In an effort to combat rent price gouging by Connecticut landlords, the state legislature will soon consider a bill that would ban landlords from using artificial intelligence to set occupancy levels and rental prices.
Democratic State Rep. Kara Rochelle, who represents Derby and Ansonia, introduced the AI bill, and said it’s designed to protect renters from rising housing costs.
“I hear from constituents,” Rochelle said. “And when you have people that say, ‘Hey, I've been living here for 30 years. A mom and pop owns this multi-family, and all of a sudden, a big out of state landlord took over, and they suddenly are raising my rent by three, $400; this is a pattern.”
The proposed bill was introduced soon after Connecticut joined a multi-state lawsuit accusing landlords and a software company in a price-fixing scheme. The suit said the landlords used AI to help set rental prices and occupancy levels, according to previous reporting by Connecticut Public.
Brian Perkins, an Ansonia resident, supports the bill and participated in a public hearing at the state capitol Friday. Perkins accused landlords who use the AI tool of greed.
“The software itself is used primarily within the community of landlords and property managers already, to basically feed data into this algorithm to see where they can maximize their profits from their tenants.”
Neither Perkins nor Rochelle mentioned specific incidents where people were affected by landlords using AI to screen tenants or set rents.
But an ongoing lawsuit from 2018 by a Connecticut resident against CoreLogic, a company focusing on tenant screening services, accused the company of erroneously using a dismissed criminal charge in denying an apartment to a disabled resident.
The lawsuit claims the denial was a result of the company’s automated screening software.
The bill, introduced to state lawmakers in late January, would prohibit the use of AI to maximize profits by constraining housing supply and raising rental prices.
While Rochelle said the bill would help renters, some members of the state's General Law Committee appeared to have more questions about the scope of the bill, including Republican State Rep. Dave Rutigliano.
Rutigliano asked whether the bill would apply to local landlords in addition to corporate landlords based out of state.
“I, in my mind, I sort of treat the mom and pop landlord or somebody who has a small investment, different than these massive complexes,” Rutigliano said.
The Home Builders and Remodelers Association of Connecticut issued written testimony opposing the bill stating it’s too broad in scope, and would hurt small landlords who use algorithm software to price their rental units in a competitive market.
Rochelle said she’s one of the few state legislators who currently rents her home. The bill, she said, isn’t meant to ban all property management software, but is targeting algorithms that set a fair market value for the properties, by comparing data from multiple clients.
State lawmakers said they needed to look into the issue more closely. Rochelle herself said the topic has taken some getting used to, but said the housing crisis in Connecticut will get worse if the state doesn’t get a handle on it.
“We could build as much as we want, but if the software keeps on comparing across clients and then spitting out higher and higher rates, how are we ever going to get the housing crisis under control,” Rochelle said.
