporate landlords use every tool at their disposal to raise rents – including AI algorithms that push prices far above market rates. When my building was bought by corporate landlords, my rent jumped by $300 a month and has continued to jump every year since then — putting my family on the verge of homelessness. By using AI to maximize profits, corporate landlords aren't just making housing unaffordable – they're actively pushing families like mine into homelessness. SB 52 will help protect families from these exploitative rent-setting practices and keep more Californians in their homes," said Iraides Gonzalez-Soto, a member of the Alliance of Californians for Community Empowerment (ACCE)
“California rental prices are already out of control. AI technology gives landlords an unfair view of the competitive landscape of rents in the area. With that proprietary information, landlords can manipulate greater rent increases, maximizing profits, while struggling families are the ones that get screwed over. We must change this and SB 52 will provide relief,” said Senator Sasha Renée Pérez (D-Pasadena).
###
Senator Sasha Renée Pérez represents the 25th Senate District that includes the communities of Glendale, Pasadena, Alhambra, Altadena, Arcadia, Claremont, Glendora, La Cañada Flintridge, La Crescenta-Montrose, Monrovia, Monterey Park, Rosemead, San Gabriel, San Marino, Sierra Madre, South Pasadena, Temple City, Fontana, Rancho Cucamonga, Upland, and San Antonio Heights.