Loud. Dirty. Expensive. Those are some ways Devin Kinnally described off-campus housing.
The 20-year-old UF economics junior said she’s been through the wringer hunting for an affordable dwelling close to her classes. Kinnally lived in a Beaty Towers dorm her freshman year before venturing off campus.
Kinnally said she didn’t reap much value from a unit she leased for $1,100 monthly at UFORA, an apartment complex on Southwest Fifth Avenue.
“[It was] kind of ridiculous in the first year considering how much we were paying,” she said.
The possibility of algorithmic pricing software contributing to her troubles never occurred to Kinnally.
However, as more developers adopt automated property management tools, they’ve faced challenges with their renters and the law. A handful of real estate software companies and their users are now involved in lawsuits alleging foul play for their application of the technology.
Lawyers argue the companies’ services facilitated schemes that enriched developers at the expense of renters. Of the six landlords named in a federal price-fixing lawsuit, one, Camden Property Trust, operates nearly 23,000 apartment homes in Florida as of the end of 2023.
How did we get here?
Homeownership in the U.S. is becoming increasingly out of reach for most Americans as shelter costs rise faster than incomes. Developers, looking to extract as much profit from their properties as possible, have limited incentive to build low-cost housing. That’s created an overabundance of luxury complexes and a shortage of low-cost alternatives, The Wall Street Journal reported in January.
In the 1970s, there were three affordable apartments for every person looking, said Anne Ray, a researcher with UF's Shimberg Center for Housing Studies. A decade later, that trend had flipped.
As an influx of Baby Boomers entered their prime home-buying years between the 1980s and 1990s, demand for homes soared, driving up costs. People who would have settled in a modest starter house could no longer afford to buy, so they leased instead, straining the rental supply, Ray said.
Fast-forward about thirty years and the COVID-19 pandemic plunged the market into further tumult. Between 2020 and 2022, home and rent prices spiked, per a Federal Reserve Bank of Cleveland analysis. Residents in Florida metros took a devastating hit and haven’t quite recovered, Ray said.
A little over 56% of Florida renters were cost-burdened in 2023, meaning they spent more than 30% of their income on housing costs, including rent and utilities. That’s higher than any other U.S. state, surpassing the national average of 48%, five-year data from the Census Bureau’s American Community Survey shows.
Rents and home prices have since stabilized, but they’ve done so at high levels. Tenants must cope with the new normal.
“People are going to figure out a way to make that work, whether it's having more roommates or really stretching their budget further than they're comfortable with,” Ray said. “So until there's enough modest options out there, people are stuck paying higher rents.”
AI sets the terms
Landlords typically calculate rent by weighing their property's value, mortgage rate and expected maintenance costs. They also consider rates at nearby complexes and assess what residents in their area can afford.
For example, in Gainesville, median rent in the area including predominantly low-income Lincoln Estates and Springhill neighborhoods is over $1,000 cheaper than in portions of the high-income Haile Plantation community on the city's western outskirts.
Ultimately, though, prices flex to demand, according to Margo Utter, a development manager at Stiles, a commercial real estate firm with a property in Gainesville.
“Sometimes we get demonized a little bit as developers, like, ‘Oh, how dare you open this brand new building and charge $5,000 for a month for rent,’” Utter said. “What they don't realize is that basically all of that rent is dictated by our competition and what the [tenant] is willing to pay.”
The market conditions renters have gotten used to, however, may not be totally organic.
The software company RealPage uses artificial intelligence to help landlords set rates. Users plug data like unit prices and vacancies into RealPage’s platform. Its YieldStar algorithm, which also knows what competitors charge, crunches the numbers and generates price suggestions. RealPage’s website claims the tech can outperform the market by 3% to 7%, meaning when implemented, YieldStar’s rates can garner more return for landlords than the average asking price.
In August, the U.S. Department of Justice and eight state attorneys general filed a lawsuit against RealPage, alleging the company enabled collusion, or illegal cooperation, among its clients to raise rents.
The amended complaint, filed Jan. 7, cites six large landlords — with properties in 43 states and Washington, D.C. — as potential participants.
“Now that everyone has access to this tool, it’s causing every building to have access to being even more aggressive with their rents,” Utter said.
Before tools like RealPage, landlords had to strike backroom deals to fix prices. Competitors would agree to charge the same inflated rate and promise not to undermine each other with discounts. The DOJ argues they can now accomplish the same thing, shielded behind an algorithm.
Nine in 10 RealPage recommendations seem reasonable, Utter said, but her company doesn’t adopt them unquestioningly. Instead, its asset management team adjusts the rates as needed based on independent market assessment.
That’s not the case for every landlord. The DOJ contends RealPage forces compliance with its recommendations through an “auto-accept” feature that discourages users from rejecting the generated rates. Utter’s employer, Stiles, is not named in the lawsuit and hasn’t been accused of impropriety.
Renee Tapp, a UF assistant professor of urban and regional planning, said the government is primarily concerned RealPage's sprawl could trigger a national price convergence. If enough landlords use RealPage’s price-recommendation services, she added, few would have reason to offer lower rents, standardizing high housing costs across states.
Antitrust law doesn’t distinguish between old-fashioned price coordination and the AI equivalent.
“The issue is not the technology itself,” Tapp said. “It is what it is enabling the industry to do.”
Nearly 30% of multifamily housing units in the Greater Orlando area use management from companies named in rent-setting lawsuits, according to a Washington Post analysis.
Automation gone awry
Computers aren’t only creating headaches for prospective renters. They’re making life harder for tenants once they move in.
Jacksonville is bursting with luxury apartments under corporate ownership, said David Jaffee, a University of North Florida professor who directs the JAX Rental Housing project.
Many such complexes use algorithmic tools to screen prospective tenants. But sometimes, the technology makes mistakes landlords don’t catch, and rental applicants have limited recourse to correct discrepancies.
A Jacksonville-based landlord that manages more than 6,000 rental properties settled a discrimination lawsuit with housing applicants in November. The plaintiffs alleged the company’s SafeRent Solutions automated screening program flagged their applications based on faulty eviction filings, disproportionately targeting Black renters.
Automated background checks can save landlords money and time. But because their mechanics are proprietary, regulators can’t easily probe their fairness or compliance with federal housing laws.
SafeRent’s algorithm signaled risk even after the applicants proved their eviction filings were made in error or dropped. JWB Property Management, the subject of the discrimination lawsuit, denied wrongdoing.
Corporate developers have also outsourced eviction filings to AI, so if a renter wants to contest the notice, they have to take it up with a computer, Jaffee said.
“When people are having a tough time paying rent or they miss the rent payment by the deadline…usually some negotiation occurs,” Jaffee said. “That doesn't happen when you're working through this automated system; it just automatically generates a demand that a lawyer take up the eviction filing issue.”
Florida law permits landlords to terminate a rental agreement with a three-day notice for missed payments. Some get creative trying to remove tenants they think pose financial risks to their complexes, according to Bobby Mermer, coordinator of the Alachua County Labor Coalition.
Gainesville property managers try to find reasons to boot tenants who receive federal housing assistance, Mermer said.
Data from the UF Shimberg Center for Housing Studies shows the number of eviction filings per 1,000 renter-owned households in Alachua County surged 26% from 2019 to 2024.
While Sergio Montes has never been threatened with eviction, he has worried about paying rent for some months.
The 20-year-old Santa Fe College English junior has been financially independent since high school. Last year, he rented a townhome for about $850 per month. This year, he splurged on an apartment unit for $1,300 monthly at Monarch Gainesville. Based on publicly accessible information, his complex uses RealPage to price units.
“I regret my decision, but there's really nothing you can do once you're in it,” Montes said.
Contact Natalie Kaufman at nkaufman@alligator.org. Follow her on X @Nat_Kauf.
Natalie Kaufman is the business enterprise reporter and a second-year journalism major. Outside the newsroom, you'll catch her drinking too much caffeine and running.
